Quick Summary: PEO Statistics
| Metric | Latest Data | Source |
|---|---|---|
| U.S. PEO industry revenue | $414B (2026) | NAPEO |
| Businesses using a PEO | 230,000+ (2025) | NAPEO |
| Worksite employees covered by PEOs | 4.5M (2025) | NAPEO |
| PEO penetration, employers with 20 to 499 employees | 14% (2025) | NAPEO |
| PEO client employment growth vs comparable firms | 4.3% vs 1.9% (2024) | NAPEO |
| Annual business failure rate, PEO clients vs non-clients | 4.98% vs 7.50% (2024) | NAPEO |
| Cost-savings ROI of using a PEO | 27.2% per year (2019) | NAPEO |
| Unaided awareness of PEOs among SMB decision makers | 67% (2024) | NAPEO |
| Largest PEO by worksite employees | ADP TotalSource, 775,000 (FY2026) | ADP |
| Global PEO market forecast | $81.75B (2026) to $189.76B (2034) | Straits Research |
Key Takeaways
- The U.S. PEO industry has more than quadrupled since 2012 and now generates $414B in revenue across 500+ providers, according to NAPEO’s 2026 figures.
- PEO adoption is concentrated: 14% of employers with 20 to 499 employees use one, but penetration reaches 38% in the Information sector and 50% in Hawaii.
- PEO clients grew headcount at 4.3% in 2024, more than double the 1.9% rate of comparable employers, and were 50% less likely to go out of business.
- The market is top-heavy, with the 5 largest PEOs holding 39% of all worksite employees, and 2026 results show scale is diverging: ADP grew 2% while TriNet’s co-employed WSEs fell 11%.
- Demand is being pushed by cost pressure: family health premiums hit $26,993 in 2025, 68% of SMB leaders name healthcare costs as a top challenge, and 87% of non-users say they are interested in a PEO.
PEO industry size and growth
The most reliable size estimates come from NAPEO’s industry footprint research, which counts every PEO with a public presence rather than relying on NAICS codes. The industry has grown every year since 2008 except 2020, and the pace has not slowed as it matured.
One caution: revenue figures differ by source because NAPEO counts gross billings including client payroll, while IBISWorld uses a narrower industry definition.
Stat 01
$414B
industry revenue
The U.S. PEO industry generates $414B in annual revenue
NAPEO’s 2026 figures put industry revenue at $414B, up from $358B in 2024 and $254B in 2022. More than 500 PEOs serve 230,000+ client businesses employing 4.5M worksite employees.
↗ Source: NAPEO Industry Research & Data
Industry footprint, 2026
500+
PEOs operating in the U.S.
230K+
client businesses
4.5M
worksite employees
Stat 02
4.5M
worksite employees
PEO worksite employees have nearly tripled since 2008
PEOs covered 1.65M worksite employees in 2008 and 4.52M by the end of 2022, a compound annual growth rate of 7.5%. Headcount grew every year except 2020, when it dipped 0.4% during the pandemic.
↗ Source: NAPEO, PEO Industry Footprint 2023
Worksite employees covered by PEOs
2008: 1.65M
2020: 4.0M
2022: 4.5M
2025: 4.5M+
Stat 03
19%
annual wage growth
Client counts grew faster than worksite employees, 2020 to 2022
Between 2020 and 2022 the number of PEO clients rose 10% a year while worksite employees rose 7%, so PEOs were signing somewhat smaller clients. Total wages paid to worksite employees climbed from $216B to $308B, a 19% annual increase.
↗ Source: NAPEO, PEO Industry Footprint 2023
Compound annual change, 2020 to 2022
Stat 04
7.5%
CAGR since 2008
PEO employment grew 12 times faster than the U.S. labour force
From 2008 to 2022, worksite employees at PEOs grew at a compound annual rate of 7.5%. Total U.S. employment grew 0.6% a year over the same period, based on Bureau of Labor Statistics data.
