Partnering with a professional employer organization can be one of the best decisions you make for your business. PEOs empower companies to support their employees' well-being, enabling them to offer healthcare, retirement, and workers comp benefits to ensure a happy, healthy workforce. However, evaluating whether a PEO is right for you, then choosing the right PEO can be challenging. You want to find a PEO who will be a good fit and partner with your business's values.
Here are some key factors to consider:
Size of Your Business
PEOs can work with businesses of any size. However, if you have a small to mid-sized business, it is more of a challenge because you may not have an HR team and instead take on the work yourself or delegate it to general administrative tasks. If this is the case, choosing a business like PRO is a good choice because they are used to working with businesses that range from 5 to 500 employees.
Make sure that the PEO you choose has experience with your current business size and the next size up so they can grow with you. Many larger companies find it worth continuing with a PEO even after they grow to a size where it might seem more cost-effective to move HR in-house.
Your HR Needs
Some businesses have more complex HR needs than others. However, all companies need payroll processing, benefits administration, compliance management, and training. These are all things a PEO can help with. A PEO is generally more cost-effective than a dedicated payroll processor because they handle a more comprehensive array of services.
If you have particularly complicated compliance needs, such as employees in multiple states, then a PEO is particularly valuable as it can provide you with access to full-time expertise.
Expertise Specialization
Choose a PEO with other clients in your industry and the experience and knowledge of companies like yours. Also, consider how long the PEO has been in business and, if they are relatively new, the institutional knowledge possessed by their staff. A PEO that has been around for decades has higher expertise and proven stability.
Reputation
Carefully check the reputation of every PEO you are considering. Look for reviews from other clients and, if possible, from employees of those clients. Don't be afraid to ask for references to get genuine insight and feedback.
The most credible PEOs are certified and accredited, which demonstrate certain minimum levels of competence. A good reputation demonstrates a quality record and shows the PEO will likely be careful moving forward, as they value their reputation and will not want to do anything to compromise it.
Service Level the PEO Provides
Research the kind of service the PEO offers to clients and employees. Determine your required service level and ensure their response times and availability suit your business needs.
If you have employees in multiple time zones, you need to consider the hours of availability they can cover. You need a PEO that can provide coverage outside of standard work hours in their specific time zone, which may not be as important if they are all in the same place.
Also, be aware that some large PEOs may offshore their call center, which can result in a drop in service compared to a smaller PEO where you call their actual staff.
Quality service is a major benefit of working with a smaller PEO, as you are not treated as just another number or are having to wait on hold for the next available representative. Some PEO’s will even have a dedicated HR team that is focused on your team members—they know you by name and offer an unmatched level of service.
Past and Current User Experiences
Work with a PEO that has a full team offering a hands-on experience and modern HR technology. Online HR platforms are tempting, but they can only provide you with software, not the expertise and consultation a PEO can offer.
PEOs allow access to HR software you could not purchase yourself and can guide you through how it works. At PRO Resources, we’ve seen a ton of changes in our thirty years—we’ve consistently offered our "white glove service," which includes an HR team and online platform which provides your employees with direct access to the necessary tools. That means your employees can handle many things independently, such as updating changes in location, number of dependents or submitting forms. This saves your HR staff time and you'll have less concern regarding accuracy issues as the numbers or information is input directly into the online system and not some archaic spreadsheet.
Unique Contract Terms
Carefully review the PEO's contract terms, ensuring you are happy with the length of the contract, the termination clause, and your renewal options. Look to see when price increases might occur and when.
Being locked into a long contract term with a PEO that did not prove suitable can hinder your business until the contract ends. Ideally, look for a contract with a probationary period to feel each other out properly before making a longer commitment. Make sure the termination clause is not so excessive you can't get out. A good PEO will trust you to want to stay with them rather than locking you into a contract.
Grow Your Business with the Proper PEO
Working out how to choose a PEO can be a challenge. If you are looking for a PEO that offers a fantastic experience, years of expertise, and modern HR tools, schedule a converstation to find out why we are right for your business.
