Peos: Do They Have You Coming, Or Going?

PEOS: DO THEY HAVE YOU COMING, OR GOING?

by Eric Moberg

Today’s competitive and hardening markets are generating significant interest in Personnel Employment Organizations (PEOs). Will offering PEOs help you compete — or attract more competition? If you feel that a PEO solution is wrong for your clients and prospects, how do you move them to a 'traditional' program? What tools will you need?

A number of my agent clients have hired a PEO producer/specialist during the past few years — some with success, others with poor results. Why such a wide range? I believe the answer lies in the degree of commitment. As with Employee Benefits/Life & Health business, many P/C agencies have never made a true commitment to selling these products. In many agencies, the transition has taken years, or has failed to generate significant revenue compared with P/C.

To make your mark in the PEO market, bear in mind that a PEO won’t be the answer for clients who prefer to remain totally independent in managing their employees. This attitude might be familiar. Independent agents have always fought hard to remain independent and to manage their own affairs with as little outside influence as possible. Develop a strong relationship with the PEO provider(s) of choice. Decide which sales area in your agency (P/C or Employee Benefits) will become the 'experts' and commit to a plan.

Next, identify clients and prospects that fit the profile of PEO prospects (your PEO marketing reps can assist in this area). Because clients and prospects might be unfamiliar with these programs, begin the sales process early. Allow time to explain and demonstrate the benefits that PEOs offer, and to complete the paperwork associated with the change.

Although taking a client out of a PEO presents its own requirements, the process isn’t that different from selling a program. The needs of the client remain the same: insurance, benefits, payroll, and personnel assistance. You need to be able to provide the services their PEO was offering, or at least guide them to the resources they’ll need.

I recommend working with both a local payroll organization and a personnel consulting and services organization to help the client establish and maintain the required personnel policies and procedures, most of which the PEO provided.

Whether you’re coming or going, a producer with PEO expertise can be a valuable asset.