Professional Employer Organizations(PEO) help businesses of all sizes decrease daily human resources requirements while staying compliant and enabling better recruiting of qualified candidates. Hundreds of PEO providers exist on the market creating difficulty for organizations to identify their ideal PEO partner. Explore the seven primary factors companies need to use for selecting a PEO provider.

The selection of vendors for expanding your business advisory team needs thorough evaluation to determine their benefits for your organization. The process of identifying appropriate solutions proves difficult for most business owners. The right business choice leads to building a partnership that supports your company’s future development. A bad PEO provider choice will possibly send you into a challenging work relationship that might force you back to your original staffing search from the beginning.

7 Easy steps to Evaluate when Choosing a PEO Provider

Discover the best PEO partnership that supports their business goals. Here’s how.

1-Approach Only License PEOs

PEO professional standards can be measured by their present industry accreditation status. The accreditations these credentials provide prove professional excellence, which helps minimize financial hazards and compliance risks for your organization.

The Employer Services Assurance Corporation (ESAC) verifies the professional standards of Extensity through its designation as an accredited PEO industry organization with financial assurance operations under national standards. ESAC verifies PEO businesses follow financial, ethical and operational standards by providing surety bonds that safeguard employee wages along with payroll taxes and benefits and insurance premium payments. CPEO accreditation stands as the top rating for assessing financial confidence in the industry.

2-Stay away from PEOs that refer their Essential HR Duties to External Providers

PEO service providers deliver access to full teams of HR experts who provide active management for your account as its primary benefit. The outsourcing of HR services by PEO companies brings them even further away from your organizational operation.

A PEO partner should possess in-house HR personnel to provide operational insights into your everyday needs and comprehensive strategic guidance. During your PEO audit, conduct an examination to verify the provider does not send their HR solutions to external vendors for any of these services:

  • Payroll Processing Management
  • Administration and planning
  • Workers’ reimbursement and risk management
  • Recruiting and maintaining services

3. Connect with an HR Manager

Involve a PEO HR Manager in your first meeting as you seek to explore their services. The opportunity exists to personally meet representatives from a quality PEO who provide daily services to businesses.

Does the HR Manager have qualifications sufficient for the job? What number of years exists in their HR career? We need to learn if this PEO manager has worked with clients who are similar to our organization or our clients. How does the HR Manager view the main human resource challenge that your sector currently faces?

Search should lead to candidates who can present solid perspectives about human resources matters combined with a thorough understanding of your industry situation.

4. Carefully Read the Service Agreement

A PEO service agreement establishes important information about ownership between the co-employing parties. All essential information that shapes your co-employment must be provided in your service agreement.

The PEO delivers three essential service areas through its contract which are:

  • Workers’ payments and liability insurance
  • health insurance plans
  • Payroll services
  • Multiple administrative tasks
  • Liabilities owned by each party
  • Terms of the contract
  • Itemized pricing breakdown

Reviewing a PEO service agreement must be a clear and certain experience for you as a prospective client. PEOs should be avoided if they fail to disclose agreement terms and their contracts use unnecessarily complex language.

5. Research the Company’s Profile

The history of a PEO company shows the continuance of professional partnerships and reveals organizational priorities. Examining the best PEO for startups business structure, focusing on the company record of existing businesses since their establishment reveals a thorough analysis. PEO companies that are new to the market fail to possess relevant industry experience, and traditional large-sized PEO providers demonstrate little growth between startup and present, which restricts their ability to customize solutions for your specific business needs.

6. Request a Tech Demo

Obtain an on-site demonstration of how the PEO’s HRIS solution functions for human resources information system capabilities. Search for advanced technology platforms that deal with all HR and benefits administration processes. The evaluation process should focus on these particular elements:

  • Employee self-serve tools
  • Educational and training resources
  • Manager tools
  • Reporting functionality
  • Onboarding solutions

The system software should function easily while maintaining safe digital storage through cloud based access. Adopting payroll processing software for small businesses can streamline HR tasks and reduce the burden of manual payroll calculations.

7. Present your Company’s Biggest Challenges

Present a management issue related to human resources or compliance, then request their advisory. Quality PEO partners educate their clients about process optimization of their most time-consuming HR functions while describing their solutions to address business challenges.

IS every PEO the right fit?

HR outsourcing firms possess different suitability levels for individual client requirements. Becoming involved with a PEO agreement too quickly would mean risking both service quality and type from PEO to PEO. A PEO company provides unique combinations of experiences and solutions and professional perspectives to help your organization. The first review of these topics with both your insurance broker and PEO candidates leads to finding a partner who meets your expected service standard and solution requirements.

Read More: Georgina Rodríguez