↗ Source: NAPEO, PEO Industry Footprint 2023
Compound annual growth, 2008 to 2022
U.S. employment
0.6%
Civilian employment growth per year, BLS Current Population Survey.
PEO worksite employees
7.5%
Growth per year in employees covered by PEO arrangements.
Stat 05
$254.8B
–$414B
–$414B
U.S. revenue estimates
Revenue estimates differ by $159B depending on definition
IBISWorld sizes the U.S. PEO industry at $254.8B in 2026, growing 1.4% in the year. NAPEO reports $414B for the same period. The gap comes from what counts as revenue, not from disagreement about industry activity.
↗ Source: IBISWorld
Two ways to measure the same industry
IBISWorld, 2026
$254.8B
Based on NAICS 56133 establishment data with a narrower revenue scope.
NAPEO, 2026
$414B
Gross revenue including client payroll processed through PEO tax IDs.
NAPEO’s figure treats wages paid under the PEO’s EIN as industry revenue, which is why it runs far higher than establishment-based estimates.
Stat 06
17%
of firms with 10 to 99 employees
PEO client count equals 17% of all firms with 10 to 99 employees
Measured against the number of U.S. private employers with 10 to 99 staff, PEO clients rose from 7.8% in 2008 to 17.0% in 2022. NAPEO notes this is a relative size comparison, not a true penetration rate, because about a quarter of PEO clients fall outside that size band.
↗ Source: NAPEO, PEO Industry Footprint 2023
Who uses a PEO: client profile
NAPEO’s 2025 client analysis is the first to draw on a database of more than 50,000 PEO clients, roughly 10 times the sample used in 2022, with state-level estimates for all 50 states. The picture it gives is of an industry built on small employers in professional services, construction, healthcare and manufacturing, clustered heavily in four states.
Stat 07
50%
of clients have 10 to 49 employees
Half of PEO clients employ 10 to 49 people
Businesses with 10 to 49 employees make up 50% of PEO clients, and another 35% have fewer than 10. Only 15% have 50 or more staff, and clients with 500+ employees round to zero.
↗ Source: NAPEO, PEO Clients 2025
PEO clients by employee count, 2025
10 to 49 employees, 50%
Fewer than 10 employees, 35%
50 to 499 employees, 15%
Stat 08
49%
of clients in 4 industries
Professional services firms are the largest PEO client group
Professional, scientific and technical services (law, accounting, engineering, consulting) account for 19% of PEO clients. Construction, healthcare and manufacturing bring the top four industries to 49% of all clients.
↗ Source: NAPEO, PEO Clients 2025
Share of PEO clients by industry, 2025
Stat 09
51%
of clients in 4 states
Florida, California, New York and Texas hold half of PEO clients
Florida alone has an estimated 43,000 PEO clients, 18% of the national total, followed by California at 16%. Utah stands out among mid-sized states with 7,300 clients, more than Ohio or Michigan.
↗ Source: NAPEO, PEO Clients 2025
Estimated PEO clients by state, 2025
43,000
Florida
38,000
California
22,000
New York
18,000
Texas
Stat 10
42%
of large-PEO clients have 20+ staff
The largest PEOs serve bigger clients than the rest of the market
At the largest quarter of PEOs, 42% of clients have 20 to 499 employees. At the smallest quarter, that share is 28%, and healthcare businesses make up 15% of their clients versus 8% at the largest PEOs.
↗ Source: NAPEO, PEO Clients 2025
Clients with 20 to 499 employees, by PEO size
Smallest quarter of PEOs
28%
43% of their clients have fewer than 10 employees.
Largest quarter of PEOs
42%
33% of their clients have fewer than 10 employees.
Stat 11
7,200
clients in one district
New York’s 12th congressional district has the most PEO clients
Manhattan’s NY-12 holds an estimated 7,200 PEO clients, followed by NY-10 at 4,300 and Florida’s 14th district (Tampa) at 4,200. Only 60 of the 435 districts exceed 1,000 clients, and the smallest have roughly 40.
