What is a PEO Broker?

  • What is a PEO Broker, and how can they help my business?

    What is a PEO Broker? A PEO allows you to eliminate labor and non-profitable administrative costs and task, and reduce the amount of paperwork and time dedicated to managing the administrative side of your business. There are a little more than 700 PEO service providers in the US.

    Who is a PEO Broker?

    The term PEO Broker is coined from other industries mostly because PEOs have not initially been brokered.

    As the PEO’s desire to expand their client base across more industries and States within the US grew, many PEOs found most advantageous to team up with a sales force outside their organization.

    PEOs decided they would pay a percentage of revenue to an outside salesforce rather than pay more salaries internally.  Another words, they are smartly exchanging a fixed cost for a variable cost and this cost is only realized once a client is on their books.

    Not all PEOs allow brokers to offer their services.

    There are some national PEOs such as ADP, Paychex or Insperity who only use their internal sales force.  They have spent tremendous advertisement dollars to make their name known.

    These PEOs see less value in paying outside sales professionals a client acquisition fee.

    A few other regional PEOs who do not partner with outside sales maintain their solution is so superior and specialized that they do not place high value in anyone other than their internally trained sales force.

    This landscape is changing especially now when there is much consolidation and acquisitions among PEOs.

    A PEO Broker or someone who can connect a client with a suitable PEO is a category of professional who performs this service in different capacities.

    There are three essential types of professionals who can help you to connect with a PEO provider:


    These are firms who have made it their business to understand the wide differences among the many types of PEOs as well as the specific needs of the client.

    Business Analysis

    Small and medium size businesses have general common needs and also very company specific drivers.  PEO broker companies drill in to figure out what these company specific needs are to best pair the client with the proper PEO solution.

    Broader Relationships

    PEO broker companies have established relationships with all three types of PEOs (National, Regional and Niche).  The reason for this is the desire to be in a position to have at least one option for every client who is a fit for the PEO partnership.

    PEO broker companies have more relationships in place than the other two types of PEO connectors most often finding themselves in a position to interact with the PEOs upper management and owners of the company.

    PEO broker companies have most often over a dozen different PEO relationships.

    One Set of Forms

    Some PEO Broker companies have standardized the process for the benefit of the client offering a consolidated RFP questionnaire applicable to all PEOs which maintain the relationship.

    Clients fill out only one set of forms and the PEO broker company alongside the PEOs do the rest.

    Better Rates

    Additional benefits from PEO broker companies include the ability to negotiate on the clients’ behalf.

    Due to the larger volume of business the PEOs receive from PEO Broker companies and the favorable professional business relationship, the client is often in a position to get the most competitive rates.  This is further cemented by the knowledge the PEOs have that they are competing with other PEOs for the clients’ business.

    For more information on how you can benefit from a PEO broker relationship call us at 1-866-684-5684.

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