American business is undergoing fundamental changes in human resource management, and the PEO industry is one response to market demands.
There are several factors driving the growth of the industry. First, over the last two decades, this nation has seen a significant increase in employment-related federal, state, and local laws and regulations. Second, the expertise required to manage a small to mid-sized business has outgrown the experience and training of many entrepreneurs who started these businesses. Third, working Americans demand quality, low cost health care, retirement savings plans, and other employee benefits for themselves and their families. In response to these demands, the PEO industry evolved from the need to divide the “business of business” into manageable parts and the need for small businesses to achieve economies of scale.