↗ Source: NAPEO, PEO Clients 2025
PEO penetration rates by size, industry and state
Penetration rate means the share of all businesses in a category that are PEO clients. NAPEO redefined its benchmark in 2025 to employers with 20 to 499 employees, the band where PEOs have gained real traction, so the 14% headline is not directly comparable with the 10 to 99 employee figures in older reports. Across all U.S. businesses, including the majority with fewer than 5 employees, penetration is only about 4%.
Stat 12
14%
of employers with 20 to 499 staff
1 in 7 mid-sized employers uses a PEO
Among U.S. businesses with 20 to 499 employees, 14% are PEO clients as of 2025. Penetration peaks at 15% for firms with 50 to 99 employees, but falls to about 4% when every business in the country is counted.
↗ Source: NAPEO, PEO Clients 2025
Estimated PEO penetration, 2025
15% of firms with 50 to 99 employees
13% of firms with 100 to 499 employees
4% of all U.S. businesses
Stat 13
15%
peak penetration by size
PEO use climbs sharply once a business passes 20 employees
Only 1% of businesses with 1 to 4 employees and 4% of those with 5 to 9 use a PEO. The rate doubles to 8% at 10 to 19 employees and nearly doubles again to 14% at 20 to 49, before tapering slightly above 100 staff.
↗ Source: NAPEO, PEO Clients 2025
Penetration rate by business size, 2025
Stat 14
38%
of Information firms use a PEO
Information and real estate firms adopt PEOs at nearly 3 times the average
Among employers with 20 to 499 staff, penetration reaches 38% in the Information sector, 33% in real estate and 30% in professional services. Accommodation and food services sit at the bottom at 3%.
↗ Source: NAPEO, PEO Clients 2025
Penetration by industry, employers with 20 to 499 employees
Use a PEO
Do not use a PEO
Stat 15
50%
penetration in Hawaii
Half of Hawaii’s mid-sized employers use a PEO
Hawaii (50%), Florida (45%) and Utah (38%) have penetration rates far above the 14% national figure among employers with 20 to 499 staff. At the other end, South Dakota sits at 1% and North Dakota at 2%.
↗ Source: NAPEO, PEO Clients 2025
Highest state penetration rates, 2025
Measured business outcomes for PEO clients
The outcome data below comes from NAPEO’s 2024 white paper, which compared PEO clients against matched non-clients using the ADP National Employment Report, the BLS JOLTS series and state corporate registries. These are correlations, not proof of cause, but the methodology controls for size, industry, location and growth rate, which makes it far more rigorous than the vendor surveys usually cited.
Stat 16
2x
growth rate of PEO clients
PEO clients grow twice as fast and fail half as often
Relative to comparable non-users, businesses using a PEO have a growth rate more than 2 times higher, employee turnover 12% lower and are 50% less likely to go out of business. NAPEO has reported similar patterns in every white paper since 2013.
↗ Source: NAPEO Industry Research & Data
Headline findings, 2024 white paper
2x
higher employment growth
12%
lower employee turnover
50%
less likely to close
Stat 17
4.3%
annual headcount growth
PEO clients added staff at 4.3% versus 1.9% for comparable employers
Across 15,900 PEO clients with 316,500 employees, headcount grew 4.3% from January 2023 to January 2024. Employers with the same size mix grew 1.9% per the ADP National Employment Report, and BLS series showed 1.5% to 1.6%.
↗ Source: NAPEO, PEO Clients: Faster Growing, More Resilient (2024)
One-year employment growth, Jan 2023 to Jan 2024
Stat 18
50.4%
annual turnover, PEO clients
PEO client turnover runs 7.2 points below comparable businesses
Annualised turnover among PEO clients was 50.4% in January 2024, against 57.6% for businesses with the same size mix and growth rate. That gap is 12% in relative terms, and it persists after adjusting for the higher share of new hires at fast-growing firms.
