Given that companies that use PEO are 50% less likely to go out of business choosing to work with a PEO service may just be one of the best business decisions you ever make. Choosing a PEO service means that you won’t have to worry about human resources, payroll management, workers’ compensation, employee benefits. It means that you’ll have professionals handling those matters while you place your focus on other core aspects of the business.
The bigger problem presents itself in choosing the right PEO company. What factors should you consider, or what should you look for? In this guide, we’ll delve deeper into all the factors you must consider when choosing a PEO service to ensure you make an informed decision.
1. Consider What Your Needs Are
Before you embark on the quest to choose a PEO company, it’s advisable to think about your needs. Consider what you hope to achieve by hiring a PEO service and outsourcing your human resources needs. What tasks do you need help with?
This will help you narrow down the kind of PEO company you need and make choosing one easier. Not every PEO company is the same, and you may find one that excels in what you need, and another whose services have no bearing on your business whatsoever.
It may not necessarily mean they are not good enough. It means they are not good enough for your business as they won’t be able to meet your needs. With a list of everything you need, you can fine-tune your search process and make it easy to pick one.
2. Consider What Benefits You’ll Get
The perks and benefits the PEO has to offer will play a huge role in the company you choose. These benefits play a considerable role in the happiness and productivity of your employees, which means you must ensure you get the very best deal for your business. Partner with a company that will be your advocate and one that will strive to secure you the best deals in the marketplace.
Choose a company that will use their purchasing power to negotiate the best benefits when it comes to insurance policies, healthcare, and the like. Consider the breadth of their benefits while at it. If they only offer a state-specific healthcare plan, you may not be able to care for other employees in a different state.
Even if your business is still young, check whether the company is flexible enough to scale with your business as you grow. Get a few perks that benefit your business and ensure you’re getting all this at a considerable price.
3. Consider Their Expertise
When choosing a PEO company, you can’t afford to overlook their expertise, regardless of the attractive benefits they offer. HR laws and regulations shift so often that you need a professional company with the capacity and capability to handle all your HR matters effectively and efficiently.
They need to have an ability to keep up with all these updates and notify you when something changes or comes up. When choosing a PEO service, pick a company that’s not only professional but experienced and skilled with the knowledge and expertise required to provide you with the services you need.
4. Consider Their Resources
Apart from demonstrating expertise, it’s imperative that you consider how much resources the company brings to the table. Does the company have access to legal experts that will help you figure legal matters out? Do they have professional accountants to manage your payrolls?
What other experts and specialists do they have that will potentially benefit your company? Choose a PEO company that brings with it a wealth of in house experts with industry-recognized certificates in their areas of expertise. In a nutshell, you want a company that you can easily rely on, and one that’s dependable.
5. Consider Their Financial Strength and Security
One of the most important factors you need to consider is whether the company has enough financial strength and security. Before you consider getting quotes for PEOs, do your due diligence and narrow down a few seemingly great companies. Check the company’s history of adherence to industry practice and how professional they are.
Verify whether the company’s financial statements are audited independently by the CPA. There are several reasons why it’s vital for you to check their statements. To begin with, the PEO registration and regulation laws require it because audits tend to enhance accuracy and control of their financial information.
It’s considered an industry best practice by the National Association of Professional Employer Organization. Most PEOs are private entities, so you have to ask them to provide you with their statements. Beyond this, consider whether they are certified by the IRS.
6. Check Their Communication
Customer service is one of the most vital aspects of a good PEO company. This is not something you should think about after signing the papers. It can be extremely frustrating if you can’t find them when you need them.
It’s essential that you meet the people who will be serving you to gauge whether they have a dedicated communication team that will always be available. Inquire about their staff support ratio to measure the kind of customer services to expect.
7. Consider the Terms of the Contract
Even after ensuring you find all these things, you still need to make sure the terms of the contract correlate with what you need without compromising your company. Check the clauses and each party’s responsibility and liabilities. Are they all well laid out?
Does the contract allow you to cancel the terms in case you’re no longer pleased with the company? Does the PERO company carry employment practices liability insurance? Will you gain any coverage through the co-employment relationship with the company?
Choosing a PEO: Everything You Need to Consider
As an employer, there are so many things you need to deal with, like healthcare reforms, tax laws, and employment laws, some of which are quite hard to keep up with. Choosing a PEO service and establishing a co-employment relationship with them can be a great investment. Some of the benefits of PEOs is being able to keep up with all these matters, among other things, and contribute towards the success of your company by reducing liability.
Beyond that, if you want to find the best workers’ compensation policy, give us a call, and we’ll help you find the best workers’ comp company that fits your needs.