Why Most Companies Considering PEOs Never See a Proposal

In 2023, The National Association of Professional Employer Organizations (NAPEO) polled 500 companies to understand the experiences, drivers and barriers across the Professional Employer Organizations (PEO) market.

Among many promising statistics there are some puzzling results, namely:

  • Of 343 companies (~70% of 500) that do not currently use PEO services 60% report having considered using one.  
  • Yet only, 22% of the 343 (75) report having actually received a formal proposal from a PEO.

This significant drop-off from consideration to receiving concrete proposals for PEO companies raises critical questions and underscores a missed opportunity within the industry.

Why does this gap exist? The considerations are multifaceted:

  1. Lack of Follow-Through: Sometimes, the ball drops on the PEO’s side. Whether due to inadequate follow-up processes or misjudgement of client interest, PEOs may simply not be delivering proposals to interested companies.

  2. Qualification Process: PEOs may have a stringent qualification process, filtering out many potential clients prematurely based on perceived fit or financial capacity.

  3. Resource Constraints: Crafting personalized proposals is resource-intensive. PEOs might lack the sales force or the operational bandwidth to provide proposals to all interested parties.

  4. Perceived Lack of Readiness: Companies may signal interest but also communicate that they are not ready for a formal engagement, leading PEOs to prioritize other prospects, letting the lead go cold.

So, what should a savvy PEO company do to ensure it capitalizes on expressed interest? Here’s the blueprint:

Build deep connections and understanding

  • Client-Centric Discovery: Conduct thorough research to understand the potential client's business, pain points, and how a PEO can address them. Discover how PEOs can tailor solutions by deeply understanding their client’s unique needs and goals in this blog post How Niche PEOs Become Essential Partners by Mastering Client-Centric Discovery

  • Prospect Education: Ensure that prospects who are interested but not ready to buy don’t go cold by continuing to create engagement with PEO solutions. This might require stronger collaboration between sales and marketing teams in building continuous education about the benefits and processes involved in PEO partnerships.

  • Lead Nurturing Programs: Develop lead nurturing programs that keep potential clients engaged and informed until they are ready to receive a proposal.

  • Feedback Mechanisms: Implement feedback loops to understand why companies do not proceed to the proposal stage and adapt strategies accordingly.

Enhancing Sales  Processes

  • Streamlined Proposal Process: Develop a system that can efficiently produce customized proposals to meet the high demand. This can include putting upfront work into creating templatized proposals that are easy to tailor by sales teams.

  • Automated Qualification Tools: Use technology to quickly and effectively qualify leads, ensuring no interested company is left without a follow-up. If you don’t already use a Customer Relationship Management software, look into implementing one. And if one is already in use check with your team on the lead scoring and management cycle.

  • Consultative Approach Train sales teams to take a consultative approach, understanding that a proposal is not just a formality but an opportunity to demonstrate a value-adding opportunities of your business services.


For PEOs, converting interest into actionable proposals is critical. It's not just about the volume of interest but the quality of engagement and follow-through. The market is clearly there—businesses are considering PEO services. The onus is on PEOs to harness this potential, ensure every expression of interest is met with a strategic response, and transform consideration into tangible business growth.

At ADEC USA, we understand the importance of engagement and the value of a proposal. Contact us to see how our tailored outsourcing solutions for PEO can make a difference for your business.

 For additional insights on building a successful PEO company, visit our PEO Hub.

Blog Author

Anthony Catajan

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