Case Study

The Client

A large well established PEO operating nationally with over 20,000 leased employees.

The Challenge

The purchaser of the PEO did not have familiarity with the PEO industry and thus did not understand the ramifications of the Director level personnel being released over a period of time. The absence of the Director level caused a PEO knowledge gap as well as a tactical leadership gap with significant impact to the PEO’s service, risk and operational areas occurring over a two-year period.

The Solutions

PEO Company Turnaround

• The risk management, workers’ compensation and underwriting departments, procedures and practices were re-engineered
• All other departments including human resources, all benefits, field services, loss control, payroll functions, etc. were re-engineered
• The personnel were retrained, policies and procedures were re-engineered, and Director/Management level leadership was sourced and placed
• Company-wide key metrics and robust analytics were implemented in order to focus on the finite details
• Industry best practices in all areas were implemented
• A highly competitive market called for sourcing and securing new healthcare benefits and offerings in order to compete
• Market analytics were implemented to realign the PEO’s pricing model to compete within a mid-range of service versus fee area with appropriate adjustments being made to service levels (elimination of over service provision with no justifiable profit support)
• A ranking and placement of clients utilizing ongoing analytics was created to determine the clients of higher value and profitability versus those of lower value and profitability (nine categories)
• A repricing strategy and service model adjustment plan was designed to migrate the clients from lower categories to higher categories thereby increasing profitability as well as focusing sales efforts on client categories generating higher profit levels with less liabilities
• A robust client self-service web-based CRM/Payroll system was implemented

The Results

• A company-wide correction as desired was achieved in less than two years

• The PEO was again a competitive industry leader and growing at a rate of 20%+ organically
• The internal operations became very efficient and subsequently were utilized as a divisional “back office” to the much larger national company
• The re-engineered departments achieved best practice levels and the leadership of each department was successful
• The PEO was sold to a very large national PEO less than two-three years after the engagement