Competing with a PEO (Tri-Net)?

[YouGotMyMoney]

Granted I don't market small group, but when I run into people on a PEO here in FL, the carrier is either dropping the coverage, or the rates are through the roof.

 

[Guest]

I spent 11 years in the PEO business and sold over $21MM annually in payroll along with managing a team of salespeople. The industry is in decline as it is harder and harder to justify the high cost of the service to the client epecially when there are unbundled alternatives out there that can do a great job for a lot less.

Moving a client from Tri-net (one of the better PEO's) to another PEO is not the answer. Especially if the second PEO charges less...that just means they live on slimmer margins and have either a reduced level of service or higher risk of failing financially or BOTH!

My PEO played by the book but still had challenges...several of which could have put us out of business immediately and our clients never knew this was happening. The client has less control over a critical part of their business...employee administration (PEO's tell you differently) and can in some cases be left holding the bag if the PEO goes south without warning. I got out because it was hard to sleep at night...now I am anti-PEO!

I am writing a manual for the insurance agents on how to take a client out of a PEO. It is a complex task and requires knowledge of taxes, payroll, workers comp., COBRA, FSA, benefit administration and human resources but it can be done. I will let you know when it is finished.

 

[ABC]

exPEO

Thanks for posting. It sounds like you have a lot of knowledge on the PEO model. My ears are open.

If you have time could you post in the Employee benefits forum "how to sell against the PEO"?

I could use some additional pointers outside the Admin fee, Weak network , & low customer service.

Thanks

I spent 11 years in the PEO business and sold over $21MM annually in payroll along with managing a team of salespeople. The industry is in decline as it is harder and harder to justify the high cost of the service to the client epecially when there are unbundled alternatives out there that can do a great job for a lot less.

Moving a client from Tri-net (one of the better PEO's) to another PEO is not the answer. Especially if the second PEO charges less...that just means they live on slimmer margins and have either a reduced level of service or higher risk of failing financially or BOTH!

My PEO played by the book but still had challenges...several of which could have put us out of business immediately and our clients never knew this was happening. The client has less control over a critical part of their business...employee administration (PEO's tell you differently) and can in some cases be left holding the bag if the PEO goes south without warning. I got out because it was hard to sleep at night...now I am anti-PEO!

I am writing a manual for the insurance agents on how to take a client out of a PEO. It is a complex task and requires knowledge of taxes, payroll, workers comp., COBRA, FSA, benefit administration and human resources but it can be done. I will let you know when it is finished.

 

[newera]

I am actually getting ready to bid on a group that is on PEO that has about 11 employees.
I had a conversation with the owner and he flat out said the cost of the HR services did not make sense with just 11 employees.
I am wondering if this will become a trend with the HR outfits.
If you have a company under 20 employees does it make sense to use a PEO?

Twenty employees is the perfect size for a PEO. Each situation is different for every company I meet with. Most of the time it is a cost play and health insurance, lower state unemployment tax rates and lower workers comp premiums usually washes my fees and puts a good amount of value and money to the client.