Asia-Pacific Professional Employer Organization (PEO) Market

Market Overview

The professional employer organization (PEO) market was valued at USD 11,045 million in 2021 and is projected to reach USD 31,400 million by 2030, registering a CAGR of 12.3% during the forecast period (2022-2030).

Professional employer organization (PEO), also known as human resource outsourcing, is an outsourcing organization that provides small and medium-sized enterprises with a cost-effective management and high-performance solutions for human resource (HR) services. It leases personnel to an employer, permitting the PEO to share and control many of the employer's employee-related responsibilities and liabilities. PEO provides businesses with essential administrative and management services, such as payroll, finance & taxation, employee recruitment, talent search management, and risk mitigation.

Asia-Pacific is anticipated to experience high growth due to the region's swiftly expanding SMBs. The Asia-Pacific region is the fastest-growing market for cloud-based outsourcing solutions and products, such as automation platforms. With their early adoption of automated personnel services, countries like Japan, South Korea, and Australia are already experiencing maturing growth. In addition, countries such as India, China, and Southeast Asia will likely experience significant growth during the forecast period. The increasing adoption of HR outsourcing services in nations such as the Philippines, India, and Thailand boosts regional market expansion.

Highlights

• Full-Service PEO dominates the market by type. 
• The large businesses segment dominates the market by end-use.

Market Dynamics

Asia-Pacific Professional Employer Organization (PEO) Market Drivers

Increasing Problems Concerning Employee Turnover

The need for businesses to comply with labor laws, which has increased over the past few years, is the primary factor influencing the expansion of the PEO market. Numerous significant organizations have a high employee turnover rate, resulting in additional expenses—for instance, training new employees.

A professional employer organization (PEO) is a business that offers a variety of services to its clients, including payroll and employee benefits. Employers who purchase these services from a PEO can reduce the cost of administering their employees' benefits while granting employees greater control over their benefits, resulting in increased employee retention and lower turnover rates.

Asia-Pacific Professional Employer Organization (PEO) Market Restraints

Lost Command of Important Processes

As organizations transition to a more flexible staffing model, they lose control of relevant processes, such as payroll administration, tax processing, and human resource management. In addition, they become more reliant on vendors for these essential business functions, which causes significant delays in time-sensitive operations (like payroll). Control is one of the critical aspects of decision-making, and this is particularly true in the relationship between an employer and an employee. When a business utilizes a professional employer organization, it relinquishes total control over its workforce in exchange for a service it values.

Asia-Pacific Professional Employer Organization (PEO) Market Opportunities

Rising Demand for Enhancing Cost Savings

Several small and medium-sized businesses (SMEs) have chosen professional employer organizations (PEOs) to manage employee payrolls, pay employees, locate human resources, and perform other related tasks. This helped small businesses not only survive but also save money. In addition to saving time and money, a PEO can manage various functions on behalf of employers. PEOs are advantageous for small and medium-sized businesses needing more resources, experience, or systems to manage payroll, the Human Resources Information System (HRIS), and other responsibilities. In addition to sparing the company money, compliance-related risks are identified and avoided in advance. The growth of the professional employer organizations (PEOs) market is driven by substantial cost reductions and a high rate of return.

Segmental Analysis

The professional employer organization market is segmented based on type and end-use.

Based on type, the Professional Employer Organization (PEO) market is segmented into Full-Service PEO and ASO.

The Full-Service PEO segment dominates the market and is expected to register a CAGR of 12.6% over the forecast period.

Based on end-user, the Professional Employer Organization (PEO) market is segmented into Small, Medium, and Large Businesses.

The large businesses segment dominates the market and is anticipated to grow at a CAGR of 11.5% over the forecast period.

Regional Analysis

Asia pacific is the second most significant revenue contributor globally and is expected to grow at a CAGR of 12.3% during the forecast period. Infostride designs, develops, and distributes digital products and experiences to support digital-first business models. The business provides services for remote teams, automates and Accelerate Staffing, and Ideate. Extended teams, project-based teams, EOR Services, and PEO Services comprise Remote Teams. Mobile engineering, web engineering, cloud engineering, data engineering, quality engineering, and DevOps make up Automate and Accelerate. Staffing services include contingent workers, direct hires, payroll, and contract-to-hire arrangements.

Ideate service includes UX and UI Design as well as LAB-as-a-Service. (LAAS). The business strategy of InfoStride is based on client requirements. The company's strategy is to offer affordable, high-quality services to its consumers.

Recent Developments

• April 2021- Paychex, Inc. was ranked first among all solution providers by the 2020-2021 Sapient Insights Annual HR Systems Survey – Voice of the Customer Report, Payroll Administration, and Services Application. Paychex is an HR software and services company that provides the power of simplicity for increasingly complex workplaces.
• April 2021- NelsonHall, an industry analyst firm, rated ADP as a Leader in its Payroll Services NEAT 2021 Assessment. Recognized as a Leader in Digital Payroll Capability, Multi-Country Capability, and Asia Pacific Presence and Capability, ADP's performance in every area of the evaluation results from its consistency in providing a modern payroll experience tailored to meet the challenges of an evolving world of work.