The global professional employer organizations (PEOs) market is expected to grow with a CAGR of 11.2% during the forecast period. A professional employer organization handles payroll, training and hiring of employees, management of expenses, and other HR-related functions for another company. It helps in reducing the time and cost of hiring and training employees, thereby allowing organizations to concentrate on their key business areas. Many organizations outsource these services to help the employees in managing HR functions and also for employee benefits.
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Organizations are opting for professional employer organization due to numerous employee benefits such as medical and dental coverage, retirement plans, and others at a reasonable price, as professional employer organization can benefit from the economies of scale. Companies can save costs associated with the delay in hiring caused due to other important in-house functions. In addition to these, the reduction in paperwork, risk management, and HR solutions are some of the functions in which organizations can benefit through professional employer organization. Employee security is the main concern related to professional employer organization, which in turn can hinder the future market demand. It is difficult for organizations to keep track of changing rules and regulations of the industry, which can be tracked by a dedicated professional employer organization and thus, the market can witness a significant demand during the forecast period.
The professional employer organization market is segmented on the basis of deployment type, application, organization size, and region. On the basis of applications, the market is segmented as risk management, regulatory compliance, withholding and taxation, payroll services, human capital management, insurance services, and others. Among these, the payroll services segment is expected to witness significant growth during the forecast period, owing to the need for timely employee payments, tracking employee attendance, and various other features. Based on regions, the Asia-Pacific region is expected to witness significant growth, owing to the rising need for handling the employee hiring process of the small and medium enterprises in the region, for expanding their business.
The key players in the market are Ahead Human Resources, Alcott HR, CoAdvantage, FrankCrum, Human Capital, Oasis Outsourcing, Pinnacle PEO Corporation, Synergy HR, TriNet, XcelHR, and others. Various business strategies such as mergers & acquisitions, joint ventures, partnerships, and others are taken up by companies to expand their product portfolio and generate revenue. For instance, in July 2018, Oasis Outsourcing, a leading professional employer organization, has acquired Aureon HR, to provide superior customer service and expand their client base.