Professional Employer Organizations Industry Overview

Excerpt from Professional Employer Organizations Report

Companies in this industry provide outsourced human resources and human resources management services to client businesses. Major US companies include Automatic Data Processing (ADP), Ceridian, Insperity, MAXIMUS, and Paychex.

Competitive Landscape

Job growth drives demand for PEOs. The profitability of individual companies depends on good marketing and efficient use of information technology. Large companies enjoy economies of scale in marketing and back-office operations. Small companies can compete successfully by specializing in an industry or a job function. The industry is concentrated: the 50 largest companies generate 55 percent of industry revenue.

Products, Operations & Technology

PEOs provide human resources management services to business clients, sharing responsibility as a co-employer. Specific services include payroll services, benefits administration, workers' compensation services, unemployment claims management, insurance sourcing, and risk management.