Are you using the right PEO?

If you are not in a Professional Employer Organization (PEO), then this post probably won’t make much sense to you. But, feel free to download our free PEO Introduction or to read our other blog posts related to PEOs.

However, if you are in a PEO, read on. Joining a PEO is no easy task, you are trusting another company with your payroll, benefits, workers’ comp insurance and HR compliance. Chances are you spent a good amount of time pondering if you should or shouldn’t and decided to go PEO because you had a specific need.

All PEO's are not created equal and believe it or not there are over 400 PEO providers. PEO's are as different as the small businesses they call clients.  Variety is good, but it can be difficult to know if you are getting the most from your PEO. Over the last six years, we’ve helped hundreds of companies find the right PEO provider, making us experts in all things PEO.

Here are a few basic questions you can use to evaluate your current PEO. 

  1. Does your PEO offer a medical plan? 

One of the many advantages of using a PEO is being able to take part of their master medical plan. The PEO can get better rates and offer Fortune 500 plans, because of the combined buying power of their combined clients. If you are in a PEO that doesn’t have a medical plan, you should find one that does. 

       2. Does your PEO charge flat, transparent administration fees? 

Every PEO charges administration fees for their services. However, if your administration fee is a percentage of payroll, you need to change. Alternatively, some PEOs bundle together their fees with your State/Federal taxes and your Workers’ Comp rates. This is a huge red flag, because as your employees wages increase, so do your administration fees.  After all, shouldn’t your PEO be transparent with you and not hamper your growth? 

       3. Does your PEO nickel and dime you? 

Other than additional pay checks and recruiting and/or employee screening services - your administration fee should cover every service you get from your PEO. If you are paying every time you need something, it’s probably time to look at other providers. 

        4. Do you have to call a call center every time you have an issue? 

Call centers serve their purpose, but not when it comes to your business. If you are not talking to the same people that work with you on your issues, you are in the wrong PEO. Having to explain your problem to a new person, each time you need something isn’t productive.  You should know your PEO team members and they should be responsive to your needs.

       5. Does your PEO add value to your business? 

Your PEO provider should make your life easier, not harder. Saving money on benefits and insurance is critical, but your PEO should also be your partner in making your company an employer of choice, not just another job. If that is not the case, it’s time to explore your options. 

The questions above are how we advise our clients to choose the right PEO for their needs. Choosing a PEO is not an easy task, but it doesn’t have to be unusually hard, either.  It should be a relationship that makes your company better and if that is not the case then you should take a look at the 399 other PEOs throughout the US.

Let us help you get started.  Our service is free to you and we’ll take the time to understand your business and your goals, then providing you with a shortlist of the best PEOs for your company.

Rodney Steele