NAPEO
The results of NAPEO’s PEO Pulse Survey for the second quarter of 2025 show the PEO industry with strong momentum. Compared to the same period in 2024, survey results show widespread increases in revenue, profitability, client count, and worksite employees (WSEs), alongside continued wage pressures and steady-to-improving workers’ compensation claims. Importantly, optimism for the year ahead remains high.
KEY FINDINGS
Revenue and Profitability Gains
Three out of four firms (75%) experienced revenue growth versus Q2 2024, with the majority describing it as “somewhat higher” (68%). Only 3.6% reported declines. Profitability gains were even more widespread. Nearly 79% of PEOs increased gross profit, with only 7% reporting declines.
Clients and Worksite Employees
More than 7 in 10 PEOs (72%) reported an increase in clients, up sharply from Q1 2025, when fewer than half reported gains. Only 11% of firms reported declines in client count, highlighting a largely stable client base across the industry. At the same time, client employee counts are also trending upward. About one-third of PEOs (32%) reported higher average WSEs per client, while most others (57%) said this measure held steady. Only 11% reported decreases. The results indicate that employment at client companies was steady overall, with increases outpacing decreases.
Outlook: Continued Positive Momentum
Expectations for the next 12 months remain very strong. Nearly all PEOs (93%) anticipate growth in worksite employee counts, with 18% forecasting significant increases. Only 7% expect stability, and no respondents project declines.
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