Definition: A professional Employer Organization, or PEO, is a Human Resources Outsourcing (HRO) partner for your business that makes having employees easier and less risky through a unique HR outsourcing relationship.
The average client of a NAPEO (National Association of Professional Employer Organizations) member company is a business with 19 worksite employees. Increasingly, larger businesses also are finding value in a PEO arrangement, because PEOs offer robust web-based HR technologies and expertise in HR management. PEOs can partner with companies that have 500 or more employees and work in conjunction with their existing human resources department.
PEO clients include different types of businesses ranging from accounting firms to high-tech companies and small manufacturers. A broad range of professionals, including doctors, retailers, mechanics, engineers and plumbers, also benefit from PEO services.
PEOs provide services to 175,000 small and mid-sized businesses, and 3.7 million employees.
The industry has already grown by almost 10 percent from 2008 to 2017. The industry will continue to expand, and even more small businesses will benefit from working with these types of organizations.
(Source: Business News Daily)
From 2008 to 2017, the number of worksite employees with shared employment through a PEO grew at a compounded annual rate of 8.3%. This percentage growth in the PEO industry is 14 times higher than that of employment in the United States economy as a whole.