Professional Employer Organizations in the US - Market Research Report (2014-2029)

Monetary tightening: Industry revenue will continue to grow, but at a slower rate

This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.

Over the five years to 2023, revenue in the Professional Employer Organizations industry has increased at an annualized rate of 8.8% to $351.6 billion, including an expected increase of 2.1% in 2023 alone. During the past five years, industry revenue has been more volatile than usual due to high volatility in the labor market caused by COVID-19. With the unemployment rate more than doubling in 2020, industry revenue experienced a 1.3% decline in the same year. However, a strong recovery in the labor market in subsequent years caused industry revenue to increase 20.8% in 2021 and 16.5% in 2022. In 2023, revenue is expected to grow only 2.1% as the unemployment rate is expected to increase.

Operators in this industry provide human relations management and administration services through a co-employment relationship. Professional employer organizations (PEOs) are responsible for employee administration; they serve as the legal employer while employees work on-site for the client. PEOs pay wages and associated employment costs in exchange for a fee, which covers the expenses, plus a margin for services, including payroll, tax remittance and benefits administration.