How to Choose a PEO
Once you have made the decision to use a PEO, there are a number of factors you should consider before choosing the one to whom you would want to entrust your employees and your sensitive information.
- How long have they been in business? (PEOs need to demonstrate staying power for you to know that they are well managed.)
- Is the PEO accredited by the Employer Services Assurance Corporation (ESAC)? (It is critical to know that the company is serious about providing protection for your monies.)
- Have you checked their financial background?
- Does your business fit the PEO’s client profile? (You should affiliate with a provider who services clients that are somewhat similar to your company.)
- Have they complied with PEO-specific registration requirements in the states where you have employees?
- How do they handle customer service? Do they answer their phones ‘live’ and are they staffed to handle the incoming call volume? Do you have to navigate through call centers, escalations and so on before you can get a real person to help you?
- Does the PEO have an employee/employer self-help website? Is there an integrated payroll and HR information system? How tight is the security?
- Do they require their HR and Payroll people to be certified?
- Does the PEO offer a choice of medical plans, both local and national? Are the health plans fully insured? Does the overall benefit package fit the needs of your employees?
- Does the PEO charge a flat administrative fee per employee or does it base its fee on a payroll percentage? (Flat administrative fees are much easier to understand. Make sure you understand exactly what you will be paying.)
- Do you understand their service agreement and what the responsibilities and liabilities of each party will be?
- How well does the PEO manage employer risk? Is there a risk management department with trained and certified risk management professional(s)?
Continue to learn more about HR Outsourcing…
What is a PEO / Co-Employment
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