↗ Source: NAPEO, PEO Clients: Faster Growing, More Resilient (2024)
Annual employee turnover rate, 2024
PEO clients
50.4%
Data from 20 PEOs covering 360,000 worksite employees.
Comparable non-clients
57.6%
BLS JOLTS rate adjusted for size and growth.
Stat 19
4.98%
annual closure rate
Non-clients were 50% more likely to close each year, 2020 to 2023
Using 1,015 matched pairs of businesses with identical industry, size and state, 4.98% of PEO clients went out of business per year versus 7.50% of non-clients. The analysis tracked firms from 2020 PPP loan records to state registry status in early 2024.
↗ Source: NAPEO, PEO Clients: Faster Growing, More Resilient (2024)
Average one-year non-survival rate, 2020 to 2023
PEO clients
4.98%
Share of businesses closing in an average year.
Non-clients
7.50%
Matched by industry, employee size and state.
Stat 20
4.8 pts
survival advantage
Construction and retail clients gain the most resilience from a PEO
PEO clients had higher one-year survival rates in every industry examined, but the gap ranged from 4.8 percentage points in construction, retail and finance to just 0.3 points in manufacturing. Healthcare showed a 0.8 point difference.
↗ Source: NAPEO, PEO Clients: Faster Growing, More Resilient (2024)
Survival rate difference, PEO clients vs non-clients (percentage points)
Stat 21
4.3 pts
for firms under 10 employees
The smallest businesses get the biggest survival boost
Businesses with fewer than 10 employees that used a PEO had a one-year survival rate 4.3 percentage points higher than matched non-clients. The advantage was positive in every size band, narrowing to 1.5 points at 10 to 19 employees before widening again above 50.
↗ Source: NAPEO, PEO Clients: Faster Growing, More Resilient (2024)
Survival rate advantage by client size (percentage points)
+4.3
fewer than 10 employees
+1.5
10 to 19 employees
+2.1
20 to 49 employees
+3.1
50 to 499 employees
PEO costs, savings and the benefits cost problem they solve
Only one independent ROI study exists for PEOs, and it dates from 2019, so we pair it here with current cost data from SEC filings, the Bureau of Labor Statistics and KFF. The through-line is simple: benefits are now 30% of what employers pay for labour, small firms pay more for worse coverage, and that gap is the core of the PEO sales case.
Stat 22
27.2%
annual ROI, cost savings only
The last independent ROI study put PEO cost savings at 27.2% a year
NAPEO’s 2019 study of 132 PEO clients found average savings of $1,775 per employee against a PEO cost of $1,395, with 54% of savings from lower HR staffing and 37% from health benefits. The figures are 2019 values and have not been updated since.
↗ Source: NAPEO, The ROI of Using a PEO (2019)
Savings per employee per year, 2019 study
$965 saved on internal HR staffing
$654 saved on health benefits
$156 saved on workers’ comp and other HR spend
Stat 23
$237
gross profit per WSE per month
A large PEO now earns about $2,844 per worksite employee a year
Insperity reported gross profit of $237 per worksite employee per month in Q2 2026, the closest public measure of what clients pay for service after pass-through costs. That is roughly double the $1,395 annual PEO cost NAPEO used in its 2019 ROI model, and benefits cost per covered employee rose another 5% in the year.
↗ Source: Insperity Q2 2026 results
Annual PEO service cost per worksite employee
NAPEO benchmark, 2018 data
$1,395
Industry average gross profit per WSE used in the 2019 ROI study.
Insperity, Q2 2026 annualised
$2,844
$237 per month, down 1% year on year on a per-WSE basis.
