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2018 Market Analysis & Industry Outlook: Professional Employer Organizations (PEO)

Overview: the U.S. Professional Employer Organizations (PEO) Industry

This section provides answers to key questions about the industry:

  1. What is the total market size (industry revenue)?
  2. What is the industry outlook?
  3. Market Analysis: Is the market growing or declining, and how quickly?
  4. Are long-term forecasts positive or negative?
  5. What is the average company size in the industry?
  6. How many companies are in the industry?

Market Size & Industry Statistics

The total U.S. industry market size for Professional Employer Organizations (PEO): Industry statistics cover all companies in the United States, both public and private, ranging in size from small businesses to market leaders. In addition to revenue, the industry market analysis shows information on employees, companies, and average firm size.

Investors, banks, and business executives use growth rates and industry trends to understand the market outlook and opportunity.

market size 2018
Charts and graphs can be copied to Microsoft Word and Powerpoint presentations.

Statistics 2012        2013        2014        2015        2016        2017
Market Size
(Total Sales/Revenue)

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Total Firms
Total Employees
Average Revenue Per Firm
Average Employees Per Firm
Statistics Source: U.S. Census, AnythingResearch Market Analysis

Market Forecast

Market forecasts show the long term industry outlook and future growth trends. The following five-year demand forecast projects both short-term and long-term trends.

market forecast

Forecast / Industry Outlook 2017 2018 2019 2020 2021 2022
Market Forecast ($ millions)
Projected Industry Growth Rate (%)
Source: AnythingResearch Economic Analysis

Product & Services Breakdown

Research products and services in the Professional Employer Organizations (PEO) industry generating sales. Note that products are broken into categories with different levels of classification.

Product DescriptionNumber of Companies Sales ($ millions) Percent of Total Sales

Industry Total

Temporary Staffing Services

Other Temporary Staffing Services

Employee Leasing Services

Employee Leasing Services With Payroll And Benefit Services

Employee Leasing Services With Payroll And Human Resource Services

Employee Leasing Services With Payroll, Benefit, And Human Resource Services

Payroll Accounting Services

U.S. Geographic Distribution: Revenue Statistics by State

Market Size by State ($ millions) indicates how the industry's competition is distributed throughout the country. State-level information can identify areas with higher and lower industry market share than average.

U.S. map by state

Professional Employer Organizations (PEO) Industry Price Trends

Rise and fall in market prices are affectedd by supply, demand, and the cost of goods/services sold. Higher demand or COGS will put upward price pressure on prices. Higher competition among Professional Employer Organizations (PEO) companies will put a downward pressure on prices. The chart shows how prices are changing within the industry, month-to-month over the last three years.

example price index trendline

Income Statement (Average Financial Metrics)

Financial metrics provide a snapshot view of a benchmark "average" company. Key business metrics show revenue and operating costs. The data collected covers both public and private companies.

Industry AveragePercent of Sales
(Industry Benchmark)
Total Revenue

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Operating Revenue
Cost of Goods Sold
Gross Profit

Operating Expenses
Pension, profit sharing plans, stock, annuity
Rent paid on business property
Charitable Contributions
Domestic production activities deduction
Compensation of officers
Salaries and wages
Employee benefit programs
Taxes and Licenses
Bad Debts
Other Operating Expenses
Total Operating Expenses
Operating Income
Non-Operating Income
EBIT (Earnings Before Interest and Taxes)
Interest Expense
Earnings Before Taxes
Income Tax
Net Profit
Source: AnythingResearch Analysis of U.S. federal statistics

Financial Ratio Analysis

Financial ratio information can be used to benchmark how a Professional Employer Organizations (PEO) company compares to its peers. Accounting statistics are calculated from the industry-average for income statements and balance sheets.

