Professional employer organizations (PEOs) are popular with small- to medium-sized businesses because they offer great value to those businesses. One of the most popular PEO services is obtaining and administering employee benefits packages. Instead of having an adversarial relationship, PEOs and insurance brokers can cultivate a relationship that is beneficial to both parties.
The first step is to call NetPEO at (678) 376-1212. We are not a PEO, but a PEO brokerage firm. We have relationships with PEOs across the country and can help set up advantageous connections. Just as we only work with the highest quality, top-rated PEOs in the U.S., we only make introductions with premier insurance brokers.
How Insurance Brokers Can Benefit from PEOs
Regardless of their industry, small- and medium-sized business owners are nearly always fighting to attract and retain top employee talent. Many of those business owners are caught in a tough spot between wanting — or needing — to offer platinum benefits packages but being unable to obtain them due to their business size and/or budget.
PEOs can provide human resources, finance, administrative, and benefits outsourcing to help businesses expand their services and better focus on their mission and growth. This opens the door to benefits and services a company wouldn’t generally be able to offer without a PEO partner.
When insurance brokers work with a PEO partner, they can gain access to these businesses that they usually wouldn’t otherwise be able to connect with. Usually, this is most beneficial when partnering with a PEO working exclusively with brokers so as to maintain a synergistic relationship.
Protecting Your Book of Business
Adding those new clients through a PEO partner is always an attractive proposition. However, for most brokers, protecting their book of business is the top goal.
Brokers work hard to sign-on their clients, so protecting them from competition such as other brokers, but PEOs selling directly to clients is a concern. This can be avoided by partnering with a PEO working exclusively with brokers.
Fortunately, there is an increasing number of PEOs wanting to collaborate with insurance brokers. Not only are brokers not losing their book of business, but they can also add clients, and even offer expanded service options, increasing client retention.
Additionally, brokers working with PEOs can place a large book of business while utilizing the PEO’s expertise not to add to their own staff numbers. Gaining more business while not having to hire additional employees or utilize additional resources is a win-win.
The majority of PEOs have very high client retention rates — more than 90%. The increase in business and predictable clientele is a very attractive prospect.
Offering Additional Services
Insurance brokerage services are typically pretty cut and dried — helping consumers and businesses find insurance policies that best fit their needs. However, when insurance brokers work with PEOs, they can also make offering clients the PEO’s services a part of the deal.
If the choice is between an insurance broker who can provide insurance options or a broker who can provide insurance options AND someone who can handle payroll, compliance, finance tasks, and more — the choice for many businesses would be clear. Go with the value-add.
PEOs As a Resource, Not Competition
When PEOs and insurance brokers support each other, instead of competing, both entities grow stronger. PEOs are popular, providing services to more than 175,000 businesses, according to recent numbers. When brokers partner with PEOs and use them as a resource to grow their own book of business and retain clients, it can be a huge competitive advantage.
Now, more than ever, PEOs are working directly with brokers instead of attempting to directly market their services directly to employers.
How PEOs Can Benefit from Insurance Brokers
PEOs rarely want to start from scratch when it comes to building networks and relationships with insurance providers. The most efficient, effective solution is to partner with a brokerage with their existing sales force and relationships.
Expanding options and adding skilled, knowledgeable professionals to their roster of reliable resources is a huge asset for PEOs and gives them the opportunity to attract new clients. This is of particular interest when it comes to seemingly ever-changing laws, rules, and regulations for the Affordable Care Act (ACA) and affiliated marketplace.
When a potential client is interested in a PEO providing insurance and benefits options, a representative from the PEO as well as the broker will partner during prospect meetings to share comprehensive information. A united front can encourage new clients to sign on.
The secret to making this work is for the PEO to be fully informed on what the insurance broker provides and for a broker to be up-to-date and up-front about what a PEO provides. This way, everyone, including the potential client, is on the same page.
A Mutually Beneficial Relationship
A PEO and insurance broker working together are a nearly unstoppable force. And the combination is more attractive to clients.
Laying out clear expectations and the groundwork for a mutually beneficial relationship in advance is the key to short-term and long-term success between a PEO and insurance brokerage partnership.
Get Your PEO Partnership Off to the Right Start
Call NetPEO at (678) 376-1212. Our nationwide network of PEO partners is an amazing resource. We learn about what your insurance brokerage has to offer and connect you with the PEO partner who can utilize your services and benefit your business.