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State of the PEO Industry Post 2020

Updated: Oct 13, 2021

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

NAPEO provided a summary of the current state of PEOs after 2020; though the past year presented many obstacles, PEOs fared better than most industries during the pandemic.

Research and statistics from NAPEO’s previous white papers show that PEO clients enjoy, “a better chance of survival, higher growth rates, lower employee turnover, higher employee satisfaction and they fared better during the COVID-19 pandemic.” These numbers are no surprise given that PEOs alleviate most internal headaches for small and mid-sized businesses through their HR expertise.

The number of worksite employees (WSEs) continued to go up in 2020 as PEOs employed 3.97 million WSEs in 2020. This massive amount represents, “13.7 percent of all employment by private sector employers that have 10 to 99 employees (the size range of a large percentage of PEO clients) and 2.7 percent of all civilian employment in the United States.”

Here are some key statistics NAPEO’s highlighted in its 2020 white papers:

  • Number of PEOs- 487

  • PEO worksite employees- 4 million

  • Annual WSE wages- $216 billion

  • Number of PEO clients- 173,000

  • Average annual growth rate (2009-2020)- including pandemic 7.6% & excluding pandemic 8.3%

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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