PEO Sales 101



Considering a career path in sales within the PEO industry is a smart choice for the right person.  Whether you are fresh out of school or looking to make an industry transition, PEO sales provides a lucrative career path for the professional willing to put in the work.  Work is defined not only as sales based activity but also the research and learning a sales professional does on their own time.  The old adage of working smarter not harder may ring true, but when you are starting out in this industry, be prepared to work smarter and harder.  The bottom-line when being a newbie in this industry is that you likely don’t know what you don’t know.




The PEO model is a hybrid of outsourcing and consulting models coupled with insurance.  While PEO models may vary from PEO to PEO, there are consistencies within the model that transcend almost all PEOs.  These consistencies are what we will cover first and then we’ll break out into options and nuances that PEOs may utilize based on their target clientele and as differentiators.




The PEO model is possible through co-employment.  The National Association of Professional Employer Organizations (NAPEO) defines co-employment as the contractual allocation and sharing of employer responsibilities between a PEO and its client. In a co-employment agreement, workers are technically employed by two separate entities: the business owner, or client employer, who controls their daily duties and core job functions; and the PEO, or co-employer, who handles personnel-related functions. Co-employers do not supply a workforce; they supply services and benefits to a client employer and its existing workforce. The client employer maintains control of all business decisions and operations while the co-employer manages employee-related aspects of business operation.


Essentially, since the PEO runs the client payroll on their Federal Employer Identification Number (FEIN), the PEO is responsible for payroll, payroll taxes and workers’ compensation insurance.  The PEO may also provide health insurance, employment practices & liability insurance (EPLI) and supplementary insurances.  The client or work-site employer handles all functionality of their business and retains the liability of managing the workforce.  While the PEO can help clients reduce workplace liability through training, policies and procedures, the client still retains the liability.  The PEO has liability as well for their role in the relationship which is generally defined through the client service agreement or contract.


Basic PEO Model


PEOs, depending on their market and industry focus, will have varying models but almost all PEOs share some basic consistencies.  Under the PEO model, the PEO will have the ability to provide:


  • Payroll processing
  • Employer payroll tax filing (FICA, Medicare, FUTA, SUTA)
  • Technology suite, i.e. payroll system, HRIS, CRM
  • Human resource consulting and resources
  • Safety and risk management consulting and resources
  • Workers’ compensation insurance
  • Health benefits insurance
  • EPLI
  • Claims management


There is much more that a PEO can offer but if you are starting out in the industry, the above areas of focus are essential for you to master in order to be successful.   We will cover more detailed information on the full PEO offering later in this article.


Generally speaking, workers’ compensation and health benefits are among the higher cost factors on a company’s P&L (profit and loss statement) behind payroll expenses.  Since a PEO touches all three of these areas, the decision making surrounding closing a deal is important to the business owner.  The more knowledge you have in the above bullet point areas, the more comfortable a business owner will be in entrusting these areas of their business to your PEO.


When you start out in the PEO industry, it will take time to gain substantial knowledge in the areas a PEO covers.  Therefore, it is advised as you journey through your learning curve, that you have a senior sales professional assist you with your meetings initially.  This will allow you to begin opening doors with prospective clientele early without damaging the brand of the PEO through possessing limited knowledge of the PEO’s capabilities.  Remember, the more you study and learn, the shorter your learning curve becomes.  Ultimately, the timeliness of you obtaining the necessary information to be successful will depend on you.


Pathway to Learning


While there are many resources to begin your learning journey, such as this blog (wink, wink), your best initial resource will be your coworkers.  Now let me be clear, your coworkers don’t have unlimited time to hold your hand through the learning process.  They have duties of their own to perform.  However, if you request meetings with members of each department and come prepared with questions, you can gobble up their knowledge and shorten your learning curve.  Be sure to take notes as you speak with them so that you may refer back to their answers at a later date for reference.


When we’ve trained new PEO sales reps in the past, we’ve always recommended that they spend time with the service teams that will support their future clientele.  We do this for two main reasons.


  1. The first reason is that it is important to know the capabilities of what your service team can and cannot do. This will help you set appropriate expectations to your prospects and thus facilitate a smooth transition from sales to service with future clientele.
  2. The second reason is that your service teams know what your company delivers. In a business services industry such as the PEO industry, what your team delivers is what you sell.  Therefore it is advisable to truly understand your PEO’s value proposition through the eyes of those delivering it.  My recommendation is that you ask each department the top 5 service requests they receive from their clientele.  I would also ask what are the top 5 most important areas they require from their clientele.  Generally you will see some overlap between the two but often you may have some outliers here.  It is important to understand the rationale behind the outliers.  This understanding will better position you to sell for your particular PEO.


