In the wake of the post-pandemic “great resignation,” with unemployment stubbornly clinging to record-low numbers, stretched-out companies are increasingly turning to professional employer organizations and other outsourced labor providers. Some reports place the global value for outsourced business services at more than $250 billion in 2022, with an expected annual growth rate of nearly 10% through 2030; sparking debate about whether the traditional employment model will disappear. NJBIZ spoke with a number of experts to get their take on this important issue.
“The workplace will continue to evolve, and require agility to meet changing needs,” according to Kristen Appleman, senior vice president at ADP TotalSource, a PEO that services more than 20,000 small and mid-sized businesses across the country, employing a total of more than 770,000 workers. A PEO, or co-employer, typically becomes the employer of record for an entire company, taking on payroll and benefits administration and other tasks.
“The traditional employer model will no doubt continue, but more and more SMBs are turning to alternative employer models, notably co-employment,” Appleman added. “With SMBs being the backbone of the U.S. economy, employers will look for ways to grow and be successful, while addressing the complexities of changing workforce needs.”
She explained that co-employment “is a contractual relationship, in which a business and a PEO share certain employment responsibilities. This...
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