Profitability & Valuation RatiosIndustry Average
Company valuation can be measured based on the firm's own performance, as well as in comparison against its industry competitors. These metrics show how the average company in the Professional Employer Organizations (PEO) industry is performing.
Profit Margin
Gross Profit Margin, Operating Profit Margin, and Net Profit Margin. Show company earnings relative to revenues.
Return on Equity (ROE)
Return on Equity (ROE) is net income as a percentage of shareholders' equity. Shareholders' Equity is defined as the company's total assets minus total liabilities. ROE shows how much profits a company generates with the money shareholders invested (or with retained earnings).
Return on Assets (ROA)
Return on Assets (ROA) is net income relative to total assets. The market research on Professional Employer Organizations (PEO) measures how efficiently the company leverages its assets to generate profit. ROA is calculated as Net Income divided by Total Assets.

Liquidity RatiosIndustry Average
Bankers and suppliers use liquidity to determine creditworthiness and identify potential threats to a company's financial viability.
Current Ratio
Measures a firm's ability to pay its debts over the next 12 months.
Quick Ratio (Acid Test)
Calculates liquid assets relative to liabilities, excluding inventories.

Efficiency Ratios - Key Performance IndicatorsIndustry Average
Measure how quickly products and services sell, and effectively collections policies are implemented.
Receivables Turnover Ratio
If this number is low in your business when compared to the industry average in the research report, it may mean your payment terms are too lenient or that you are not doing a good enough job on collections.
Average Collection Period
Based on the Receivables Turnover, this estimates the collection period in days. Calculated as 365 divided by the Receivables Turnover
Inventory Turnover
A low turnover rate may point to overstocking, obsolescence, or deficiencies in the product line or marketing effort.
Fixed-Asset Turnover
Generally, higher is better, since it indicates the business has less money tied up in fixed assets for each dollar of sales revenue.

Compensation & Salary Surveys for Employees

Compensation statistics provides an accurate assessment of industry-specific jobs and national salary averages. This information can be used to identify which positions are most common, and high, low, and average annual wages.

TitlePercent of WorkforceBottom Quartile Average (Median) SalaryUpper Quartile
Management Occupations 2%

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Chief Executives0%
General and Operations Managers1%
Office and Administrative Support Occupations 21%
Information and Record Clerks 5%
Other Office and Administrative Support Workers 7%
Office Clerks, General 5%
Office Clerks, General 5%
Production Occupations 22%
Assemblers and Fabricators 9%
Miscellaneous Assemblers and Fabricators 8%
Team Assemblers 6%
Other Production Occupations 9%
Miscellaneous Production Workers 6%
Transportation and Material Moving Occupations 22%
Material Moving Workers 21%
Laborers and Material Movers, Hand 18%
Laborers and Freight, Stock, and Material Movers, Hand 14%
Source: Bureau of Labor Statistics

Professional Employer Organizations (PEO) Industry Market Share [PREMIUM]

Largest companies in the industry and related industries, with private company revenue estimates.

CompanyAddressRevenue Estimate

Innovation News

  • Specialtycare Iom Services trademarks "OPTIMIZEOR" - software (SaaS) used to track/collect, analyze and report data pertinent to more effectively manage the flow of patients having surgery, surgeon performance, and related clinical data at hospitals, surgery centers or other relevant healthcare settings - 02/02/2018

  • Top Innovators

    CompanyInnovation Score
    Specialtycare Iom Services

    Additional companies, details and innovation scoring in the full report.