Stat 24
30.1%
of compensation is benefits
Benefits cost private employers $14.01 for every hour worked
In March 2026, private industry compensation averaged $46.60 per hour, of which $14.01 (30.1%) was benefits rather than wages. Insurance alone cost $3.51 per hour for the median-wage worker, which is the line item PEOs target through pooled plans.
↗ Source: U.S. Bureau of Labor Statistics, ECEC March 2026
Private industry employer costs per hour worked, March 2026
$46.60
total compensation
$32.60
wages and salaries
$14.01
benefits
$3.51
insurance at median wage
Stat 25
$8,889
worker family premium share, small firms
Workers at small firms pay $2,662 more toward family coverage
Covered workers at firms with 10 to 199 employees contributed $8,889 a year toward family premiums in 2025, against $6,227 at larger firms. 53% of small-firm workers also face a single-coverage deductible of $2,000 or more, compared with 28% at large firms.
↗ Source: KFF, 2025 Employer Health Benefits Survey
Annual worker contribution to family premium, 2025
Firms with 200+ workers
$6,227
28% face a $2,000+ single deductible.
Firms with 10 to 199 workers
$8,889
53% face a $2,000+ single deductible.
Stat 26
41%
call health insurance cost critical
Health insurance cost has been small business’s top problem since 1986
In NFIB’s 2024 Small Business Problems and Priorities report, 41% of owners rated the cost of health insurance a critical problem, 21 points ahead of the next issue. It has ranked first in every edition of the survey since 1986.
↗ Source: NFIB, Small Business Problems and Priorities 2024
Stat 27
52%
of PEO clients offer a retirement plan
Small PEO clients are more than twice as likely to offer a retirement plan
Among businesses with 10 to 49 employees, 52% of PEO users provide a retirement plan compared with 23% of non-users. Pooled plans with PEO-run administration remove the setup and fiduciary work that keeps most small employers out.
↗ Source: NAPEO Industry Research & Data
Retirement plan access, businesses with 10 to 49 employees
Non-PEO businesses
23%
Offer a retirement plan to employees.
PEO clients
52%
Offer a retirement plan to employees.
PEO awareness, adoption and buyer behaviour
NAPEO has commissioned the same tracking survey of about 500 U.S. business decision makers every year since 2018, run by research firm Povaddo. The 2024 report is public in full; the 2025 edition is members-only, so figures below come from NAPEO’s published summary.
Stat 28
67%
unaided awareness of PEOs
Awareness of the term PEO has risen 22 points since 2018
67% of SMB decision makers recognised the term PEO without prompting in December 2024, up from 45% when tracking began in February 2018. After reading a description, 78% said they were familiar with PEOs, though 34% wrongly associated them with supplying temporary staff.
↗ Source: NAPEO 2024 Annual Tracking Survey
Unaided awareness of PEOs among SMB decision makers
2018: 45%
2020: 59%
2022: 65%
2024: 67%
Stat 29
33%
of surveyed SMBs use a PEO
Reported PEO use has more than doubled since 2018 and rises with company size
33% of surveyed decision makers said their company uses a PEO in 2024, up from 14% in 2018. Use climbs from 18% at firms with 10 to 19 employees to 46% at firms with 100 or more, and is highest among businesses under 10 years old (38%) and those with outside investors (43%).
↗ Source: NAPEO 2024 Annual Tracking Survey
Share of surveyed firms using a PEO, by employee count, 2024
Stat 30
70%
of non-users have considered a PEO
7 in 10 non-users have considered a PEO, but only 27% have seen a proposal
Among businesses not using a PEO in 2024, 70% had considered one, 44% had spoken to a PEO and 27% had received a formal proposal. Of those who declined a proposal, 48% were still deciding and 22% said the cost was too high.
↗ Source: NAPEO 2024 Annual Tracking Survey
PEO consideration funnel among non-users, 2024
Reached this stage
Did not
Stat 31
61%
of SMBs outsource health insurance
Most SMBs already outsource the functions a PEO bundles
In NAPEO’s 2025 survey, 61% of decision makers outsourced health insurance benefits, 56% payroll and 50% retirement benefits, mainly to save time and focus on growth. In 2024, 46% named avoiding risks and costly mistakes as a top reason for outsourcing.
