How Long To Evaluate and Implement a PEO?

When you partner with a professional employer organization (PEO), you outsource your Human Resources functions to cut back on costs and save valuable time.

Making the decision to partner with a PEO in order to take some administrative tasks off your plate is a choice that can give you more freedom, boost employee morale and productivity, and help you scale your business. But still, it’s not one to be taken lightly. In this post, we’ll go over everything you should know about evaluating a PEO.

Are you unsure whether you could truly benefit from a PEO? Take America’s Back Office’s quick and free PEO test today.

The Benefits of a PEO

The most significant benefits that companies of all sizes enjoy when partnering with a PEO are:

• Time-Saving: A PEO provides specialized staff to handle the back office functions of the business while the staff is free to deal with high-value and customer-facing tasks.
• An engaged workforce: Studies show that employee turnover is 10-14% lower for PEO clients.
• Cost-Saving: When you partner with a PEO, you don’t have to worry about recruiting and hiring a full HR department and providing insurance and benefits. Outsourcing these functions helps businesses stretch their budgets. In fact, one study found that annual administrative costs are about $450 lower per employee for companies using PEOs. The same study also found that the ROI of using a PEO (in cost-savings alone) is nearly 30%.

Evaluating a PEO — How Long Will it Take?

Now we’ll go through a quick breakdown of how long you can expect each process of the PEO evaluation and implementation process to take.

Evaluation

The time it takes each organization to complete the evaluation part of the process depends on each organization’s unique needs, and the time it takes to gather information and make decisions. We recommend giving yourself somewhere in the 60-90 day range to comfortably navigate through the evaluation process. Here’s what you should aim for:

• Information gathering — Two to three weeks
• PEO Underwriting — Two weeks
• Personal review — One week
• Other due diligence items (tech demos, references, etc.). — Two to three weeks
• Decision and contract negotiations — Two to three weeks

Implementation

Once you have chosen the best PEO for your needs, it’s time to get started! We recommend starting the implementation process at least 45 days prior to the contract’s effective date. If the start date is January 1, we recommend extending the timeline out to 60 days. This allows the PEO team and your staff enough time to execute this critical phase as employees take holiday vacations, unexpected end-of-year projects pop up, and the winter cold and flu goes around the office and people call in sick.

The more time you allow for implementation, the smoother the transition will be for you and your staff. Onboarding milestones include:

• Introduction to onboarding — One week
• Transferring information to the PEO platform  — Two to three weeks
• Employee orientation and benefits enrollment — Two to three weeks
• Technology training — One week
• Processing the first payroll —  One week

As we mentioned, the exact timeline will vary depending on several factors, including the size of the business, scope of the services, time of year, contract negotiations, and so forth. But, the timeline should give you a pretty good idea of what to expect.

For information on what to look for in a PEO, read our blog post What to Look for in a PEO (link when published).

Are you ready to learn more about how to take the next step? America’s Back Office has highly trained professionals ready to take the burden of HR Administration from business owners so you can spend more time growing your business, building relationships with your employees, and caring for your customers’ needs. Get a free quote today.

How America’s Best Office Can Help

Did you know that only 3% of PEOs are IRS-certified? America’s Back Office is part of that small population of PEOs who truly go the extra step to make sure we are continually providing the very best support to our clients. If you’re ready to improve efficiency and streamline operations, we’ll be there to help you every step of the way. Our mission is to help businesses focus on what matters most: their sustained growth and success. Schedule a consultation today! We look forward to hearing from you!