Ride Along Time


Once you have spent time with your service team members, request time with seasoned successful sales reps.  Ask if you can be a shadow while they conduct sales and referral partner meetings.  While in these meetings, be sure to respect the sr. sales professional by not chiming in unless requested to do so.  I have conducted ride along appointments with new sales reps whom felt that they needed to say something because they were in the meeting, they didn’t.   This is an opportunity for you to learn, not to present.  Not only will you get insight into the ebb and flow of the meeting structure, but you will gain valuable windshield time between appointments to ask a plethora of questions from the sr. sales rep.  If you have the opportunity, request a ride along day from multiple sr. sales professionals to gain a wider perspective.


Insurance Knowledge


A large component of the PEO cost structure is in insurance.  Be it workers’ compensation, health benefits or both, you will need to have a solid foundation of knowledge in this area.  There are many publications that you can read to increase your understanding of insurance.  If you are new to insurance, I recommend you start with an insurance glossary.  Simply put, acronyms are rampant in insurance.  You can use a search engine to look up “insurance terms” and/or “insurance definitions” and you will find an abundance of resources.  This information will help you to understand that when an insurance broker refers to “GL” they are talking about general liability coverage.  If an accountant refers to “GL” in prospect discussion, they are referring to the company’s general ledger.  It takes time to learn all of this but if you do the due diligence in your learning, the time-frame will be shortened.


If your company utilizes insurance brokers as a referral channel, talk to them.  Find out what markets (insurance companies) are competitive and what trends they are seeing.   When I personally started out in the PEO industry I was always asking my brokers the trends that they were seeing in the marketplace.  This is free information to gain insight into market conditions and competitive analysis.  By the middle of my career in PEO sales I was teaching many of my brokerages about market trending and claims trending.  If you put in the work, once you become a source of information for your referral partners, you will find yourself as the preferred PEO resource. This will ring true with prospective clientele as well.


Payroll Tax


Most PEOs today utilize a tiered tax structure for their pricing.  These tax charges include FICA, Medicare, FUTA and SUTA tax.  Employers pay these taxes on their own prior to joining a PEO.  Once the client has partnered with the PEO, it is the PEO that gathers the payroll taxes through their pricing markup and then remits the tax payments to the appropriate governmental authorities.


If a PEO, yours or your competition, still utilizes a bundled or annualized rate, be prepared to discuss the tax charges in order to illustrate that an overage is not being charged.  Many prospective clientele are weary of annualized or bundled rates due to overcharging by PEOs of the past.


Regulatory Compliance


Regulatory compliance for businesses are growing increasingly more complex.  PEOs are an excellent resource for SMB (Small and Medium Business) to lean on for guidance in these areas.  Regulatory compliance takes shape in all aspects of business, including workers’ compensation, health benefits, payroll taxes, human resources, safety, retirement plans, etc.   A PEO is an inexpensive way to guide a client towards compliance and liability reduction.  Know what regulatory hurdles your client must deal with to better illustrate how your PEO can assist in the reduction of time spent to remain in compliance.  Remember, there is always a price tag for noncompliance.


Business Acumen


Business acumen has been defined as:


“Business acumen is keenness and speed in understanding and deciding on a business situation.  In practice, people with business acumen are thought of as having business sense or business smarts.”


Business acumen ultimately boils down to good experience and knowledge of business inner-workings.   When a business owner makes a decision on some of their largest cost items within their P&L, they will feel more comfortable with a PEO sales professional whom they feel has good business acumen.   The best way to increase your business acumen, aside from business experience, is to read.  Read the top business books of the day.  Read periodicals on business.  Read information on industries that you may be targeting.  Remember, the more knowledge you have, the more consultative you become in your approach.




Your PEO may or may not provide marketing support.  You can be successful regardless.  The first thing to remember is that you are likely the only company branding  a prospective client may ever experience with your PEO.  Take this responsibility seriously.


If your PEO utilizes referral partners, begin marketing your prospective referral partners early on (unless otherwise instructed by your boss).  You should be able to have a sr. sales professional join you at your initial appointments and therefore you can get the marketing ball rolling early.  This will allow you to close business while you are still learning and help expedite your journey through the validation curve (justifying the money the PEO is spending on you).  With referral partners, request a lunch and learn appointment.  If your primary referral channel is insurance brokers, which it generally is, request that the Producers (sales people) and Account Managers (service staff) of the brokerage be present.  Often, PEO sales professionals make the mistake of only wanting to meet with the Producer staff.  Remember, the Account Managers control the submission process.  Make sure they are involved and your submission volume will increase.


If your PEO uses solely a direct sales approach, you will be requesting a meeting directly from your prospective clientele.  You may also tap into trade associations, networking events and other forms of connectivity.  If you are cold calling for clients, don’t take rejection personally.  They haven’t met you yet and therefore don’t know the value that you bring to the table.  Remember, in baseball, the best hitters in the league get out 7 out of 10 times.   Keep your approach short and to the point, it will help when opening doors.