↗ Source: NAPEO 2025 Annual Tracking Survey
Business functions currently outsourced, 2025
61%
health insurance benefits
56%
payroll
50%
retirement benefits
Stat 32
76%
cite economic uncertainty
Economic uncertainty overtook hiring as the top SMB challenge in 2025
For the first time in the survey’s history, uncertainty about the economy (76%) ranked as the most challenging aspect of running a business, ahead of healthcare costs (68%). Recruiting (67%) and retention (62%) remained close behind.
↗ Source: NAPEO 2025 Annual Tracking Survey
Share of decision makers calling each issue challenging, 2025
Stat 33
87%
of non-users interested in a PEO
PEO users were 13 points more likely to report growth in 2025
80% of PEO users said their business grew in 2025 versus 67% of non-users, and 83% expect growth in 2026 against 75%. Nearly 9 in 10 non-users (87%) said they are interested in using a PEO in the future.
↗ Source: NAPEO 2025 Annual Tracking Survey
Businesses reporting growth in 2025
Non-PEO users
67%
75% expect to grow in 2026.
PEO users
80%
83% expect to grow in 2026.
Market structure and the largest PEOs
The PEO market is top-heavy, and 2026 results show the top tier pulling in different directions. Figures for the three listed PEOs come from their SEC filings and earnings releases; ADP reports on a June fiscal year, Insperity and TriNet on calendar quarters. The IRS count is our own tally of its certified PEO list, which lists legal entities rather than brands.
Stat 34
39%
of WSEs at the 5 largest PEOs
5 PEOs employ 39% of all worksite employees
The 5 largest PEOs accounted for an estimated 39% of the industry’s 4.5M worksite employees at the end of 2022, and the next 25 for another 19%. The remaining 493 PEOs split the other 42%, averaging under 4,000 WSEs each.
↗ Source: NAPEO, PEO Industry Footprint 2023
Share of worksite employees by PEO size, 2022
5 largest PEOs, 39%
Next 25 PEOs, 19%
Remaining 493 PEOs, 42%
Stat 35
775,000
ADP TotalSource worksite employees
ADP TotalSource is 2.5 times the size of the next largest PEO
ADP paid an average of 775,000 worksite employees through its PEO in the quarter to June 2026, with PEO revenues up 7% for the fiscal year. Insperity paid 305,764 in Q2 2026 and TriNet reported about 274,000 co-employed WSEs, meaning these 3 companies alone cover roughly 30% of the industry’s 4.5M.
↗ Source: ADP Q4 fiscal 2026 results (SEC filing)
Average paid worksite employees, quarter ending June 2026
Stat 36
-11%
TriNet co-employed WSEs, year on year
The big PEOs diverged in 2026: ADP grew while TriNet shed 11% of WSEs
TriNet’s co-employed worksite employees fell 11% year on year in Q2 2026 after it repriced health benefits to repair margins, cutting revenue 5% to $1.18B while adjusted EBITDA margin rose to 10.9%. Insperity slipped 1% and ADP grew 2% over the same period.
↗ Source: TriNet Q2 2026 results
Year-on-year change in worksite employees, Q2 2026
TriNet
-11%
Co-employed WSEs after Q1 repricing; insurance cost ratio improved to 86%.
ADP TotalSource
+2%
Driven by new business bookings; PEO margin down 100 basis points.
Stat 37
~120
IRS-certified PEO entities
Roughly 120 entities hold IRS certified PEO status
The IRS list of active certified PEOs dated August 7, 2026 contains about 120 legal entities, but many belong to the same brand (ADP TotalSource alone has 18 and Nextep 7), so the number of distinct certified providers is closer to 60. Certification, created by the Tax Increase Prevention Act of 2014, makes the CPEO solely liable for federal employment taxes it collects.