    Latest Industry News

    • AdminiSMART Launches Easy HRO, the “Un-PEO” - AdminiSMART is excited to announce the launch of an alternative solution that allows small and mid-sized businesses a way to acquire essential employee management services without the high price tag of a PEO (Professional Employer Organization). (01/10/2018)
    • G&A Partners Acquires Denver-Based Employer Essentials - HOUSTON--(BUSINESS WIRE)--G&A Partners, a leading national professional employer organization (PEO), announced today that it has acquired the accounts of Denver-based Employer Essentials. With the acquisition, G&A Partners now serves over 1,000 clients and ... (01/10/2018)
    • GEX Management Continues its Northwest Arkansas Expansion Through Strategic Commercial Acquisition - DALLAS, Jan. 5, 2018 /PRNewswire/ -- GEX Management, Inc. (GXXM), an industry-progressive licensed Professional Employer Organization (PEO) and Professional Services Company, today announced the completion of its acquisition of a significant and strategic ... (01/08/2018)
    • Insperity’s president to retire from post in May, but will remain on PEO’s board - Professional employer organization Insperity Inc. (NYSE: NSP) announced President Richard Rawson, an executive officer of Insperity for more than 28 years, will retire on May 18. However, Rawson will remain on the board of directors. As president ... (01/08/2018)
    • What's a certified PEO and how can they help your brokerage? - Many brokers and small business leaders have heard of professional employer organizations (PEO). However, it is still common within the industry to not fully understand how to distinguish one PEO from another. Until recently, one way this was done was ... (01/05/2018)
    • Elements Global Services Announces Sale of Elements PEO - Elements PEO (Professional Employer Organization), to a strategic acquirer. The tactical move affords Elements Global Services greater flexibility to hone and expand their Global EOR services and place a laser-focused emphasis on Global Technology (HRIS ... (01/03/2018)
    • The Single Platform Solution for Hybrid IT - A portfolio company of Morgan Stanley Global Private Equity, CoAdvantage is a professional employer organization (PEO) that provides HR outsourcing to small businesses and medium-sized businesses. It serves close to 3,000 clients, with a range that extends ... (12/22/2017)
    • Oasis Outsourcing Named Certified Professional Employer Organization (PEO) by the Internal Revenue Service (IRS) - WEST PALM BEACH, Fla., July 17, 2017 /PRNewswire/ -- Oasis Outsourcing, the nation's largest privately held Professional Employer Organization (PEO), is pleased to announce that one of its subsidiaries has been recognized as a Certified Professional ... (07/17/2017)
    • PEOs: A New Potential for Workers’ Comp Fraud? - To effectively compete in this new business world, employers are attempting to shift the burden of workers’ compensation costs to entities known as Professional Employer Organizations ... stage for the emergence of PEO-related workers’ compensation ... (10/01/2013)
    • An end to annoying paperwork? - FSB Magazine -- Dear FSB: I enjoyed the March 2007 article "Cure Your HR Ills." I own a small real estate firm that began using a Professional Employer Organization (PEO) years ago when I saw I couldn't compete with larger companies' benefits. But because ... (08/29/2007)

    Government Contracts

    In 2016, the federal government spent a total of $32,501,393 on Professional Employer Organizations (PEO). It has awarded 193 contracts to 45 companies, with an average value of $722,253 per company.   

    Top government vendors:

    CompanyFederal ContractsTotal Award Amount

    Growth Opportunities / Competitive Threats

    Companies in other industries may also sell similar products. Since there is an overlap in the customer base, there may be an opportunity for companies in Professional Employer Organizations (PEO) to sell additional products/services offered by these adjacent industries. Alternatively, these industries may identify further products in this industry to target. Products most at risk are those with the highest profit margins and lowest barriers to entry.

    The following industries are competing channels for sales of similar products/services.

    Payroll Services
    Competing IndustrySales Relative to Professional Employer Organizations (PEO)Opportunity/Threat
    Payroll Services
    Offices of Certified Public Accountants
    Management Consulting Services Competing industry
    Administrative Management & General Management Consulting Services Competing industry
    Tax Preparation Services Competing industry

    Sales from other industries of Payroll Services are less than those from Professional Employer Organizations (PEO). This may mean that other channels are a competitive risk of increasing their Payroll Services sales, taking market share from this industry.
    Payroll Services Product Sales Report

    Temporary Staffing Services
    Competing IndustrySales Relative to Professional Employer Organizations (PEO)Opportunity/Threat
    Temp Agencies & Staffing Services
    Employment Placement Agencies
    Custom Computer Programming & Software Development Services
    Computer Systems Design Services
    Computer Facilities Management Services Competing industry

    Sales from other industries of Temporary Staffing Services are less than those from Professional Employer Organizations (PEO). This may mean that other channels are a competitive risk of increasing their Temporary Staffing Services sales, taking market share from this industry.
    Temporary Staffing Services Product Sales Report

    Segments classified within this market research report

    This industry market research report includes companies whose primary business is any of the following:
    PEO (professional employer organizations), Professional employer organizations (PEO), Labor leasing services, Employee leasing services, Staff leasing services, etc.

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