More and more companies and organizations are turning to professional employer organizations (PEO) to outsource their HR or ‘back-office’ functions in order to free up more of their time to focus on growth and customer service.
The PEO industry is still fairly new, so you may feel lost and have no idea where to start finding a PEO. That’s where we come in. In this post, we’ll go over what to look for and some key questions to ask when considering a PEO.
What Is and how to choose a PEO?
A professional employer organization (PEO) is an organization that enters into a joint-employment relationship with an employer. The PEO “leases” employees to the employer to allow the PEO to share and manage many employee and HR-related responsibilities. This partnership allows employers to outsource vital HR functions, like employee benefits, compensation, workers’ comp, taxes, and so forth.
Are you looking for a PEO to partner with? Look no further than America’s Back Office. For more than two decades, successful businesses have trusted ABO with their human resources and labor law compliance needs.
What to Look For when I’m to choose a PEO?
Before you meet with or start researching PEOs, there are a few questions that can help you gauge whether you would benefit from a PEO partnership:
- Are you spending an exorbitant amount for worker’s comp insurance?
- Are your employees asking for benefits that you can’t offer?
- Are you paying too much for health insurance?
- Is your company in compliance with state, federal, and local labor laws and regulations?
- Is your turnover rate impacting your company’s performance?
- Is your HR department as effective and/or efficient as you’d like?
Although it may appear as all PEOs offer similar features, there is a broad spectrum of factors to consider as you compare different providers, including:
- Cost
- What exactly will I be paying for? (Ask to see a breakdown of the package as line items so you can easily see what services you are getting and which ones you’re not in the deal.
- Scope of services
- Is the PEO industry accredited?
- Is the PEO IRS certified?
- Will the PEO services grow with your business?
- What’s the contract structure? Is there an option/policy for cancellation?
- Is the PEO team trained in federal, state, and local labor laws?
- How do employees access the PEO — is there a web portal or app?
- Is the PEO willing to tailor its services to fit your unique needs?
- What kind of customer service does the PEO provide?
- Is there an IT support line that’s available after hours?
- What support channels does the PEO offer? Some companies have live chat options in addition to email and phone support.
- Does the PEO have positive referrals and reviews?
- Do you provide training and professional advancement/development to my employees?
Don’t forget to ask about their current client roster too. Include questions such as:
- How many companies are you currently partnered with?
- Do you have experience working in my industry?
- How many employees do you currently represent?
- What is your client retention rate?
To choose a PEO is not an easy decision — or one to be taken lightly. But, the good news is with a bit of preparation and research, you’ll be well on your way to finding the PEO of your dreams.
We hope you’ve enjoyed our guide on how to choose a PEO. If you’re still unsure about whether you could benefit from a PEO, take our free PEO test here.
How America’s Back Office Can Help
America’s Back Office is an IRS-certified PEO (CPEO) — a distinction that only three percent of all PEOs have. We take care of the back-office duties and tasks so business owners and employees can spend their time facing customers and working to grow the business rather than being bogged down by paperwork and compliance lawsuits and other issues. If you’re interested in learning more about how we can help you take your business to the next level, contact us today for a free consultation.
