As a business manager, maintaining competitiveness and efficiency are crucial aspects of success. One way to accomplish that is through the utilization of PEOs.
PEOs (Professional Employer Organizations) are third-party outsourcing firms that provide solutions for various HR activities such as payroll management, legal compliance, healthcare benefits, and many more. A business may employ a PEO’s services when they feel it is necessary to get additional HR support or do not have the funds to invest full-time in their HR functions.
The right PEO will streamline your HR functions, reduce costs, and adhere to compliance laws; however, the wrong one can lead to further mistakes and legal issues and negatively impact your business.
In this article, you will be guided through the process of choosing the right PEO.
Understanding Your Business Needs
The first step in the process is determining your company’s current situation. Taking a deeper look at your business goals, size of the workforce, industry, and current HR processes helps identify which PEO works best for your business.
After assessing your current situation, a detailed identification of your weak points and areas in need of improvement is required.
Whether it is payroll processing, legal compliance, or talent acquisition and management, identifying your sore points is necessary to target a PEO with the services and skills you need.
More importantly, the right PEO is one that has been accredited by the Employer Services Assurance Corporation (ESAC) and the Internal Revenue Service (IRS), as well as certified as a Certified Professional Employer Organization (CPEO).
Accredited and licensed PEOs have been through rigorous checks and audits with the sole purpose of proving that high quality is the standard practice.
Find out if a PEO is ESAC-accredited by visiting this website and this webpage for a public listing of CPEOs.
Researching PEO Options
There are many PEOs on the market, and it is crucial for you to explore the different types to identify those that align with your business values and needs. PEOs vary in industry focus and size, so consider your industry and company size when researching to facilitate the process.
One way you can research PEO companies is through word of mouth. Getting recommendations from other business owners, colleagues, or industry leaders is an extremely beneficial way to understand how certain PEOs work within your industry.
In addition, the internet is an excellent source of information when utilized correctly, as it contains various different materials for researching PEO companies. Those include customer reviews, ratings, forums, and well-informed articles, all of which allow you to form your own impression of the companies.
To ease the research process, take a look at this comprehensive guide to the best PEO companies.
Factors to Consider When Choosing a PEO
It is required that you research the different PEO companies, looking for ones that operate in your industry and those who have experience. PEOs with the necessary experience can help ensure that all your needs are met.
Features and customization
If a PEO does not offer the services you require, there is no valid reason to employ them. Moreover, some PEOs offer customizable options where customers can choose which services they would like, increasing personalization and ensuring specific needs are met.
Technology and software solutions
Any PEO that fails to provide easily usable and integrated software will only impede your processes, as difficult software solutions can take employees a while to adapt to, and a lack of integration causes inefficient data management and increased downtime among employees.
Finally, when you and a PEO enter co-employment, all taxes are filed under their EIN (Employer Identification Number); however, liability is shared. As a result, it is important to choose a PEO that has a strong performance history in maintaining compliance with rules and regulations as well as informing and guiding you through complex legal requirements.
Evaluating PEO Candidates
Most PEOs do not disclose prices and require you to request a quote. This can be beneficial as you can acquire detailed proposals from several companies, allowing you to evaluate the prices and terms and conditions of each.
Moreover, customer reviews and testimonials are greatly enlightening as to the nature of the company itself. Platforms like the BBB (Better Business Bureau) allow businesses to address customer complaints.
An assessment of the various kinds of reviews a PEO compiles and understanding how the company reacts eases the process of finding the right one for your business.
By understanding your business needs, researching options, and evaluating those options, you can find the perfect PEO that will help you streamline your HR functions, save costs, enhance your employees’ experiences, and help grow your business. Weighing the pros and cons of each PEO by following the guide will help you make an informed decision.