Hunt #10: Sell PEO HR services

Great for in-person networkers & those that crave autonomy

Author

The Quota Hunter
August 20, 2024

Good morning hunters!

Today's newsletter covers the PEO industry (outsourced HR & payroll), some recently captured HOT jobs I think are interesting, and words of wisdom to consider as you think about your sales career & journey.

Enjoy!

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Main Event

Recently, I spoke with someone who has built a diverse career, with experiences in social work, recruiting, operations, and now, as a B2B salesperson. The one constant throughout their journey has been their superpower: in-person networking. This skill has been crucial to their success, particularly in the world of outsourced HR and payroll.

In this post, we’ll dive into their experiences selling a PEO solution, explore a day-in-the-life in this role, and weigh the pros and cons for anyone considering a similar path.

Let’s get started!

Overview of the Outsourced/PEO Industry

Managing payroll and HR internally can be a significant challenge, which is where PEO companies come in—to offload much of the complex HR work, allowing businesses to focus on growth.

PEO stands for Professional Employer Organization, a service that provides essential functions for companies such as payroll, benefits, and compliance. Some of the most prominent companies offering these services include ADP, Insperity, TriNet, and Paychex.

While bringing HR in-house becomes necessary at a certain point, for companies with 5 to 100 full-time employees, partnering with a PEO can offer substantial benefits, including:

  • Lower healthcare costs and premiums

  • Reduced HR overhead

  • Mitigated compliance risks

  • Improved employee retention

  • Better infrastructure for scalability and efficiency

This post provides a general overview of what it’s like to be a salesperson in the PEO industry without focusing on any one company.

Overview of an Account Executive Role in the PEO Industry

This is fundamentally a relationship-based role. Deals can take a long time to close, and with significant competition in this industry, companies often choose the salesperson and provider they trust most to handle their delicate and sensitive HR tasks.

One of the biggest challenges in selling a PEO solution is that companies typically switch benefits or payroll providers on January 1st or June 1st. While companies can work “off-cycle,” these are the primary buying windows, meaning deals can be quite “lumpy” throughout the year.

It also usually takes time to build a network and start closing deals. The salesperson I spoke with mentioned it could take about two years to establish solid ground and become a consistent producer.

At their company, the #1 metric leadership focuses on is meeting with potential prospects. As long as you’re hitting those targets, you’re unlikely to be let go during your first year.

Some PEO companies assign Account Executives geographical territories, while others do it by industry, such as Financial Services or Tech. Both models have their benefits, but what’s common in this industry is splitting commissions with peers.

Here are a few examples:

  • Geographic territory: You’re assigned Massachusetts but meet someone who owns a business in New Hampshire.

  • Industry focus: You’re assigned Financial Services but meet someone who runs a tech business.

In both examples, you’d likely need to bring in an Account Executive who covers the respective industry or territory and split the commission with them.

There are pros and cons to a model like this, but in my opinion, it’s better to be involved in more deals than fewer!

Day-in-the-Life of a PEO Account Executive

In this industry, most companies allow a lot of autonomy in finding deals. The Account Executive I spoke with makes about 20 cold calls per day and attends up to 3 in-person meetups per week.

They noted that while some colleagues succeed by making calls all day, others, like themselves, focus on building a network through in-person events that either refer business to them or buy from them directly.

There is much to learn about this industry, so a big part of this job involves educating potential customers on the benefits of working with a PEO firm and helping them navigate sensitive and potentially painful HR issues. Given that these customers often lack internal HR expertise, having someone they can trust for advice is invaluable.

Once you have a customer interested in moving forward, you need to guide them through the underwriting period. This is essential because the PEO company enters into a co-employment relationship with the customer.

Definition of Co-employment: 

Co-employment is a partnership where a PEO and a client company share employer responsibilities, with the PEO handling HR functions like payroll, benefits, and compliance, while the client maintains control over day-to-day business operations.

Underwriting helps a PEO assess risk, workers’ compensation insurance, benefits compliance, client fit, and financial stability. Once the underwriting process is completed, a PEO can set appropriate pricing and ensure they can provide effective services to their clients.

After the client passes through underwriting, they are handed off to Customer Success to ensure the company and its employees are properly set up.

Compensation & Earning Potential

Typically, Account Executives at PEO companies earn salaries similar to those of SMB/Mid-Market SaaS Account Executives, with higher salaries awarded to salespeople with more experience—especially relevant experience or through internal promotions over time.

The salesperson I spoke with mentioned that many salespeople start earning $200k+ in commission from their second year onward, with the highest-earning Account Executives making over $1M annually.

Commission models vary, but in many PEO companies, an Account Executive earns more commission as their customers add W2 employees. Some PEO firms might cap commission after a set number of years, while others may offer commissions on closed-won customers for as long as the customer remains with them.

Pros & Cons of Working in the PEO Industry

Pros:

  • Significant autonomy

  • Ideal for in-person networking pros

  • Opportunity to work with smart, tenured peers and learn from them

  • Strong earning potential, with opportunities for promotions and to “run your own book of business”

  • Recurring commissions as your clients grow

Cons:

  • Slow ramp-up to start earning significant commissions

  • Lumpy deals, with periods of feast and famine (many PEO companies set higher quotas during the “busy” season and lower quotas during slower months)

  • Leaving the company means leaving behind all commissions/residuals (though this is likely standard across industries)

  • Minimal inbound leads—but there is an opportunity to earn “splits” on deals

Recently captured jobs

Here are 14 of the newest sales jobs found on the Quota Hunters job board:

Words of wisdom

If you’re looking to switch industries, don’t get caught up in the “title” you’d be receiving. Instead, focus on finding a great company, industry, and job you’d enjoy & could thrive in.

I’ve seen too many folks prioritize title as one of their main requirements.

Don’t fall into the trap - it’s hard to find a company with strong fundamentals, selling a product that people actually want, with a talented team around you to learn from & grow with.

Find a company that offers those things (and will pay you what you want/need) without worrying to omuch about title.

Don’t let great opportunities slip by for minor details.

That’s all for this week. Feel free to reply with any questions or feedback. Happy hunting!

Jay Green “The Quota Hunter”