↗ Source: Internal Revenue Service, CPEO public listings
Stat 38
35%
of PEO users name ADP
ADP is named by 35% of businesses that use or used a PEO
Asked which PEO they use or used, 35% of decision makers named ADP, 12% Paychex, 6% Insperity and 5% TriNet. A further 22% named a company that is not actually a PEO, showing how much confusion still surrounds the category.
↗ Source: NAPEO 2024 Annual Tracking Survey
PEO named by current or former users, 2024
Outlook and forecasts for the PEO industry
Forecasts for this industry come from two very different places: market research firms projecting the global market, and the guidance that listed PEOs give investors. The former should be read as directional only, since published global estimates for the same year vary by more than $100B depending on how the market is defined. The latter is narrower but grounded in real client counts.
Stat 39
$81.75B
–$189.76B
–$189.76B
global market, 2026 to 2034
The global PEO market is projected to grow 11.1% a year through 2034
Straits Research values the global PEO market at $73.58B in 2025 and $81.75B in 2026, reaching $189.76B by 2034. North America is the largest region. Other research firms publish 2025 figures as low as $38.58B, so treat the absolute size as indicative and the growth rate as the more useful signal.
↗ Source: Straits Research
Global PEO market forecast
2026 estimate
$81.75B
Up from $73.58B in 2025.
2034 projection
$189.76B
Implies a compound annual growth rate of 11.1%.
Global market sizing counts PEO service fees only, which is why it runs far below NAPEO’s gross revenue figure for the U.S. alone.
Stat 40
5% to 7%
ADP PEO revenue growth guidance
ADP expects PEO revenue to grow 5% to 7% in fiscal 2027
For the year to June 2027, ADP guides to PEO Services revenue growth of 5% to 7%, or 3% to 5% excluding zero-margin benefits pass-throughs, with worksite employees up about 2%. The largest PEO is planning for steady volume growth and faster growth in pass-through benefits costs.
↗ Source: ADP Q4 fiscal 2026 results (SEC filing)
ADP fiscal 2027 outlook
5% to 7%
PEO revenue growth
3% to 5%
growth excluding pass-throughs
~2%
worksite employee growth
Stat 41
+41% to 72%
Insperity 2026 adjusted EBITDA guidance
Insperity plans for fewer worksite employees but far higher profit in 2026
Insperity forecasts 305,000 to 307,000 average paid worksite employees for 2026, down 1.0% to 1.6%, while guiding adjusted EBITDA up 41% to 72% to between $185M and $225M. The industry’s second-largest PEO is choosing margin recovery over volume after 2025 healthcare claims overran pricing.
↗ Source: Insperity Q2 2026 results
Insperity full-year 2026 guidance vs 2025
Paid worksite employees
-1.0% to -1.6%
305,000 to 307,000 on average.
Adjusted EBITDA
+41% to +72%
$185M to $225M.
Conclusion
The PEO industry has grown at 7.5% a year for more than 15 years, yet it still reaches only 14% of the mid-sized employers it is built for, which means most of its market is still ahead of it. The client data shows a clear profile: firms with 10 to 49 employees in professional services, construction and healthcare, concentrated in a handful of states, using a PEO mainly to buy benefits at a price they cannot get alone.
The outcome studies are consistent across a decade of NAPEO research, with faster growth, lower turnover and higher survival rates for clients, though cause and effect cannot be fully separated. What has changed in 2026 is the economics inside the PEO itself, as rising healthcare claims push the largest providers to reprice and accept slower headcount growth in exchange for margin.
For HR leaders and workforce planners at small and mid-sized companies, that shift means the PEO value case is increasingly about benefits cost control and compliance, and it is worth benchmarking a PEO quote against the $14.01 per hour employers now spend on benefits before deciding.
