The Importance of Due Diligence
The Importance of Due Diligence: A Client Success Story in Finding the Right PEO
Every decision a CEO makes directly impacts their company’s future, and choosing the right Professional Employer Organization (PEO) is no exception. A PEO manages critical aspects of business, including HR, payroll, benefits, and compliance. However, selecting the wrong partner can lead to costly mistakes, making due diligence an essential part of the process.
Recently, we worked with a client who learned this lesson the hard way. They were partnered with a PEO that lacked transparent billing, and upon closer examination, they were overpaying—particularly in health insurance premiums and administrative fees. Without realizing it, they were losing substantial amounts of money each year. By conducting a thorough analysis and comparing multiple PEOs, we were able to save them over $250,000 while ensuring they maintained the same level of benefits for their employees.
This example underscores the importance of doing your due diligence when choosing or renewing a PEO.
Transparent Billing and Uncovering Savings
One of the most common issues we encounter is a lack of billing transparency from PEOs. Fees are often bundled, making it difficult for companies to discern where their money is going—whether for health insurance premiums, workers’ compensation, or administrative costs. Without a clear understanding, businesses end up overpaying for services they could get at a lower cost elsewhere.
In this particular case, our client had no idea how much they were overspending until we performed a detailed analysis. After reviewing their current PEO’s billing practices and comparing it to other options, we were able to identify unnecessary costs and negotiate a much more favorable arrangement with a different PEO—resulting in massive savings.
Why Regular Due Diligence is Crucial
PEO costs, particularly for insurance premiums and administrative fees, tend to rise annually. Unfortunately, many businesses simply renew their contracts without questioning these increases. This can lead to unnecessary expenses that chip away at profitability.
By conducting regular due diligence, businesses can stay ahead of these rising costs. It’s important for businesses to routinely assess whether their PEO is still the best fit for their business, both in terms of services and pricing. Without proper evaluation, companies could be overpaying by tens or even hundreds of thousands of dollars.
Simplified PEO Comparison with PEO for the CEO
While the process of comparing PEOs can be time-consuming and complex, that’s where PEO for the CEO comes in. As a PEO broker, we streamline the entire process for our clients—free of charge. From meeting with PEO representatives to analyzing proposals and negotiating terms, we handle all the legwork. This allows our clients to stay focused on running their business while ensuring that they’re getting the best deal possible.
In the case of our client, the entire process resulted in significant cost savings, without sacrificing any of the benefits or services they were accustomed to. This is the value of having a PEO expert in your corner.
An Informed Choice for Long-Term Success
Choosing the right PEO is a critical decision that requires thoughtful analysis. With our industry expertise and commitment to transparency, we ensure that our clients are not just choosing any PEO—they’re selecting the best one for their business needs. Through comprehensive due diligence, we help CEOs avoid costly mistakes, optimize PEO partnerships, and unlock significant savings.