Professional Employer Organizations in the US
The Professional Employer Organizations industry comprises organizations that specialize in providing human resource management and administrative services through a coemployment relationship. Industry participants are responsible for all aspects of employee management, including hiring, payroll and benefits administration. Overall, industry revenue is expected to grow over the five years to 2018. Demand for professional employer organizations has increased dramatically as overall economic activity increased and the number of small businesses expanded. In addition, corporate profit has grown over the five-year period, driving new demand for outsourced human resource administration from larger businesses. Over the five years to 2023, the industry is expected to continue growing, although at a slower pace, as the number of businesses and employees in the United States gradually increase. Furthermore, the ability of PEOs to offer a broader range of services and benefits, such as comprehensive retirement plans and health insurance coverage, will boost the attractiveness of outsourced HR services to smaller businesses.
Operators in this industry provide HR management and administration services through a coemployment 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.
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.
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