Case Study

The Client

A post start-up PEO with 7,000 leased employees operating on a regional basis.

The Challenge

The PEO had grown rapidly during the startup phase due to the transition of clients away from their now competitors (post non-compete periods). The PEO executives had a PEO based understanding of some of the areas of functionality particularly sales; however, relied upon loyal previous associates now hired to manage the various operations of the PEO. The owners desired the identification and correction of potential liabilities as well as the establishment of best practices within all areas of the PEO.

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 human resources program was re-built to include handbooks, policies, internal personnel, client services, etc.
• The PEO’s company structure was increased to include several operating units for the containment of varying degrees of SUTA and workers’ compensation risk levels (the tolerances were matched with several differing carriers)
• A new insurance Broker, TPAs and associated servicing agencies were sourced and engaged
• Underwriting and contractual management programs were implemented
• Assessments of current management personnel were made
• The sourcing of additional Director level talent was secured and subsequently placed
• Detailed analytics were utilized to increase internal efficiencies
• A company-wide staffing model was developed which included FTE and costs by skill levels required allowing scalability

The Results

• The net profitability of the PEO doubled within a year
• The cash flow increased by 50% through risk containment, claim segregation and other management changes while maintaining the same revenue volume
• The PEO gained best practices within a two-year period
• The internal management personnel were trained, and their skill sets were increased substantially during the period
• The PEO was positioned for future growth and scalability while achieving efficient operations