Top Human Resource (HR) Outsourcing Trends

By Chris Pisarkiewicz

PrismHR surveyed HR service provider professionals about key business issues and HR outsourcing trends.

The results indicate that HR service providers, including Professional Employer Organizations (PEOs) and Administrative Service Organizations (ASOs), continue to grow and help streamline the HR functions for small and medium-sized businesses (SMBs).

Below are some key human resources outsourcing industry trends to watch.

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HR service providers reported 22% average growth for 2017

The HR outsourcing industry saw another year of impressive growth. HR Service Providers reported an average worksite employee growth of 22% for 2017. Startups and smaller HROs serving 1,000 employees or less are seeing significant growth with an average growth of 35%.

32% of HRO executives anticipate at least 26% growth in 2018

PEO and ASO executives expect the growth to continue in 2018. Executives also noted that growth and profitability are the top two priorities for their organizations. With 75% of HR outsourcing executives expecting to grow 11% or more in 2018, it’s a good sign that this growth will continue.   

HR outsourcing trends for 2018 worksite employee growth in the HR outsourcing industry

58% of HRO executives reported over 95% customer retention 

A key component to growth is retaining your current customer base. It appears PEOs and ASOs are doing just that with 58% of HR service provider executives reporting over 95% retention rate for 2017 and only 5% of HRO executives reported less than 86% customer retention.

This is a very strong indication that small and medium-sized businesses need and value the HR services and technology their PEO/ASO is providing.

Download the 2018 Human Resource Outsourcing (HRO) Trends Report or the updated 2019 report to learn more of the latest trends and insights in the HR industry, including HR outsourcing trends, trends in HR services, market trends, technology and human resources software trends, growth trends, and how this data compares historically.

Human resource outsourcing trends: 2017 customer retention trends in the HR outsourcing industry

Download the HR Outsourcing Trends Report to learn more of the latest trends and insights in the HR outsourcing industry, including trends in HR services, HR marketplace trends, technology trends, growth trends, and how this data compares historically.

Unfamiliar with the PEO model of HR outsourcing? Learn more here: What is a PEO?