5 Tips to Ensure Your Company Is Not Overpaying for a PEO

PEOs provide a cost-efficient way for small businesses to have the HR resources and employee benefits usually reserved only for large corporations. But that doesn’t mean all PEOs are equal in their rates or that you won’t overpay if you are not fully aware of how to negotiate and work with PEO companies.  

Negotiate with a PEO? Yes, PEO prices are not fixed.

  So what can you do to get the best pricing? Here are 5 tips to help ensure you lock in the lowest price:

1. Shop Around: It’s important to shop around when looking for a PEO. Know what 3-5 competitive PEOs are going to charge you. Many PEOs have difficulty bringing on new clients, so when you are ready ask for some pricing concessions in exchange for your commitment.
2. Shop Financial First : PEO salespeople are trained to build value into their services and technology before they let you know the costs. To avoid emotional decisions with a specific service, technology, or person, consider their costs and your budget before going forward.
3. Comply with Underwriting Requirements: When you don’t provide certain information, the underwriter will assume the worst, which will lead to higher quotes. Use NDAs and reference-based diligence to control privacy.
4. Understand Price Locks: These can be more valuable than discounts. If a PEO can lock in their medical renewal, it’s usually more valuable than a reduction in administrative fees.
5. Utilize a Professional: Third parties, like PEO Spectrum, will not only save you time by shopping simultaneously multiple PEOs for you, but will ensure best practices are followed. In addition, our PEO experts have access to the lowest pricing and provide full support throughout your PEO relationship, including annual reviews and service-related support.

Bottom line, it’s important to educate yourself before shopping for a PEO, and by using best practices you can save substantially on your costs