Why use a PEO Broker?
First, if you're scratching your head at the word "PEO" (Professional Employer Organization), head over here first. This article is a must-read too, but it'll be more helpful once you've learned about how a PEO can help boost your business's profitability while saving you weeks of time each year.
Are you in a PEO now? Were you once in a PEO? Read the above article or already know about PEOs? Then you know the advantages that they can bring. But here's why you should never go PEO-hunting without a broker again.
What is PEO Broker?
Think of a PEO broker as a way to boost the existing advantages of a PEO. They do the footwork of contacting the best PEO fits for you, soliciting proposals, and digesting the often complex proposals that PEOs return to them. Drawing on their industry knowledge and network, a PEO broker can help you negotiate better health insurance packages, lower administration fees, payroll, HR functions, employee benefits, better workers' comp rates, and more.
PEOs help you save time and money — PEO brokers help you save time and money when you're still looking for a PEO partner.
What does a PEO Broker do?
A PEO Broker compares your current set-up to their network of PEO providers. Ideally, they'll then provide a proposal that outlines your current costs to the best proposals they received from their network. They'll work with you and the PEO of your choice to negotiate fees and to obtain the best deal.
How does the PEO Broker get paid?
Nothing in life's free, but a good PEO broker will always be a net-profitable partner. They're paid by either the PEO you end up partnering with or they'll take a percentage of your first-year savings should they help you negotiate with an existing PEO partner.
How do I know if my PEO Broker is good?
There are no secrets here: the same rules of thumb apply to PEO brokers as they would to any profession. Good brokers:
Have an established client base (and can provide case studies)
Have knowledgeability about the PEO industry — and can explain the ins and outs in a way that doesn't require you to be an expert
Should specialize in PEO service — shy away from insurance/PEO/stock broker combinations. "We do everything" doesn't work in restaurants, it won't work in insurance
Heads-up: be cautious of a "lead service" versus a PEO broker. A broker sells PEO plans — a lead service sells you. Companies like Buyer's Zone will sell your info to PEOs who contact you as another one-off customer, and that’s not worth your time.
Do I pay more if I use a broker?
No. You will pay less.
PEOs know and work with PEO brokers as trusted providers of long-term clients. They know that they're competing with each other for you and will offer their best pricing right off the bat. Additionally, a seasoned PEO expert (like Dinsmore/Steele) knows what you should be paying and uses that knowledge to negotiate.
If I don’t use a broker, what are my options?
You can certainly contact each PEO directly.
Unfortunately, they all have slightly different forms that will begin to feel the same after the fifth hour of filling them out. You'll need to meet with them individually, then decipher their code-like proposals. At the end of the day, the price, premiums, and plan you receive won't be their A-game because they know you won't understand the ins and outs as they do.
The alternative? Answer a few questions, and start getting PEO quotes.
