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Survey Shows Widespread Labor Shortage Keeping Businesses From Full Operations

July 8, 2021 GMT

ALEXANDRIA, Va., July 8, 2021 /PRNewswire/ -- According to a new survey by the National Association of Professional Employer Organizations (NAPEO), more than 92% of professional employer organizations (PEOs) report that most of their clients are experiencing labor shortages. Nearly 86% of PEOs say such shortages are preventing their clients from resuming normal operations.

The hospitality, construction, manufacturing, and retail sectors are experiencing the worst shortages. Over a third of respondents said the worker shortage was impacting all sectors. Most (80%) indicated that the shortage is widespread throughout the United States, though the Southeast and Midwest were reported as having the most pronounced worker shortage.

To combat the issue, respondents said businesses are offering higher wages (57%), signing bonuses (36%), and allowing for remote work options or flexible hours (31%). One third of respondents indicated that businesses were doing all of the above and more.


The survey of 250 PEOs – representing 173,000 businesses – was conducted June 21 through July 2.

PEOs provide HR, payroll, benefits, workers’ comp, and regulatory compliance assistance to small and mid-sized companies. The 173,000 businesses that partner with a PEO employ 4 million people, which is about the same as the combined number of employees for Walmart (U.S. only), Amazon, Kroger, and Home Depot. This means that PEO executives are in a unique position to understand the issues and challenges facing small businesses all across the country.

“Small businesses that were hit hard by COVID-19 are facing crippling labor shortages just as they try to recover,” says NAPEO President & CEO Pat Cleary. “Our survey clearly shows that this worker shortage has the potential to significantly impact our economic recovery because it is hindering the ability of small businesses to return to normal operations and do what they do best: Drive the U.S. economy. Small businesses are the backbone of the economy, and PEOs help hundreds of thousands of them thrive each day, but without enough workers, employers are being forced to reduce operations and scale back.”

The National Association of Professional Employer Organizations (NAPEO) is The Voice of the PEO IndustryTM. NAPEO’s 250 PEO members provide payroll, benefits, workers’ comp, regulatory compliance assistance, and other HR services to more than 173,000 small and mid-size businesses employing 4 million people. Our members account for more than 90 percent of the industry’s $254 billion in revenue. An additional 250 companies that provide services to PEOs are associate members of NAPEO. For more information, please visit www.napeo.org.

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SOURCE National Association of Professional Employer Organizations (NAPEO)