When searching for a PEO, you have two options: contact providers directly or work with a PEO broker/consultant. While going direct seems simpler, most businesses benefit significantly from broker expertise, negotiating power, and time savings.
Here’s why working with a PEO broker makes sense for most businesses.
What PEO Brokers Do
PEO brokers are independent consultants who:
- Evaluate your specific business needs
- Identify PEOs that match your requirements
- Obtain competitive proposals on your behalf
- Compare options objectively
- Negotiate pricing and terms
- Guide implementation and transition
- Provide ongoing advocacy
Importantly: Reputable brokers are paid by PEOs (not you), so their services are free to businesses.
Time Savings
Going Direct:
- Research dozens of PEOs individually
- Contact each one separately
- Schedule discovery calls with 5-10 providers
- Answer the same questions repeatedly
- Review complex proposals independently
- Compare options without expertise
- Time investment: 40-60 hours
Using a Broker:
- One initial conversation about your needs
- Broker handles all research and outreach
- Receive 3-5 pre-vetted proposals
- Single comparison with expert guidance
- Broker coordinates all meetings
- Time investment: 8-12 hours
For busy business owners, this time savings alone justifies using a broker.
Better Pricing
Brokers typically save clients 15-40% on PEO costs through:
Competitive Pressure: When PEOs know they’re competing against others, they offer better rates. Going direct eliminates this pressure.
Market Knowledge: Brokers know typical pricing for your industry and size, preventing you from overpaying.
Negotiating Expertise: Experienced brokers know what’s negotiable and how to leverage proposals against each other.
Volume Relationships: Established brokers have relationships with PEOs who offer preferred pricing to their clients.
Example: A 30-employee company might receive direct quotes of $175 PEPM. The same company through a broker receives quotes of $120-$140 PEPM—a savings of $12,600-$19,800 annually.
Objective Guidance
Direct PEO Sales Reps:
- Work for one PEO only
- Compensated to sell you their specific service
- Highlight strengths, minimize weaknesses
- May not be honest about fit issues
- Incentivized to close deals, not find best fit
PEO Brokers:
- Work for you (even though paid by PEOs)
- Compensated the same regardless of which PEO you choose
- Provide honest assessment of pros and cons
- Will tell you if a PEO isn’t right for you
- Incentivized by long-term client satisfaction
Brokers have no reason to push you toward an unsuitable PEO—their reputation depends on good matches.
Market Expertise
Brokers Know:
- Which PEOs serve your industry well
- Which excel at your company size
- Geographic coverage strengths and weaknesses
- Technology platform capabilities
- Common service issues with each provider
- Typical pricing ranges
- Recent changes in the PEO market
This knowledge takes years to accumulate. You get instant access through a broker.
Proposal Comparison Made Simple
Direct proposals are intentionally complex:
- Different pricing structures (PEPM vs % of payroll)
- Various service inclusions and exclusions
- Confusing benefits breakdowns
- Hidden fees and charges
- Technical jargon
Brokers:
- Translate proposals into comparable formats
- Identify hidden costs
- Highlight meaningful differences
- Create side-by-side comparisons
- Explain trade-offs clearly
Without expertise, comparing proposals accurately is nearly impossible.
Negotiation Leverage
Going Direct:
- You: “Can you do better on pricing?”
- PEO: “This is our best rate.”
- You: No leverage to push further
Through a Broker:
- Broker: “I have three competitive proposals. You’re $30 PEPM higher than Competitor X.”
- PEO: Provides improved pricing to win the business
- You: Save thousands annually
Brokers negotiate professionally using competitive pressure and market knowledge.
Avoiding Common Mistakes
Brokers help you avoid:
- Choosing based on price alone (cheapest often isn’t best)
- Missing red flags in contracts
- Overlooking important service gaps
- Selecting PEOs that don’t match your needs
- Accepting unfavorable terms
- Overpaying for services
These mistakes cost far more than any broker fee would (if they charged, which they don’t).
Implementation Support
Good brokers don’t disappear after you sign:
- Guide implementation process
- Troubleshoot issues during transition
- Advocate with PEO if problems arise
- Ensure smooth onboarding
- Remain available for ongoing questions
Ongoing Advocacy:
- Help resolve service issues
- Assist with contract renewals
- Negotiate rate increases
- Facilitate provider changes if needed
When Going Direct Makes Sense
Consider contacting PEOs directly if:
- You already know exactly which PEO you want (perhaps from direct experience)
- Your needs are extremely unique and require custom proposals
- You have deep PEO industry expertise yourself
- You enjoy the research and comparison process
- You have 40-60 hours to invest
For most businesses: None of these apply.
How Brokers Get Paid
PEO broker compensation:
- PEOs pay brokers commissions (typically 3-8% of first-year revenue)
- These commissions are built into PEO pricing models already
- You don’t pay extra for broker services
- The PEO would make this margin themselves if you went direct
Important: Reputable brokers receive similar compensation regardless of which PEO you choose, maintaining objectivity.
Potential Concerns About Brokers
“Won’t the PEO charge more to cover broker commission?” No. PEO pricing accounts for customer acquisition costs whether through brokers, direct sales, or marketing. Brokers often negotiate lower rates than direct channels due to competitive pressure.
“Will the broker push me to the highest-paying PEO?” Ethical brokers receive similar compensation across providers and prioritize long-term reputation over single transactions. However, verify brokers disclose any compensation differences.
“Can I trust broker recommendations?” Check broker credentials, ask for references, and verify they’re independent (not owned by a PEO). Established brokers with strong reputations prioritize client satisfaction.
“Won’t I get worse service through a broker?” No. PEOs value broker relationships and often provide excellent service to broker clients. If service issues arise, brokers advocate on your behalf.
What to Look for in a PEO Broker
Good brokers:
- Have extensive PEO industry experience
- Work with multiple PEOs (not just 1-2)
- Ask detailed questions about your business
- Provide honest assessments (including “you might not need a PEO”)
- Offer references from similar clients
- Explain their compensation openly
- Commit to ongoing support
Red flags:
- Pushy or aggressive sales tactics
- Limited PEO options offered
- Won’t disclose compensation
- Can’t provide client references
- Promise unrealistic savings
- Unwilling to explain process clearly
The Bottom Line
For most businesses, working with a reputable PEO broker provides:
- Significant time savings (30-50 hours)
- Better pricing (15-40% savings)
- Objective guidance
- Expert comparison and negotiation
- Implementation support
- Ongoing advocacy
All at zero cost to you.
The alternative—contacting PEOs directly—requires extensive time investment, lacks negotiating leverage, and often results in overpaying for services that may not be the best fit.
Ready to explore PEO options with expert guidance? Contact PEO Consulting Partners for a free consultation. We’ll identify the best PEO matches for your specific needs, negotiate optimal pricing, and guide you through the entire process—at no cost to you.