OneDigital’s Acquisition Spree Reshapes PEO Landscape, Drives Consolidation

By Susan Powell

OneDigital, a rapidly growing HR solutions firm, continues to aggressively expand its footprint in the Professional Employer Organization (PEO) market with the acquisition of T&T Staff Management, a well-established PEO based in El Paso, Texas. This marks OneDigital’s tenth PEO acquisition in less than three years, signaling a broader trend of consolidation sweeping the industry and reshaping the competitive landscape for HR outsourcing.

This latest move, building on a pattern of strategic acquisitions, highlights OneDigital’s ambition to become a national leader in the PEO space, offering comprehensive HR, benefits, payroll, and compliance solutions to businesses of all sizes. While the financial terms of the deal were not disclosed, industry analysts suggest the acquisition strengthens OneDigital’s position in the Southwest and adds valuable regional expertise.

A Pattern of Aggressive Expansion

OneDigital’s acquisition strategy has been relentless. Starting with the acquisition of Resourcing Edge in March 2022, which marked its entry into the PEO vertical, the firm has consistently targeted regional PEOs with strong local presences. Subsequent acquisitions have expanded its reach into key markets like Chicago, the Southeast, the Northwest, and Nevada. “The pace of acquisitions is impressive,” notes one industry analyst. “They’re not just buying companies; they’re building a national network with a laser focus on service delivery.”

The company’s portfolio of acquisitions includes Cognos HR, Lyons HR, PayCheck Connection, Focus HR, and The Applied Companies (TAC), among others. With each acquisition, OneDigital adds new expertise, expands its geographic reach, and enhances its service offerings. This strategy allows the firm to offer a broader range of solutions to clients, from core HR functions to specialized services like risk management and employee benefits.

The Larger Trend of Consolidation

OneDigital’s acquisition spree is not an isolated event. The PEO industry has been undergoing a period of significant consolidation, driven by several factors, including the increasing complexity of HR regulations, the need for economies of scale, and the growing demand for technology-driven HR solutions. “We’re seeing a flight to quality,” explains a source familiar with the PEO market. “Smaller PEOs are struggling to compete with larger players that can offer a more comprehensive suite of services and invest in technology.”

According to industry reports, the PEO market is projected to reach USD 73.58 billion in 2025, growing at a compound annual growth rate (CAGR) of 11.1% from 2025 to 2033. This growth is fueled by the increasing demand for HR outsourcing, particularly from small and medium-sized businesses (SMBs) seeking to reduce costs, improve compliance, and focus on their core competencies.

The consolidation trend is expected to continue, with larger PEOs acquiring smaller players to gain market share and expand their service offerings. This will likely lead to a more concentrated industry, with a handful of dominant players controlling a significant portion of the market.

Impact on Clients and the Competitive Landscape

The consolidation of the PEO industry has both positive and negative implications for clients. On the one hand, larger PEOs can offer a more comprehensive suite of services, enhanced expertise, and greater geographic coverage. This can benefit clients by providing them with access to best-in-class HR solutions and reducing their administrative burden.

However, acquisitions can also lead to transition periods, potential fluctuations in service levels, and cultural differences that may impact client relationships. “It’s crucial for clients to carefully evaluate the integration process and ensure that their needs are being met,” advises one HR consultant. “Open communication and proactive engagement are essential.”

The competitive landscape is also being reshaped by the consolidation trend. Larger PEOs are gaining market share, while smaller players are struggling to compete. This is leading to a more concentrated industry, with fewer choices for clients.

“The smaller players will need to find ways to differentiate themselves, either through specialization, niche services, or innovative technology,” notes a source within the industry. “Those that can’t adapt will likely be acquired or forced out of the market.”

OneDigital’s Strategy and Future Outlook

OneDigital’s acquisition strategy is clearly focused on building a national PEO powerhouse. The firm is targeting regional PEOs with strong local presences and a commitment to client service. By integrating these acquisitions, OneDigital is able to expand its geographic reach, enhance its service offerings, and gain market share.

“They’re building a network of experts,” explains an industry analyst. “They’re not just buying companies; they’re building a team of professionals who can provide clients with the best possible HR solutions.”

Looking ahead, OneDigital is likely to continue its acquisition spree. The firm has the financial resources and the strategic vision to become a dominant player in the PEO market.

“They’re not stopping anytime soon,” predicts one source familiar with the company. “They’re determined to become the leading PEO provider in the country.”

The firm’s success will depend on its ability to effectively integrate its acquisitions, maintain a high level of client service, and adapt to the changing needs of the market. However, with its aggressive acquisition strategy and its commitment to innovation, OneDigital is well-positioned to thrive in the evolving PEO landscape.

As consolidation continues to reshape the industry, OneDigital's actions serve as a bellwether, signaling a future where scale, technology, and client-centricity are paramount for success.