Email is a passive way to consistently market thousands of prospects on a semi-frequent basis.  You can use this medium to provide market updates, introduce new features at your PEO and provide valuable information to prospective clientele.  I recommend that you always obtain your prospects’ email addresses whenever possible.




Prospect meetings should have an even exchange of speaking time between you and your prospective clientele.  If you dominate the talking, you are “pitching.”  Ask your prospect questions, provide information and discuss it, don’t just present.  They will need to gain an understanding in this meeting of what your PEO can and cannot do.  However, if you ask them questions, you can curtail your discussion to review the aspects of your offering that are most valuable to your clientele.   As your business acumen and market knowledge grow, you will find that your conversations with your prospective clientele are centered on business in general and you will be able to insert aspects of the PEO offering that will benefit their business operations throughout the conversation.




Know your competition, don’t badmouth it.  Badmouthing competition is tacky and makes you look unprofessional.  Are there some poorly run PEOs in the marketplace?  Of course, there are bad companies in every industry.  However, illustrate what makes your PEO offering superior and simply inform them of competition when asked.  Only speak on what you know of competition, don’t make assumptions.  This will give you credibility with the information you provide and force you to research competition thoroughly.


PEO Model Emphasis


Earlier in the article, we covered the basic PEO offering.  Many PEOs have an emphasis or macro industry preference.  In the PEO world, it is generally broken down to white, grey or blue collar industries.  Depending on your PEO’s preference, their offering will take shape to best service their desired clientele.   We’ll review a few of the nuances below.


White Collar


White collar business are industries that do not require manual labor and normally have office settings, think banking and technology.  A PEO focused on white collar business is more inclined to have a solid health benefits platform, good HR resources and consulting and a nice technology platform.  While the PEO will also handle other aspects in their service offering, the emphasis will generally be on benefits, HR and tech.


Grey Collar


Grey collar business are industries that have some manual labor but it will be lighter in nature, think hotels, restaurants, etc.  A PEO is normally not only focused on grey collar.  Grey collar normally compliments either a white collar or blue collar focus as it is the middle ground between the two.  Therefore, your PEO offering may be curtailed to either white or blue collar while also covering grey collar business.  However, if your PEO has a lot of grey collar business, they are generally adept at handling multi-location business since many grey collar clients such as hotels and restaurants have multiple locations.


Blue Collar


Blue collar business are industries that have heavier manual labor involved, think manufacturing, logistics, construction, etc.  A PEO focused on blue collar business will likely have an emphasis on safety and risk management consulting, workers’ compensation insurance and claims management.   A blue collar centric PEO will provide the other elements of the PEO offering as well but the PEO’s profitability will generally hinge on successfully mitigating and reducing workers’ compensation claims activity.


PEO Offering Trends


PEO’s have many more ancillary offerings above and beyond the basics outlined in this article.  Some examples of this are: micro deductibles, workforce dashboard analytics, supplementary insurance offerings, niche industry specific value additions, global reach, HRIS and CRM systems, recruiting and staffing, retirement plans, legal services, etc.   You will gain this knowledge over time as you learn about the PEO industry.  For now, when starting out in the PEO industry, learn the fundamentals and then gain knowledge on the varying nuances.


Final Thoughts


A career in PEO sales is an exciting one!  It allows you to meet with thousands of business owners in your career.  You are able to review how these businesses work, tour their facilities and grow your understanding of industry verticals.  Doing PEO sales the right way will increase your business acumen dramatically due to the exposure you’ll have to so many different types of businesses and industries.


Also, PEO sales is a lucrative career choice.  With uncapped earning and the ability to make hundreds of thousands of dollars, or more, you can create a foundation for your lifestyle.  PEOs on a macro level have high client retention rates which court longer money when coupled with residual commissions.


The PEO model, in my opinion, is the future of business outsourcing and insurance.  According to IBISWorld, the PEO industry is in a growth stage.  The industry has grown on a macro level by 11% over the last 5 years and is expecting continued growth for the next 5 years.  The general consensus is that PEOs service roughly 5% to 10% of business in the United States with the actual number likely around 7%.  This means that there is still a lot of opportunity to penetrate the market.  Now is a good time to consider a career in this industry, just make sure you are willing to put in the work to be successful.


I will leave you with this final thought.  “Sales people know it well enough to sell it, business owners know it well enough to run it.”  Gravitate towards the latter and your sales will soar!

Author: Rob Comeau is the CEO of Business Resource Center, Inc. BRCI is a consulting firm to the PEO industry that specializes in M&A, leadership development, sales and market expansion.  You may visit BRCI’s website at

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