How a Growing Company Saved $1.2M—And Avoided Spiraling Costs—By Rethinking Their PEO Strategy

This is a real client journey that began in 2019. Starting with just 25 employees and a $3,000 deductible health plan, the company’s leadership was determined to find a smarter way to control costs, support employee wellbeing, and scale efficiently. By teaming up with an expert PEO broker and embracing a proactive approach to the PEO market—switching partners when needed, with expert guidance—they unlocked extraordinary outcomes: maintaining a $500 deductible health plan as they grew to 175 employees, saving over $1.2 million in six years, and keeping total plan increases to a remarkable 5%.

• Company: Rapidly growing, multi-state business.
• Industry: Technology/Professional Services.
• Size: 25 employees at start, now 175
• Footprint: National, remote-friendly workforce.

Quick Facts:

• Plan Evolution: Moved from a $3,000 deductible to a $500 deductible plan, identified by a proactive PEO broker
• Savings: $1,200,000+ saved over six years, enabled by strategic broker-led market reviews
• Total Plan Increase: Only 5% over six years (most employers see 10%+ per year!)
• Growth: Employee count grew 7x during journey

At the outset, the client’s options were limited. The original PEO package included a $3,000 deductible health plan—costly for employees and still expensive for the business, especially as the team planned to expand. When a competing PEO, identified through their broker’s market expertise, introduced a $500 deductible plan, the company seized the opportunity to improve coverage and keep costs in check.

But the journey didn’t stop at one good decision. Over six years, a partnership with their PEO broker proved to be the essential ingredient. Instead of sticking with an incumbent out of habit, the client regularly leveraged their broker’s insight and negotiation power to force better deals and avoid the status quo of mounting year-over-year increases.

Key pain points they overcame with broker guidance:

• Relying on a single PEO (the “set and forget” method) would have led to compounding costs and missed savings.
• Without a broker’s recurring marketplace resets, benefits costs typically spiral with 10%+ annual increases.
• The complexity of evaluating and switching PEOs was simplified through the broker’s proactive leadership and structured process.

The company, with PairPEO as its PEO broker as ongoing advisor and advocate, embraced a “test the market” philosophy every renewal cycle. Each time, their broker compared the incumbent PEO’s offering against what the best in the market could deliver (on both cost and quality), creating ongoing leverage and options.

1. Deductible Drop: The first big win came when the broker guided the switch to a PEO offering a $500 deductible plan, replacing the original $3,000 deductible.
2. Consistent Competitive Bidding: Each renewal, the broker ran a competitive process, pitting PEOs against each other for the best rates and richest benefits—freeing the company from biased or limited perspectives.
3. Switch When It Matters: The broker’s unbiased recommendations empowered leadership to move PEOs when it meant meaningful gains for their team and their bottom line.
4. Locking In a Low Trend: Over six years, this broker-driven strategy kept cumulative plan increases to just 5%—dramatically below the market norm.

• $1.2M+ Total Savings: Over the six-year journey, broker-led PEO switches and relentless market competition saved more than $1.2 million that the company would have otherwise left on the table.
• Rich Benefits Maintained: Employees enjoyed a $500 deductible plan, a significant improvement over the original $3,000 deductible, with the broker ensuring each new PEO was the best fit in terms of benefits depth and cost.
• Minimal Cost Increases: Total benefits plan cost increased just 5% across six renewals—while most businesses absorbing 10%+ hikes each year would have faced a 100%+ increase. The broker’s vigilance shielded them from runaway costs.
• Growth Supported: Scaling from 25 to 175 employees, the benefits stayed affordable and competitive, fueling retention and recruitment—all made possible by the broker’s market insight and proactive strategy.

“If we’d stuck with our original PEO and just kept renewing, we would’ve saved maybe $540k, but ended up paying double for the same plan by year six. Switching PEOs with the right guidance created $660,000 in additional savings and helped us offer top-tier benefits as we grew. That’s a mindset shift every company should have, with a PEO broker by your side.”

— Executive Leader, Tech Firm

What If They Had Just “Set and Forget” with Their PEO?

• Same Starting Point: $3,000 deductible plan, 25 employees
• No PEO Switching or Broker Involvement: Remained with the original PEO and plan
• Total Savings: $540,000 over six years
• Total Increase: More than 100% increase in plan costs over six years
• No Broker-Guided Project: But no access to better benefits or the extra $660,000 in savings discovered through proactive brokerage

Staying with a single PEO (“set and forget”) is exactly what PEOs hope clients will do. This case shows the true power of a “change mindset,” but even more, the importance of having a PEO broker to guide, facilitate, and execute those changes. Periodic PEO transitions, rigorous bidding, and a willingness to switch, led by an expert broker, don’t just control costs for one year, but deliver extraordinary cumulative savings and the ability to retain world-class benefits as you grow.

Change mindset vs. stay mindset, with broker leadership, yielded $660,000 in additional, real-world savings. Don’t leave that money, or the expertise of a seasoned PEO broker, on the table.