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How Did the Pandemic Affect the PEO Industry?

Updated: Oct 13, 2021

The National Association of Professional Employer Organizations (NAPEO) released their annual White Paper Series last month to dive deeper into the status of professional employer organizations (PEOs).

NAPEO provided a summary of the current state of PEOs after 2020 through certain key statistics. The numbers and statistics used were covered in a previous blog last week.

Though the past year presented many obstacles, statistics show that PEOs fared better than most industries during the pandemic.

A key statistic used showed that PEOs had seen a consistent growth rate of 7.6% when factoring growth with the pandemic and 8.3% without. These results show that the average PEO remained at the same size as it did in 2019. While that may not be the sexiest fact for PEOs, it is still positive when considering the state of the economy in 2020.

Even though the average PEO remained the same size in 2020, “holding steady actually resulted in a substantial outperformance relative to external comparisons,” despite the rise in unemployment and the closings of many small businesses.

The 2020 white papers also listed the states with a high relative PEO presence and those with a low relative PEO presence.

High relative PEO presence (alphabetical order)

  • Arizona

  • California

  • Colorado

  • Delaware

  • Florida

  • Georgia

  • Hawaii

  • New Jersey

  • New York

  • Texas

Low relative PEO presence (alphabetical order)

  • Arkansas

  • Louisiana

  • Maine

  • Michigan

  • Mississippi

  • North Dakota

  • Rhode Island

  • South Dakota

  • Vermont

  • West Virginia

Despite the tumultuous year that was 2020, PEOs continue to be on the rise. As the industry gains awareness, the number of credible PEOs will consistently climb and the organizations, along with their clients, will thrive.


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