This Inc. article is a nice review of costs of HRO for smaller businesses. Although I really don't focus on small business, it's difficult to provide economies of scale to them when your costs are generally based on a per employee per month type of schedule.
I'm also very interested in how Inc defined their HRO service offerings compared to traditional PEO prganizations. There would seem to be a large overlap here. If you consider PEO for small businesses, then there is quite a large market.