PEO Revenues Up, Industry Poised For Massive Growth

For more than a decade, the PEO market has been ripe with opportunity. The PEO industry is comprised of approximately 700 firms that generate gross revenues (including payroll, taxes, and insurance premiums) of $51 billion. In total, the PEO industry services between two and three million employees and has been growing in excess of 20 percent a year. While these are very impressive numbers, the industry hasn't really even scratched the surface.

Currently, the domestic PEO industry’s core market, consisting of firms with fewer than 500 workers, employs an aggregate of 80.8 million workers. The average annual salary is approximately $25,000, yielding a potential market of more than $2 trillion dollars. The PEO industry has only penetrated approximately 2.5 percent of its core market. In short, there is much room for growth. This opportunity is attracting outside capital, fueling mergers and acquisitions, and, in turn, feeding consolidation.