Professional employer organizations (PEOs) are responsible for overseeing a wide range of human resource responsibilities. Businesses often reach out to a PEO to help streamline their HR functions, such as payroll and benefits.
Delegating these tasks frees up valuable time and allows business leaders and employees to focus on growth-driven activities.
Steps To Find The Right PEO
While the benefits of partnering with a PEO are indisputable, choosing a professional employer organization to work with can often be challenging. Businesses want a PEO that is professional, reliable, and efficient.
They want to know that their company and its employees are in good hands. Here are some simple tips on how to choose a PEO and where to find one.
Review Licensing And Accreditation
Professional employer organizations must meet specific state and federal requirements before they can legally offer services. A PEO should be licensed, accredited, or registered with organizations like the Employer Services Assurance Corporation (ESAC), the Better Business Bureau, or the local and state chambers of commerce.
A PEO can also voluntarily become certified with the IRS to assume responsibility for federal employment taxes for wages.
Check References Of The PEO
Qualified PEOs will generally have no problem providing interested clients with a list of references. Ideally, a business wants to look at three to five references from past clients, including newer and older clients.
When interviewing these clients, ask questions like why the company joined a PEO, why they picked this particular PEO, how many PEOs they reviewed before choosing this one and what they believe to be the PEO’s biggest weaknesses.
Perform Online Research
A quick internet search can say a lot about a PEO. Do some research to see what people are saying about the organization online. Explore the PEO’s website and social media pages, including Facebook, Twitter, and LinkedIn.
See how the salespeople on these platforms interact with clients and how the organization approaches complaints or questions. If much of the information found online is negative, consider choosing a different PEO with a better online reputation.
Research The Organization’s History
Unless a PEO is a startup company, there should be some history of the organization online. Learn how long the PEO has been around, how many years the company has offered HR services, where the company is headquartered, and how many corporate employees it has.
Also, review the company’s mission, the credentials of its staff members, the company’s values, and how the PEO usually communicates with clients.
Look At Benefits Packages
When searching for quality PEOs, consider what options are in the benefits package. PEOs can often offer businesses more options in terms of insurance and other benefits compared to what they could obtain without this partnership. Choose a PEO that can offer an attractive benefits package that will benefit both employers and employees.
Understand Employee Benefits Funding
Before selecting a PEO, look into how the employee benefits are funded. Some PEOs are fully funded, while others may be partially funded. Also, determine who the third-party administrator (TPA) or carrier is for the organization and if it is authorized to do business in the state.
Calculate Cost
A great PEO only makes sense if the business can afford the partnership. PEOs can be found at all price points, and it may be necessary to shop around to find an organization that fits the company’s budget. PEOs generally set prices based on a company’s size and needs.
Carefully Read The Service Agreement
Before signing any documents, a business should always take plenty of time to review the service agreement drawn up by the PEO. The service agreement should outline the respective parties’ liabilities and responsibilities.
It should also include any guarantees that are provided and provisions that may permit the business or the PEO to cancel the terms of the contract.
Take Note Of Expertise
When speaking about services, the consultant should have an in-depth understanding of all services and what they entail. They should be able to provide information on how their services will help the business in terms of time and cost savings.
The PEO should also be able to answer any questions or address concerns that the business may have regarding these services. If the consultant cannot answer questions or seems to lack an understanding of the services, consider choosing a different one.
Reach Out To A Qualified PEO Consultant
PEOs consist of licensed professionals who have a deep understanding of HR services and have the skill set needed to step into this role effectively. For any business that wants to take the hassle out of managing human resources responsibilities, consider partnering with a PEO.
For more information about services or to speak with a qualified consultant about acquiring services, contact New City Insurance to schedule a consultation.