Client:
Social Media & Marketing Company
Industry:
Marketing & Advertising
Challenge:
A rapidly growing social media and marketing agency, was expanding its operations into multiple states. This expansion brought increased complexity in managing employee benefits across different jurisdictions. The agency recognized the need for a more competitive and streamlined benefits package to attract and retain top talent while effectively managing costs. They engaged a trusted broker to explore potential solutions.
Solution:
The broker, recognizing the potential for significant efficiencies, introduced Prime PEO Brokers to faciliate bids from a few different PEO’s. (Professional Employer Organization). A PEO arrangement allows businesses to outsource various human resource functions, including benefits administration, payroll, HR compliance, and risk management.
Process and Impact:
Through a thorough analysis, being mindful of existing benefits structure and future growth plans, our firm identified several areas for improvement and cost savings. By leveraging the PEO’s large group purchasing power, The company gained access to more competitive rates for health insurance, retirement plans, and other employee benefits.
The transition to the PEO resulted in:
- Significant Cost Reduction: They realized over $100,000 in annual savings on their employee benefits expenses. This freed up capital that could be reinvested in the agency’s core business functions and growth initiatives.
- Streamlined Administration: The PEO assumed responsibility for complex benefits administration tasks, relieving the company’s internal HR team of significant administrative burden. This allowed them to focus on strategic HR initiatives and employee engagement.
- Enhanced Compliance: The PEO provided expertise in navigating the complex landscape of multi-state employment laws and regulations, ensuring the company remained compliant as they expanded.
- Improved Employee Benefits: The PEO offered a wider range of high-quality benefits options, potentially enhancing employee satisfaction and attracting new talent.
Broker’s Value:
The broker played a crucial role in this successful outcome by:
- Identifying the Client’s Needs: Understanding the growth trajectory and the challenges associated with multi-state benefits administration.
- Strategic Introduction: Recognizing the PEO model as a viable and highly beneficial solution for the client’s specific needs.
- Facilitating the Partnership: Connecting their client with a reputable PEO partner capable of delivering the desired results.
- Ensuring a Smooth Transition: Guiding both the client and the PEO through the implementation process.
Additional Win: Rate Cap Negotiation
Further demonstrating their commitment to long-term financial stability, the Prime successfully negotiated a rate cap of 9.5% for their upcoming November 1st renewal. This secured predictable benefits costs for the company through 2026, providing valuable budget certainty and protection against significant future rate increases.
Conclusion:
The partnership between client and the PEO, facilitated by a proactive and insightful broker, delivered substantial financial benefits and operational efficiencies for the growing marketing firm. The over $100,000 in savings, coupled with the negotiated rate cap extending through 2026, represents a significant strategic advantage for the client, allowing them to focus on their core business and continued expansion with greater financial confidence and a more attractive employee benefits package. This case highlights the significant value that brokers can bring to private equity-backed firms by identifying and implementing strategic HR solutions.