PEO Revenues
NAPEO estimates the PEO industry grew a very robust $5 billion in 2008, to $68 billion in gross revenues. (The industry defines gross revenues as the total of its clients' payrolls and the fees PEOs charge them for taking on their human-resource activities.) Small- and medium-sized businesses outsource to PEOs everything from administering the payroll and paying employment related taxes, to risk management, recruiting, providing health benefits, and securing workers' compensation coverage.
About 700 PEOs are operating in 50 states. The industry's gross revenue has grown as PEOs attract more diverse, fast-growth clients and the typical salary of the worksite employees increases. PEOs' expanded human resources services and employee benefits provide a high value and efficient outsourcing option for businesses from many different industries
Improved Benefits
PEOs help tens of thousands of companies provide benefits such as healthcare plans, 401(k) tax-free savings accounts and other perks to working Americans. Forty percent of businesses that use PEOs upgrade their benefit packages as a result. PEO sponsored benefit programs can include major and supplemental healthcare choices, including vision and dental care, employee assistance programs and even adoption assistance. Workers at small businesses with access to a 401(k) dropped from 28 percent to just 19 percent, the Small Business Administration estimates. However, an estimated 95 percent of workers in a PEO arrangement have access to a pension plan.
Source: NAPEO website - excerpt from PEO Industry Facts.