PEO Broker: What Difference Does It Make?
The search for the right PEO can be daunting, so don’t go it alone. Here’s how a PEO broker saves companies time, frustration, and future headaches.
More than 15% of businesses in the U.S. with 10 to 99 employees choose to outsource their HR administrative tasks to a professional employer organization (PEO).¹ If you have decided to join them and are committed to contracting with a PEO, you have another challenge. You’ll need to find the best PEO provider for your needs: one that offers everything you require, at a reasonable price. A PEO broker can help you with that challenge. A broker makes selecting a PEO provider much easier for you and increases your chances of finding the right solution.
This article will discuss the benefits of using a PEO broker and the services PEO brokers provide. We’ll also offer tips for business owners and human resources professionals on selecting the right PEO broker for their company’s needs.
What is a PEO broker?
A PEO broker is an expert in the PEO industry that works with businesses to find the best PEO for their needs. PEO brokers (not to be confused with insurance brokers) vet PEO providers and help businesses evaluate and identify which would be best for them. PEO brokers can be individuals or companies.
PEO brokers provide a valuable service to employers who want to contract with PEOs. There are nearly 500 PEOs in the U.S., far too many for employers to effectively research on their own. PEO brokers use their in-depth knowledge of the PEO industry to match employers with the PEOs that will best suit them. The business owner makes the final decision, aided by the PEO broker’s guidance and knowledge.
Benefits of using a PEO broker
Using a PEO broker provides several advantages that small business employers might lack if trying to find a PEO on their own. These include:
Saving time
Researching all the PEO providers in the U.S. would take a tremendous amount of time for someone with no background in the industry. A PEO broker is exceedingly knowledgeable about the PEO industry and the individual companies that compose it. The broker can handle the search more efficiently and relieve the business owner of time-wasting activities. That’s valuable time better spent on core business objectives.
Eliminating frustration
Trying to find the right PEO is not only time-consuming for business owners without industry background; it’s also frustrating. Professional employer organizations vary in the services they provide and the fees they charge. Attempting to effectively compare different PEO services and costs with an online search will be difficult if not entirely futile.
Getting the right result
A small business owner searching solo is unlikely to land the right solution for the company’s needs. A PEO broker uses knowledge of the industry and individual PEOs to provide clients with their best HR outsourcing partner options.
Choosing the wrong PEO can be costly. If you do, you’ll need to terminate the contract you made with the PEO provider. In some cases, there will be a termination fee. Then, you will need to start your search for a PEO provider all over again. By choosing the right PEO at the outset, you can save yourself the time, hassle, and expense of having to switch providers later.
Services provided by PEO brokers
PEO brokers work for businesses to help them find the best professional employer fit. To accomplish this, a PEO broker will:
- Discuss the business’s needs with the business owner.
- Create a profile detailing the services the business requires from a PEO.
- Narrow down the options to a select pool of candidates that would be a good fit for the business, given all its identified needs.
- Present the list of candidates to the business owner and guide the employer through the selection process. Provide information on the advantages and disadvantages of the various companies so the owner can make an informed decision.
- Follow up with the owner regarding satisfaction and to troubleshoot any problems.
Choosing the right PEO broker
Just as you want to make sure you choose the right PEO provider for your needs, you also want to choose the right PEO broker. Factors to consider include:
- Reputation. What do other businesses that have worked with this broker say about the experience?
- Cost. How does the broker structure its fees, and what is the total cost? How does the cost compare to the potential value?
- Experience and expertise. How long has the broker been in business? How deep is its knowledge of the PEO industry? How established is its network within the industry?
- Track record. Does the broker have a history of making successful matches between employers and PEOs?
There are many factors to consider when choosing the best PEO for your company’s needs, budget, and culture. Your business may not have the time, resources, or knowledge to conduct an effective search for a PEO. And the process can be overwhelming. Using a PEO broker can save you time and frustration and deliver a better result than you could get on your own.
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