The Professional Employment Organization industry has long been a cornerstone of Florida's economy by offering employers an option to fulfill their staffing needs while assisting in other areas the employer may not have the resources to provide. Among other things, PEOs can provide workers' compensation and health insurance programs at affordable rates, while also helping employers manage payrolls, institute safety programs, and comply with all state and federal regulations. By providing these services, PEOs allow employers to focus on their primary goal of growing a profitable business, which, in turn, provides new jobs and helps expand the state's economy. Just how popular is the PEO industry? A survey conducted by the Florida Association of Professional Employment Organizations found that they provided more than 50,000 employers with nearly 700,000 work-site employees, representing a payroll in excess of $17 billion.

PEOs and Employers

Florida often is referred to as the birthplace of the PEO industry. Starting in the 1970s, employees began searching for a method to secure the services of occasional workers without having to be burdened with handling all the administrative tasks that come with hiring an employee. This was especially prevalent among employers who needed workers for seasonal jobs, such as employers in the agricultural industry. As the leasing concept grew, however, other employers saw the advantage of entering into relationships with PEOs for a variety of reasons. One advantage for smaller and mid-sized employers is that PEOs provided greater access to affordable insurance since the organization's aggregate premium increased its buying power in the market. As for larger employers, PEOs became the answer to a trend among companies looking to outsource their human resource needs, which freed companies up to focus on their core business. When looking at the PEO industry, the first lesson is that one size doesn't fit all. PEOs specialize in everything from the type of employers, the number of work-site employees, and the overall size of the client company. Based on those factors, employers have diverse needs that may be focused primarily on insurance or other services. Right now, those in the PEO industry say the industry is booming in two distinct markets. One segment includes the PEOs who are looking to serve smaller clients, which generally have less than 20 work-site employees. The other segment is PEOs that specialize in larger companies, which can range from in excess of 50 work-site employees on up.