Recent NAPEO Research Showcases Growth and Diversity Among PEO Clients Nationwide

NAPEO Research Unveils Growth and Diversity Among PEO Clients

On October 17, 2025, the National Association of Professional Employer Organizations (NAPEO) revealed critical insights into the evolving landscape of businesses leveraging professional employer organizations (PEOs). This latest research underscores the persistent growth and increasing diversity of PEO clients, especially among small and mid-sized enterprises — the cornerstone of the U.S. economy.

According to the findings, over 230,000 U.S. businesses currently partner with PEOs, accounting for approximately 15% of all employers with workforces between 10 to 499 employees. Notably, PEO clients are distributed across every state, with substantial concentrations in Florida (25%), Texas (13%), California (11%), and New York (10%). This widespread adoption reflects PEO clients' representation within nearly all major industry sectors, most prominently in Professional, Scientific, and Technical Services, Healthcare and Social Assistance, Construction, and Manufacturing.

NAPEO President and CEO, Casey Clark, remarked, "Since our previous study in 2022, PEOs continue to amplify their influence across diverse business sizes. Smaller businesses are now embracing PEOs more than ever, and they are scaling alongside the firms they support. As a result, a greater number of American workers are reaping the benefits of PEO partnerships than at any time in history."

The research undertaken by economists Laurie Bassi and Dan McMurrer utilized a client database that is now tenfold larger than previous studies, which has led to enhanced precision in demographic estimates, including detailed breakdowns categorized by state and Congressional district.

Clark emphasized, "This data reiterates our longstanding belief that PEOs serve as vital growth engines and crucial partners for American organizations. Across all sectors, PEOs assist businesses in providing comprehensive employee benefits, ensuring compliance with state and federal regulations, and sharpening their focus on growth and success."

It's worth noting that NAPEO, as the voice for the PEO industry, comprises 187 member PEOs, which collectively deliver payroll, benefits, workers' compensation, regulatory compliance assistance, and other HR services to over 230,000 small and mid-sized companies, employing more than 4.5 million individuals. These members generate revenue exceeding $372 billion, reflecting their significant economic footprint. Furthermore, an additional 207 companies offering services to PEOs also stand as associate members of the organization, illuminating the expansive network surrounding the PEO framework.

As businesses navigate the complexities of an ever-evolving economic landscape, NAPEO's insights into the growth and diversity of its clients provide a timely reminder of the pivotal role that PEOs play in supporting small and mid-sized enterprises. Through facilitating valuable employee benefits and regulatory compliance, these organizations not only bolster business operations but also promote economic stability across various sectors.

For more details about NAPEO's research and its implications, interested parties can visit the official website at www.napeo.org. This comprehensive report heralds a promising future for PEO clients and exemplifies the critical support of PEOs in catalyzing small business success across the nation.