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5 min read

What Is a PEO Broker and Is it Worth Using One?

PEO broker

A PEO broker is a professional or firm that acts as an intermediary between businesses and Professional Employer Organizations (PEOs). They help companies find and select the right PEO solution for their needs, which typically includes services like human resources, employee benefits, payroll, and workers’ compensation. A PEO broker navigates the complex market of PEO services to match businesses with a PEO that fits their specific requirements and goals.

Article roundup

  • Companies engage a PEO  broker to identify and vet the correct PEO to fulfill the HR and administrative duties of the company’s business.
  • PEO brokers can assist businesses in deciding whether they opt to go directly with carriers and payroll companies or leave these tasks to their respective PEOs.
  • The advantages of using a PEO broker may include the broker’s neutrality, access to relevant knowledge, and speed to market. 
  • The disadvantages of using a PEO broker may include the broker’s bias towards certain companies and the added costs that the PEO must pass on to the client. 

Business owners and managers increasingly turn to PEOs (Professional Employment Organizations, also known as PEO companies) to assist with their legal and administrative duties. This enables companies to focus on the core elements of their business as opposed to administrative tasks like HR, payroll, staffing, benefits packages, and insurance.
The PEO industry’s exponential growth has created a demand for those in PEO brokerage. This article answers the question: What is a PEO broker? In addition, it explains whether or not you need a PEO broker for your business.

What is a PEO broker?

A PEO broker is tasked with identifying and vetting the correct outsourcing partner to fulfill the HR Function of their client’s business. PEOs are regarded as the better option for companies with better health insurance packages (read more about PEO health insurancehere), alongside HR functions and payroll. Moreover, PEOs typically offer competitive rates and lower administration fees.

PEO brokers work closely with PEOs to ensure that clients match the suitable PEO for their company’s requirements. Furthermore, a PEO brokerage expert will assist clients by ensuring they have adequate administrative and HR services for their business needs.

PEO brokers can assist businesses in deciding whether they opt to go directly with carriers and payroll companies or leave these tasks to their respective PEOs. With around 500 PEO companies in the U.S. alone, partnering with a broker can, at the very least, save business owners and managers considerable time that would otherwise be taken researching PEOs.

What are the pros and cons of using a PEO broker?

Pros of using a PEO broker

There are advantages and disadvantages to using a PEO broker. Some of the benefits are considered below.

1. Neutrality

While those in PEO brokerage are not necessarily experts on individual companies, they are vested in identifying the right PEO for your business. Additionally, with their knowledge of which PEO suits your specific needs, you can often partner with the optimum PEO for your business.

While a PEO will attempt to sell your business its individual services, PEO brokers act as a neutral third party. They are also aware of a broader range of PEO services.

PEO brokers run a competitive analysis and consult with you regarding your budget and strategic goals. They can then identify how much money you can save using their skills, experience, and services. This considers parameters such as the number of employees experiencing better benefits and, in turn, the reduction of staff turnover.

2. Access to accurate information

With their advanced knowledge of the PEO industry, a PEO brokerage expert may be privy to information not specified on a PEO website.

Because PEO brokers represent a host of PEOs, they can narrow the field of prospective PEOs by identifying which PEOs meet your specific needs. For example, many PEOs offer employee training, safety compliance assistance, onboarding, worker’s compensation, local and global compliance,and regulatory guidance. However, it’s challenging for businesses to take advantage of these benefits if unaware.

This is where a PEO broker can help by connecting you to the most reputable PEOs that align with your company’s requirements and goals.

3. Speed to market

Finding the right PEO is often an extremely time-consuming process. With the need to evaluate many PEOs, this means dealing with multiple salespeople and multiple processes. It’s also harder to understand what’s included and how the package is structured.

This equates to a more streamlined process because PEO brokers have an extensive network of professionals at their disposal. In turn, this helps your business to assess and find the best PEO for you. The result is considerable time that is saved.

What are the cons of using a PEO broker?

With the benefits of using a PEO broker come some potential downsides. These potential disadvantages of using a PEO broker are considered below.

1. They may be biased

While we touched on the fact that the PEO brokerage industry is mainly unbiased, some brokers may be biased toward certain PEOs. This is because a certain PEO pays some brokers more than others. Moreover, they can be better incentivized by particular PEOs.

While a PEO broker is a safe option in many cases, it doesn’t always equate to your company receiving the best PEO options. Some brokers even require PEOs to pay to be on their list of prospective PEOs.

2. There may be an added cost

In most instances, the cost of hiring a PEO broker is absorbed by your chosen PEO. Unfortunately, this is then passed on to the client in the form of higher PEO costs.

While hiring a PEO broker is mainly free, the PEO broker is ultimately being compensated by the PEO. Because PEO brokers typically charge a high cost for their services, PEOs must inevitably shift the cost of transactions.

Benefits of using a PEO Broker
Benefits of using a PEO Broker

Going with a PEO broker — how to make your decision

Like any business decision, there are pros and cons to be considered before engaging the services of a PEO broker. There are many PEO companies to select from and the time it takes to research and connect with the right PEO can be prolonged. 

A PEO broker, with their expertise in the industry, can connect you to the PEO that is best suited to your needs. However, business owners must also be aware that some PEO brokers may be biased in their PEO recommendations. 


While a person does not need a formal license to become a PEO broker, having an insurance license is extremely beneficial. Most importantly, candidates must possess a concrete understanding of what employer's go through on a regular basis. This should relate to the complications that employers face when trying to manage all the HR components of their business.

A PEO broker is tasked with identifying and vetting the correct outsourcing partner to fulfill the HR Function of their client’s business. PEO brokers can help businesses to identify and understand the advantages and disadvantages of prospective PEOs. A broker will ultimately receive quotes from multiple PEOs and assist their client to select the best option for their business.

PEO Brokers provide comprehensive consulting services, guiding businesses through the PEO selection process. They analyze business requirements, evaluate PEO options, negotiate contracts, and provide ongoing support.

PEO Brokers thoroughly evaluate PEO service providers based on factors such as their industry expertise, financial stability, client satisfaction, track record, and compliance with regulatory requirements.

Yes, PEO Brokers are independent entities separate from PEO service providers. Their focus is on understanding the client's requirements and finding the best-fit PEO solution, without being tied to any specific provider.

Yes, PEO Brokers often provide ongoing support to businesses even after PEO selection. They can assist with contract management, issue resolution, and act as a liaison between the business and the PEO service provider.

The duration of the PEO Broker selection process varies depending on the complexity of the business requirements and the availability of suitable PEO options. It can range from a few weeks to a few months.

When selecting a PEO Broker, consider their expertise, industry reputation, client testimonials, responsiveness, and ability to understand your specific business needs. It is also essential to evaluate their understanding of SERP and rich result guidelines.

Article By
HRIS and Remote Tech Specialist
Charlotte speaks with authority as RemotePad’s recruitment and HR tech maestro. With a background in marketing, Charlotte has worked for major brands in the industry, including leading HR software provider, FactorialHR. Originally from Manchester, UK, with a bachelor’s degree from the Manchester Metropolitan University, Charlotte currently resides in sunny Barcelona, Spain.