$200,000
Overall PEO services
Unbundled
Billing
Every fee and tax disclosed
Bars are drawn against a 0–100% scale, so the length is the reduction itself rather than a comparison between engagements. Every figure here is stated in the text above.
The situation
A Pennsylvania distributor of printer, copy and office paper, packaging and shipping supplies, and warehouse and janitorial goods, employing about a hundred people. It had been with the same national PEO for more than twelve years. Over the last several of those, the relationship had deteriorated on two fronts — service delivery and medical cost — and at one point the provider gave the company incorrect advice on an employment matter.
Why they were stuck
The company’s own CFO had already attempted a PEO search, at least once, and had not been able to find a workable alternative. That is not a comment on the CFO. It is what the PEO market does to a buyer approaching it directly: bundled billing makes it very difficult to establish what you are currently paying for administration as distinct from benefits, taxes and insurance, and without that baseline every incoming proposal is being compared against a number you cannot see.
The owner eventually raised it with a referral partner who had once been the company’s benefits broker, and BRG was engaged to run a search.
What we did
We established the true current cost first, then took a structured RFP to the market and normalised every response onto the same basis so the comparison meant something. The owner’s reaction, recorded at the time, was that what interested him was the ability to shop the market at all.
The outcome
Overall savings of $200,000 on PEO services, including a significant reduction in administrative fees. Medical costs came down by over 12%, with considerably more plan options available than before. Service improved concretely rather than rhetorically: on-location support that the incumbent had not provided.
The change that will matter longest is the least dramatic. Billing is now unbundled, with full disclosure of every fee and tax. The company can see what it is paying for, which means the next renewal can be tested without hiring anyone to do it.
What this one illustrates
Twelve years is a long time to hold an arrangement nobody has re-tested, and the reason is rarely inertia. It is that testing it looked impossible from where the buyer was standing. That is a solvable problem, and solving it is most of what this engagement was.
If this resembles your situation
Ask your current provider for your administrative fee, stated separately from benefits, workers’ compensation and unemployment. If that number takes more than one exchange to obtain, you have learned something useful about the arrangement independent of whatever it turns out to be.
Published outcomes follow BRG’s confidentiality standard: industry category and outcome only. Fuller detail is shared in the live discussion. Related practice: PEO / ASO Advisory.
