At Business Resource Center, we consult in a host of areas. While our emphasis and aim may vary from project to project, one thing remains consistent. This constant variable is our vantage point. Too often, companies (and people) get myopically focused and subsequently lose sight of the whole picture. When we make introductions to providers, consultants, investors, etc., we review the potential relationship as a whole. If the whole of the relationship proves symbiotic in nature, we facilitate the introduction to the mutual gain of each party.
When it comes to the PEO industry, the PEO model has many direct benefits to its clientele. This encapsulates the direct focus of the PEO. However, don’t ignore the indirect benefits that a PEO allows its clientele to achieve. The indirect benefits of the PEO model often carry significant weight to an SMB, when properly conveyed. It is the combination of the direct and indirect benefits of the PEO model that comprise the whole of the value prop.
Direct & Indirect Results via the PEO Model
In this section, we will review some direct results of the PEO offering and the subsequent indirect results. Hopefully this illustration will provide you with insight and a wider lens in which to view the PEO offering. Moreover, I encourage you to review many of your business dealings and relationships with the wider lens mentality. You may find that you have more to offer, your pricing could be higher, or identify some innovation that will give you a competitive advantage.
Examples of Direct & Indirect Results
Below are five examples of what we are discussing. We encourage you to look at every aspect of the PEO service offering to determine the direct and indirect results of a well-executed service offering.
|Offering||Direct Result||Indirect Result||Financial Result|
|1||Employee Handbook||Compliance, Communicate Employee Expectations||Improved employee communication, liability reduction, lawsuit reduction||Reduced liability expense reduction|
|2||Time & Attendance||Accounting & Payroll Accuracy||Workforce management, wage and hour liability reduction||Reduced liability expense reduction|
|3||Safety Consulting||Safer Work Environment & Employee Education||Employee awareness, accident reduction, employee safety, claims reduction||Reduced WC expenses, protect against employee and product loss|
|4||Employee Benefits||Robust plan selection procured at scale||Employee attraction & retention, employee satisfaction and morale||Cost reduction, greater predictability in cost structure, reducing inflation curve|
|5||Training/Consulting||Guidance & Advice||Liability reduction, confidence in guidance, workforce management, compliance, workforce development, etc.||Liability cost reduction, performance improvement, reduction in compliance liability, reduced internal hours spent sourcing information/solutions|
Convey & Remind
A client may not fully appreciate the indirect effect of the PEO model without being educated on this front. Meaning, during the sales process and throughout the service execution, a PEO should inquire to its clientele as to the impact the PEO has had directly and indirectly on the business. This process will allow the SMB to fully understand the impact of the true PEO value proposition.
When a client and PEO team understand the true impact a PEO has within the relationship, both directly and indirectly, the relationship between client and PEO grows. The client can begin to view the PEO as a strategic partner and include the PEO’s offering in its growth strategy.
If the PEO frees a client’s internal team up and they subsequently gain increased capacity, where can that talent be reallocated toward achieving future goals? Can the SMB operate on a tighter SG&A budget due to the external team of the PEO. Can the client reduce risk with compliance, insurance, employment litigation due to the PEO offering? Can the client leverage the PEO’s scale with 3rd party procurement to achieve higher margins? If an SMB understands the true value a PEO brings directly and indirectly, the PEO relationship becomes increasingly more appetizing.
Understanding the direct and indirect impact of a PEO allows a PEO to have a deeper and more meaningful conversation with prospective and existing clientele. It removes the PEO from siloed conversations, myopically focused on a singular impact. The truth is that the PEO model is a fabric of inner workings that harmoniously achieve positive results for its clientele, both directly and indirectly. A deeper appreciation for the model can only be achieved when a PEO widens its lens and invites the client to view the PEO model for what it truly can deliver.
Rob Comeau is the CEO of Business Resource Center, Inc., a business consulting and M&A advisory firm to the PEO industry. He is also the Founder and Featured Author of this online PEO publication.