Benefit and insurance brokers must be able to provide tailored service offerings to their clients, attract new clients, and build sustainable partnerships with all the companies that they serve.
An excellent way to achieve this without breaking the bank is by partnering with Professional Employer Organizations (PEOs).
PEOs have emerged as valuable partners for benefits and insurance brokers, offering a range of services that can significantly enhance their value proposition. If you are a benefits broker and are considering the benefits you stand to gain by partnering with a PEO or are not sure how to go about it, this post explains the important things you need to know.
Why Is It Important to Partner With a PEO?
According to findings published by the National Association of Professional Employer Organizations (NAPEO), companies that partner with a PEO are 50% less likely to go out of business and grow 7-9% faster than other small and medium-sized businesses (SMBs). These SMBs also experience 20% lower employee turnover than the national average while enjoying a broad array of HR services at a lower cost.
Because PEOs partner with many benefits providers and insurance companies, they have a larger capacity to cater to the HR and benefits needs of small businesses. There are 523 registered PEOs in the US alone, and most of them offer access to enhanced benefits plans, such as 401(K) plans, which small businesses cannot provide for their employees.
PEOs in the United States provide services to 173,000 small and mid-sized businesses, employing a total of 4 million people. Partnering with a PEO is also a cost-saving strategy for employers who need quality HR services for less money. NAPEO’s “The PEO Industry Footprint: 2023” report shows that the ROI of using a PEO (in cost savings alone) is 27.3%.
Our Ultimate Guide to PEO provides an in-depth guide to using a PEO and what companies and brokers alike should look out for when choosing one.
Now, here are a few ways PEOs can help you grow your book of business!
A PEO Helps Brokers Win New Business
As the complexity of doing business continues to rise, so does the need and desire to outsource HR to professionals who can manage it more effectively. Today, 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 companies seek to lower insurance costs, this can also lead to otherwise loyal clients choosing to evaluate their alternatives. Simply adding a PEO to your list of solutions can help any benefit or insurance broker keep up with and/or exceed the competition's attempts.
Brokers should also be aware of PEOs that typically market and sell directly to prospects, therefore bypassing brokers altogether and often taking existing clients away. In many cases, these PEOs will already have an existing business relationship with your clients through other related entities or functions that provide services to your clients, such as banking, accounting, and payroll services.
When you partner with a reliable PEO that works exclusively with brokers, such as The Mission, you can better compete against other PEOs who are always targeting your clients.
When you work with a PEO partner, they will typically equip a broker with the ability to provide both prospects and clients with an all-in-one customized HR solution that enables them to have the same quality of technology, human resources, benefits, and risk management as most Fortune 500 companies.
These benefits would include access to 401(k)s, voluntary contributions, complimentary benefits, access to HR and compliance experts, and traditional HR services.
Brokers That Partner with PEOs Often Stand Out
Many benefits and insurance brokers still do not offer PEO as an option. However, partnering with a PEO presents a huge opportunity for brokers to distinguish themselves from the rest and stand out in an extremely competitive market.
Earlier, we touched on just how big of a challenge benefits management and healthcare can be for small and mid-sized employers. So, being able to tell a prospect that you can provide them with competitively priced, high-quality benefit solutions can help you win new clients.
Competitive advantages are critical in any business or market, and for a broker, having the option to recommend a PEO solution to prospects can mean the difference between gaining or losing a potential new customer.
PEOs Help Brokers Protect Their Book Of Business
One of the most valuable assets a broker has is their current clients, which make up their book of business. Although the addition of new clients is critically important, the key to long-term success is client retention. However, this is an especially difficult task when you consider that the competition is greater than it has ever been before. Now couple that with trying to manage client expectations, and you quickly see why this is no easy task.
So, you might find your company competing with national and regional PEOs that sell directly to clients. But, when you partner with a PEO that only works through brokers, you can worry less about losing that business to providers attempting to sell these services directly to your clients.
Brokers Who Partner With A PEO Achieve More Consistent Short-Term and Long-Term Success
One of the primary reasons why the HR outsourcing industry, and specifically the PEO industry, has grown so much is that businesses can offload all of their HR headaches and save money at the same time.
Business executives and owners admit that the worst part of running a business is having to deal with government compliance, the rising cost of insurance premiums, as well as employee related issues. A PEO can mitigate those risks for brokers and client companies, as they have dedicated teams to handle compliance issues across all the industries and niches they function in.
While some PEOs sell directly to small employers, eliminating the need for brokers, others (like Mission) have taken a different approach. Instead, we partner exclusively with brokers to provide our solutions to their clients.
If you are a benefits or insurance broker who is looking to win new business, be more competitive, make your business stand out among the competition, and ultimately increase your client retention rate, then you stand to gain significantly from partnering with a PEO.
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 2024, brokers who partner with a PEO can set themselves up for short-term and long-term success.
For a first-class HR experience that will help you find the best solution for your needs, let's schedule some time to talk today.
About The Mission
The Mission is a leading partner in the PEO, HR, payroll, and benefits outsourcing marketplace. We provide a valuable service for small and medium-sized organizations and government contractors, serving as a trusted partner in integrated human resource (HR) compliance, risk management, employee benefits, employment practices liability insurance (EPLI), and payroll processing.