Moody’s Report Says Broker Revenue Growth Increased in 2023: How a PEO Can Boost Profits Even More
Quick look: Good news for brokers as Moody’s recently reported an uptick in their organic growth to close out 2022. Though analytics show a positive trend continuing in 2023, no one is exempt from challenges facing the market today. With an up-and-down economy and significant changes affecting the workforce, brokers can further protect their clientele by partnering with a PEO.
A new Moody’s Investor Service report shows brokers experienced an average organic growth rate of 7.2% in the last quarter of 2022. Despite the current economic downturn, the revenue growth can be attributed to a strong workforce and higher company payrolls. Additionally, brokers have been able to partially offset high expenses due to inflation and travel expenses with remote or hybrid work arrangements and real estate consolidation.
However, one of the key contributors to growth is broker investment in technology and analytics. The use of digitization and machine learning allows brokers to pinpoint specific employee benefits needs, assess risk management, and uncover opportunities for clients and prospects more quickly and effectively.
Though, despite the jump in numbers, the report also indicates the industry outlook has been changed from “positive” to “stable,” meaning brokers should still be proactive in their services and efforts. With expected GDP growth projected to slow to 2% in 2023 and 2.4% in 2024 from 2.7% in 2022, there’s expectation of lower organic growth.
It’s been predicted to eventually slow down toward the end of the year. And, by the end of Q4, numbers are expected to be “in the mid-single digits or higher. Overall, the outlook for brokers remains positive, but it’s beneficial to stay ahead of the curve. Therefore, brokers are seeking out professional employer organization (PEO) partnerships which can deliver the resources and support they need to keep their outlook sunny and their portfolio in a good place.
How PEOs help brokers boost their bottom lines
Brokers and PEOs have the same goal in mind: support client growth for small- and medium-sized businesses (SMBs) by providing comprehensive HR solutions. Rather than tackling this separately, PEOs offer a full scope of services, which allows brokers to expand their offerings, resources, and expertise. Furthermore, PEOs have access to Fortune 500-level, cost-effective benefits, and are equipped with built-in efficiencies to stay agile and adapt to employee demand.
Keeping track of various job trends requires a full-time effort which many SMBs cannot maintain and grow their companies at the same time. Since PEOs are immersed in the evolution of the job market, they’re better able to attract and retain quality talent. Meanwhile, maintaining compliance is a complex undertaking as government regulations are also continuously changing and vary state by state.
PEOs minimize the risk of violations, fines, taxes, and potential lawsuits for SMBs. As a PEO broker, providing clients a broad scope of HR expertise and resources allows them to increase efficiency and focus on core areas of growth. However, not all PEOs offer equal value.
Due to the volume big-box PEOs handle, they often rely on a catch-all solution when offering services versus tailoring them to a company’s individual needs. This isn’t sustainable for growth since what may have worked a year ago may be radically different than what’s effective today. For companies to expand, it requires a person-to-person approach and resources to support it.
The ExtensisHR difference
At ExtensisHR, PEO brokers are assured their clients are receiving personalized attention and solutions to champion ongoing success. And, by helping SMBs advance, it ultimately helps brokers retain and attract a larger portfolio. To maintain steady growth, it’s important to look past the status quo. The added value of partnering with a broker-centric PEO like ExtensisHR gives brokers:
A professional advantage
There’s strength in numbers, and as a people-first organization, ExtensisHR focuses on collaboration. Every broker client is assigned a dedicated team of HR professionals whose knowledge and experience produce customized solutions. By aligning with each SMB’s unique needs, it ensures goals are met and relationships are secured.
Premium employee benefits
For SMBs, staying competitive with larger companies is one of the greatest challenges. As a PEO broker, clients have access to premium benefits at low group rates. And there’s special attention on aligning with what employees value most rather than blindly following every trend. This keeps companies current with industry demands without compromising budget.
Quick RFIs
Generating quotes is handled quickly and efficiently in three easy steps: identifying the opportunity, evaluating the client’s needs, and delivering a tailored proposal. By streamlining the process, brokers can advance their sales cycle and secure new clients.
Competitive commissions
With a residual-based compensation structure, brokers receive lifetime payouts and competitive commissions. Additionally, books of businesses are protected through the duration of working with ExtensisHR. There are no broker of record letters, just ongoing service and support.
Industry-leading customer support
SMBs are prioritized by a team they can rely on. Unlike big-box PEOs which typically rely on “ticket systems,” ExtensisHR offers a personalized average response time of 10 seconds. As a result, client satisfaction levels are more than double (86%) the average Net Promoter Score (NPS) percentage of 37%.
Proprietary technology
Through ExtensisHR’s mobile-first Work Anywhere™ HRIS technology, brokers’ clients can manage HR tasks from anywhere, at any time. Plus, one holistic platform allows users to streamline processes, centralize data management, and improve the employee experience. By integrating various HR functions like recruiting, onboarding, and performance management, SMBs can enhance efficiency, reduce administrative burdens, and provide a more cohesive and engaging employee journey.
Enhanced credibility
ExtensisHR is in the top 1% of PEOs maintaining ESAC Accreditation, Certification Institute (CI) for Workers’ Compensation and Risk Management, and IRS PEO Certification. This further illustrates a dedication to excellence and reputation in the industry to instill confidence in PEO brokers and their clients.
In today’s uncertain world, everyone can benefit from an extra advantage. The trusted support of ExtensisHR gives brokers a boost in optimizing their book of business. To learn more about how our commitment and HR services can support your goals, contact ExtensisHR today.
