Strategic Payroll Partnership Helps Company Exit PEO And Reduces Costs.

Client was looking to exit their PEO (ADP TotalSource) as the administrative fees were high and although they did not have a full-time in-house HR Director, they felt through the right partnership, they could exit the PEO with piece of mind.

Background and Context

  • Administrative fee high and continued to rise each year. Had been in PEO relationship for over 10 years and it was time to examine exiting.
  • No flexibility with benefit plan design, especially medical plans, unable to explore alternative funding.
  • Research a new HRIS/Payroll vendor.

Solutions and Tactics​

  • Exit the PEO eliminating the fee and placing coverage for the items included in the fee, EPLI, and Workers’ Comp. Side-by-side comparison of costs and services illustrated.
  • Marketed the benefits to the open market and looked at alternative funding for savings.
  • Through our strategic payroll partnerships, BKS Partners was able to help the group secure a new payroll partner.

Value and Lessons

  • Upon exit of the PEO, the employer experienced a savings of $135,000.
  • Group went with a fully-insured option with sights on level-funding as a long-term strategy as they grow.
  • BKS Partners assisted with benefits admin set up, saving the employer hours of work.

Firms in a PEO relationship rely on BKS Partners to sit on their side of the table to examine the possibility of exiting.

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