Top 3 Factors When Choosing a PEO Broker
PEO Brokers have grown in popularity from when we first launched in 2010. Companies didn't know what a Professional Employer Organization was back then, let alone what a PEO broker was. Since then, companies have embraced PEOs and their services.
With the rising cost of insurance, including employee benefits and workers' compensation, companies have turned to PEOs to partner with to solve their businesses' challenges. Factor in the administrative tasks, the increased compliance, and PEOs have become a best friend of a company's leadership team.
The process of finding a PEO has never been easy, but with the advent of PEO brokers, it has become easier to match with the perfect PEO by using a PEO Broker. A PEO broker makes it easy to compare PEO prices, insurance coverages, payroll platforms, and HR services. However, the key is to find the right PEO broker for your business and employee needs.
Let's examine the top three factors when choosing a PEO Broker.
Have A Clear Strategy
With 700 Professional Employer Organizations operating in the US, it's a daunting job for anyone, let alone exactly which PEO will work best for your company's specific needs.
Therefore, it is important for PEO brokers to have sufficient experience and a solid track record in the business. They must be able to form and offer strategic options to the company and free them from having to do it themselves.
To do this, the broker must have the ability to define the company's exact needs as part of their competency. They must be able to come up with options by considering all relevant factors.
Things to be Considered in Strategizing
Nature of the business and its nuances like the complexity of the operation, risk level, turnover, and others.
Company structure
Challenges
Company's goals and boundaries
Location (single location regional or multi-state across the country)
Company's mission, vision, strategy, goals, and growth targets — the plan must align with these
Beliefs, values, and ethics of both the company and the PEO — best if shared by both parties for smooth cooperation
The broker must have developed a vast network of PEOs with a clear view of their expertise, competence, strengths, weaknesses, and track record in the industry. With this, they can narrow down the choices of PEOs that match the requirements and come up with a shortlist of good fits. They should be able to present this clearly in detail and with full transparency to business owners. The pros and cons of each option must be clearly stated and understood by the business owner.
PEOs can save you on
- Health Insurance
- Workers’ Comp
- Staff Overhead cost
A PEO helps to mitigate the risk for small businesses. PEOs allow you to focus on growing, rather than administrative tasks.
Save On Costs
Hiring a good PEO broker can save a business owner a huge amount of money.
PEO brokers save business owners from the time- and resource-consuming process of finding potential partners from an extensive range of PEOs in the industry.
With the right PEO partner, a company can save on personnel costs, workers' compensation, health benefits, and unemployment insurance. A good broker should know from experience and PEO profile which one among the PEOs can offer the best cost-saving package. Business owners should not spend more than necessary to get the best value for their money. That should be the target.
They can also help save the company the cost of mistakes from unfit PEO partners by lending their expertise in making a choice.
Negotiating the rates is one aspect of the process where a PEO broker can help. Their knowledge of the competitors' rates is an advantage that they can use to bargain for the company's best rate.
Proactiveness
Proactiveness and a sense of responsibility go hand in hand. Responsible and proactive PEO brokers take it upon themselves to do due diligence on their PEO partners and set standards to protect the businesses and give their owners peace of mind.
Things to Check for Due Diligence
Certifications like IRS certification
Membership in NAPEO (National Association of Professional Employer Organizations)
Third-party audited financial statements
Independently certified risk management practices
Client retention rate
5 Year Benefit Renewal Average
Clients’ referral
Complete list of all service costs
Other relevant information and certifications
After deciding to consider going into a PEO partnership and talking to a PEO Broker, it's the latter's responsibility to start the ball rolling. A proactive broker should take the lead from thereon.
Responsibilities of PEO Broker
Get all the needed information
Analyze what the company needs
Solicit proposals
Present proposals to the business owner
Come up with a shortlist
Review the contracts in detail
Assist in the negotiation
Help both parties when needed.
The role of a broker is technically complete once the contract between the two parties is signed. But a good broker takes it upon itself to see that the partnership is going smoothly even after completing the deal. With PEO brokerage being such a competitive industry, one should be able to offer more than what others do to differentiate itself. In addition, in case of issues, changes, or growth in the operation, the broker should be able to provide help to resolve or make adjustments when necessary.
To Sum It Up:
Employing a PEO or not might be an easier decision once business owners get to know the benefits from it. However, finding the right and best fit PEO for your company might be formidable. This is where PEO Brokers come in.
But what should you look for in a PEO Broker? A good broker can and should make finding a PEO that is a good fit for the company easy and hassle-free. Having a strategic and logical approach to finding the best PEO is one capability that a good broker must have. In addition, they must present the strategy clearly to the business owner.
Finding the best PEO can be a tedious and resource- and time-consuming process for the company. It offers no certainty of success. A good PEO broker should be able to offer cost-saving by allowing a significant cut in the process and coming up with a strategic and cost-saving partnership with the right PEO.
Employ a PEO Broker to free you from the hassle of going through the process yourself. A proactive, experienced, and well-connected broker is what can make it happen for you.