Economic Analysis: Shows The PEO Industry Footprint in 2018

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In light of the recent announcement by Paychex that it has entered into an agreement to acquire Oasis Outsourcing, the nation’s largest privately owned professional employer organization, the National Association of Professional Employer Organizations (NAPEO) is highlighting its September 2018 study on the PEO industry’s economic footprint. The study, by noted economists Laurie Bassi and Dan McMurrer, showed that employment growth in the PEO industry is 14 times higher than the growth rate in the U.S. economy overall.

An Economic Analysis: The PEO Industry Footprint in 2018 also shows that:

  • There are 907 PEOs in the United States employing 3.7 million worksite employees (WSEs)
  • Annual wages in the PEO industry are $176 billion.
  • 175,000 businesses partner with a PEO.
  • Total employment in the PEO industry is the same as the combined number of employees for Walmart (U.S. only), Amazon, Google, Apple, IBM, FedEx, Starbucks, AT&T and Wells Fargo.

The study, by noted economists Laurie Bassi and Dan McMurrer of McBassi and Associates, is the sixth in a series. Research conducted last year by Bassi and McMurrer showed higher revenue growth, increased profitability, and higher employee satisfaction for companies that use a PEO. Previous studies conducted by Bassi and McMurrer have shown that businesses in PEO arrangements grow faster, have lower employee turnover, and have a significantly higher rate of business survival than businesses that don’t use PEOs.

“The numbers in this study reinforce the growing footprint of the dynamic PEO industry. The outlook for continued growth and vibrancy is extremely bright for PEOs given the significant value proposition we offer to small and mid-size businesses: Faster growth, higher profitability, and happier employees,” said NAPEO President & CEO Pat Cleary.

A copy of the full study is available here.  Links to earlier studies can be found here.

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