Cross-Selling PEO Services

By: Marty Gray
Date: 5/1/2007

Recruiting and staffing agents are finding additional opportunities by cross-selling PEO services. Imagine a business environment where not only are your clients looking to you for their recruiting and staffing needs, but for additional services provided by PEOs (Professional Employer Organizations). The additional services that you can provide for your clients will save them time and energy, as well as help them focus on increasing their bottom line. Clients will have access to a team of specialists who provide expertise in a number of areas, including: payroll, workers compensation, human resources, compliance, benefits, and risk management. Does this sound too good to be true? How about getting paid a lifetime residual income based on the gross payroll of each client that is placed? Finding a good PEO broker with whom to work should be your next step.

Why should you recommend a PEO to your current clients? Unfortunately, today's business environment is littered with areas in which the small- or medium-sized businesses get overwhelmed. Some, but not all, of these areas are listed below:

• Payroll Services

• Federal Deposits ( FICA,FUTA )

• Quarterly Reports ( 941 and SUTA )

• Audits

• W-2s, W-3 Transmittal, 940 Report

• Workers Compensation

• Claims Management

• OSHA Compliance

• Audits

• Unemployment Management

• Unemployment Hearings

• Claims Management

• Benefits

• Cafeteria & 401K

• Insurances Plans

• COBRA

How does a PEO Work?
A business owner needs help to manage increasingly complex employee-related matters. The business owner contracts with a PEO company to assume all of these responsibilities - which allows the client to concentrate on the income-producing side of the business. By using the business technique known as "Employee Leasing," the company hires the business owner's employees and leases them back to the business owner. This makes the PEO company the employer-of-record for tax and insurance purposes. The business owner writes one check per pay period to cover: payroll, taxes, benefits, and administration fees...The PEO company does the rest. The client's current employees fill out a simple Application Form, W-4, I-9 {Immigration Form} and any state-required forms (where applicable). The forms are transferred to the PEO, and the information is loaded into the client's account in preparation for the next payroll period. Technically, the employees become employees of the PEO at the onset of your next payroll period, and everyone is paid at their regular rate, as defined by the client.

PEOs can also cut costs associated with the management of these areas.

• Payroll: Mainly, this involves keeping track of employee work time, deducting federal and state taxes, and issuing checks.

• Human Resources Compliance: This means ensuring that all of your employee procedures comply with federal and state laws, including race or gender discrimination laws.

• Benefits Administration: This can include things such as health benefits, vacation, sick leave, and retirement.

• Risk Management: This is a vital area that has to do with insurance, primarily workers compensation insurance.

A PEO can offer the advantages of discounted workers compensation and group medical insurance rates. They can do this because they handle a variety of small businesses that they pool together, thus getting better rates for all the businesses involved. For more in-depth information, contract with a PEO broker that has experience working with recruiting and staffing agents.

Where the PEO Broker Fits
Finding a PEO is best done by finding a good PEO broker who knows and has relationships with multiple PEOs that can underwrite companies in all 50 states. The PEO broker can be a valuable asset in finding the right PEO fit for your client company's needs.

Finding a PEO broker with experience serving multiple industries is not easy, but well worth it. First, we must realize that most PEOs will not be able to underwrite every client. There are many reasons why one PEO is not a good fit for all clients. It is the job of the PEO broker to give needed guidance in order to achieve the most cost-effective solution that will satisfy all of your clients' needs. The PEO broker who knows and has relationships with multiple PEOs, and who can provide PEO services for a variety of companies in all 50 states, can be a valuable asset in finding the right PEO fit for your company. Just as a good insurance agent need not represent only a single company, PEO brokers should represent many PEOs and work to identify the one that is right for your client's particular needs.

Marty Gray is the President of Staff Brokers Inc. He can be contacted at 877.416.0668, or by email at marty@staffbroker.net, or visit www.staffbroker.net.