$123,000
Overall savings
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 diversified real estate management firm in Virginia, around fifty employees, four decades old. Three years earlier it had moved to a national PEO specifically to save money on its benefits program. Since then there had been repeated service problems — enough that a referral partner who stayed close to the executives learned about them before anyone went looking for alternatives.
What made this engagement straightforward to scope is that the executives were clear about something buyers often are not: they still liked the PEO model and wanted to keep it. The problem was the provider, not the structure. Those are different problems and they have different answers.
What we did
A remarketing of PEO services — the same competitive process as a first-time placement, run against the arrangement already in place rather than against the open market. Part of the work was a detailed cost analysis of the incumbent position, which mattered as much as the proposals did.
The outcome
Nearly $123,000 in overall savings. Medical cost down 21%. State unemployment tax down 53%. The administrative fee down 31%. The benefits program itself improved, with considerably more options for staff.
The 53% is the number worth pausing on, because it is the one buyers least expect. State unemployment is treated by most employers as a fixed cost of being an employer. Under a co-employment arrangement it is not fixed at all — it moves with the provider’s own rating, and the spread between two providers on the same payroll can be very large.
We are very pleased to have secured a much better long-term PEO solution for our Company that provides full disclosure of all costs associated with the program.
What this one illustrates
The firm’s own summary of the result was not the savings. It was that the detailed cost analysis finally let them see the full extent of what they had been paying. They had been inside the arrangement for three years and had never had that view. A change of provider delivered the money; the analysis delivered the ability to notice next time.
If this resembles your situation
Being unhappy with a provider is not the same as being wrong about the model, and the two get conflated constantly. Work out which one you have before anyone proposes an exit — leaving co-employment because of a service problem is an expensive way to solve a service problem.
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.
