THE EDUCATION GAP: WORKING WITH PEO CHANNEL PARTNERS AND TRUSTED ADVISORS

PEOs offer many benefits for small and mid-sized businesses, yet only about 17% of these companies use PEO services. The remaining 83% represent a significant untapped market primed for development. Though the industry has charted consistent growth over the last ten years, plenty of opportunity remains. One barrier to accelerated PEO growth is an education gap.

Channel partners and advisors such as insurance brokers, CPAs and legal advisors may lack in-depth PEO knowledge, limiting their ability to advise clients on these solutions. If channel partners learned more about PEOs, it stands to reason they would schedule their clients for PEO proposals more often. Heightened awareness and education could be the keys to penetrating the market.

Yet, without established accreditations that apply to PEO consulting, channel partners who appreciate the benefits of increasing their understanding have no centralized place to acquire the knowledge they need.

BENEFITS OF CHANNEL PARTNER EDUCATION

PEO-savvy channel partners and trusted advisors can improve conditions for many entities in the PEO ecosystem. One obvious outcome of actions taken by informed individuals is better client matching. Assessing client needs from a PEO perspective allows channel partners to recommend the most suitable PEOs for them. The leads generated by such partners will be better qualified when they are turned over to PEOs. By streamlining the selection process and proposing only relevant solutions, PEOs will close a higher percentage of deals and onboard satisfied clients likely to remain loyal for some time.

In complex situations, well-informed partners are a valuable asset for the client. With in-depth PEO training, the advisor can inspire confidence they have the skills and knowledge necessary to handle complicated tax or compliance scenarios, for example.

PEO education can also stem the spread of misconceptions inadvertently communicated to clients by channel partners who have scarce experience with PEOs. An educated partner can set realistic expectations for clients, reducing the chances of delays, friction, or cancellation during implementation.

An elevated knowledge level will be beneficial to the channel partners as well. They can offer their clients valuable insights and advice, which strengthens their status as valuable business partners.

Chantal Rainieri, the Northeast PEO Practice Leader and EVP for EH&B Consulting at Marsh McLennan Agency, would welcome a closer working relationship between PEOs and channel partners. “PEOs could enhance their proposal formats to improve clarity and transparency,” she says. “We often encounter situations where we’re unaware of additional costs for services that we initially assumed were included in the baseline administrative fee. Clearly identifying add-on services would enable us to better showcase the value of each PEO’s offerings.”

PEO SALES PROCESSES

Clients who navigate the sales process directly with PEO providers may perceive the process as time-consuming. They may need to attend multiple meetings and submit the same data multiple times on their own to compare their top PEO choices.

Broker-led processes may also involve duplicated efforts. Plus, with the broker in the middle, questions and requests for information or documentation can take a great deal of time to resolve. When advisors like insurance brokers attempt to manage the PEO evaluation and implementation process, lack of PEO knowledge can reduce them to a pass-through role.

A happy medium is a PEO advisor that limits their practice to only the PEO industry. This dedicated focus allows us to make unbiased comparisons, answer questions, and administer timesaving uniform applications.

PEO INDUSTRY PERSPECTIVES ON EDUCATION

PEOs vary in how much they embrace the idea of sharing information with channel partners. A general business trend towards transparency leads more PEOs to acknowledge the value of broker and advisor expertise. Some have established informational resources to help trusted advisors learn more about the intricacies of their PEO. They want their network of channel partners to learn all they can about how their PEO works.

Other organizations see value in having more control over client relationships. They prefer to use their channel partners as a referral source, primarily. With this approach, the PEO naturally focuses on their offering only, discouraging clients from looking elsewhere for other options.

A close-to-the-vest approach may not be the best strategy, as it limits a PEO’s ability to fully tap into the relationships between trusted advisors and their clients. Without the value-added relationship, channel partner clients may regard PEOs as a commodity, reducing the differentiating factor to the price. As Mark Perlberg once said, “If you win a client based on price, you’re going to lose the client based on price.”

One could argue that companies like mine commoditize PEOs from a pricing perspective, but part of that price comparison includes analysis of PEO plan features and benefits. We show the differences among relevant PEO platforms side-by-side, relating the value of various aspects of the plans to the client’s individual situation. As we drive business to PEOs we’re always aligned with the client’s objectives. Some clients are pursuing cost savings and others seek improvements in their administrative infrastructure.

FUTURE DEVELOPMENTS

Collaborative efforts to educate PEO channel partners may be on the horizon. We may see the industry establish standardized training or formal certifications. Such moves assure clients that the advisors they trust with their businesses are qualified to help them choose and implement a PEO.

I propose we gather a consortium of professional advisors and PEOs to discuss establishing an educational and certification program for PEO channel partners. Such a program would focus on general PEO practices and principles commonly used across all PEO programs. Certifications awarded following successful completion of the training course would confirm that an individual was qualified to assist clients in the evaluation and implementation of PEO platforms.

A collaborative venture to establish training standards in our industry is not without precedent. With structured education, professionals like legal advisors or insurance brokers can offer informed advice about which PEO plan is best for a client and explain why. They become knowledgeable experts, guiding the clients through what can be a confusing decision.

The PEO industry is poised for plenty of growth. With a large, untapped market, opportunities abound. Actively engaging CPAs, insurance brokers, human resources consultants, and legal advisors in PEO education will help these partners match their clients with the right PEOs for them. A reliable network of professionals enjoy existing relationships with the 83% of small and medium-size businesses who don’t have a PEO. This may be the time to exploit the connections of these channel partners by equipping them with a thorough education that enables them to market and sell PEOs more often.