By now, it’s been documented numerous times from a wide-range of publications just how much value professional employer organizations provide to their small business clients.
With HR growing in complexity seemingly every year, PEOs are becoming a go-to solution for small employers struggling to cope with rising healthcare costs, new employee benefit trends, changing HR regulatory and compliance laws, and much more.
However, the right PEO partnership doesn’t just benefit small business owners. This solution also provides tremendous value to insurance and benefits brokers who choose to work with and add PEOs to their list of services. This is even more true when working with a PEO that only works and partners with brokers.
But how does a partnership with a PEO help benefits and insurance brokers?
1) A PEO HELPS BROKERS BE MORE COMPETITIVE AND WIN NEW BUSINESS
With the rise of HR outsourcing and PEOs, small business owners have more options available to them than ever before. Not to mention that large brokerages routinely update their packages and offerings to stand out in the market and keep up with the latest trends.
As clients look to lower health insurance costs, this can lead to even loyal clients choosing to seek cheaper, more encompassing alternatives. Adding a PEO to your list of solutions can help any benefit or insurance broker keep up with, or even exceed, the competition.
But brokers also should also be aware of PEOs that market and sell direct to prospects, bypassing brokers all-together and possibly taking existing clients away. Many times, these PEO’s already have an existing business relationship with your clients through a related entity that provides ASO or payroll services.
By partnering with a PEO that works exclusively with brokers, such as Extensis, you can better compete against other PEOs who are targeting your clients.
Working with a PEO partner enables a broker to provide both prospects and clients with an all-in-one personalized HR resource that enables them to have the same quantity and quality of benefits as much larger employers.
Perks such as 401(k)s, voluntary benefits, complimentary benefits, access to HR and compliance experts, and not to mention traditional HR services can all be delivered to a small business client through a PEO partnership.
2) OFFERING PEO SOLUTIONS TO SMALL BUSINESS CLIENTS HELPS BROKERS DIFFERENTIATE THEMSELVES
Not all benefit and insurance brokers offer PEO as an option. This could be for a variety of reasons, but presents a big opportunity for brokers to differentiate themselves and stand out in an extremely competitive market.
We’ve already touched on just how big a challenge employee benefits and healthcare can be for small employers, so being able to tell a client you can provide them with low-cost, high-quality health insurance can help protect your book (more on that shortly) and bring on new clients.
Competitive advantages are critical in any business or market, and for a broker, having the option to recommend a PEO solution to a small business can mean the difference between gaining or losing a potential new customer.
3) PEO HELPS BROKERS PROTECT THEIR BOOK OF BUSINESS
One of the most important and valuable things for a broker is their book of business. While adding new clients is a key goal, often it’s protecting the book of business that is the number one priority. And with greater competition than ever before, it’s becoming more and more challenging.
Not only do brokers have to worry about losing a client to another competitive brokerage, but national and regional PEOs who sell directly to a client could mean a loss for a broker’s book of business.
However, partnering with a PEO that works only through brokers means that you can worry less about losing business to a larger, direct selling PEO, as well as other brokerages that may have more resources to offer a client.
BROKERS WHO PARTNER WITH A PEO SET THEMSELVES UP FOR SHORT-TERM AND LONG-TERM SUCCESS
The main reasons why the PEO industry has undergone continuous growth are because of the benefits and value a PEO brings to their small business clients AND broker partners.
While some PEOs sell directly to small employers, eliminating the need for brokers, others (like Extensis) have taken a different route. Instead, choosing to partner exclusively with brokers to provide their solutions to clients.
Benefits and insurance brokers looking to win new business, be more competitive, differentiate themselves, and ultimately protect their book of business stand to gain significantly from considering PEO as a new business solution.
This is especially true for brokers who want to offer local service and expertise, something that larger, national organizations cannot provide. As we move through 2018, brokers who partner with a PEO can set themselves up for short-term and long-term success.
Want to learn more about PEOs? Check out our eBook, How Well Do You Know PEO? This eBook provides an overview of the PEO industry as well as helpful information for brokers and employers!