4 Questions to Ask a PEO

4 Questions to Ask a PEO

Small and medium-sized businesses have many moving parts that can overwhelm business owners, possibly requiring them to invest in efficient and cost-effective solutions to realize profitability. A professional employment organization (PEO) allows you to offload the tedious but necessary HR tasks, including payroll, risk management, benefits, and workers’ compensation to a third-party services provider.

PEOs offer a unique relationship where the PEO undertakes the employer’s administrative responsibilities, such as HR, payroll, employee benefits, risk management, and workers’ compensation. This allows the employer to focus on core business functions, including building revenue and strengthening employee relations. As a result, your company will access the products and services necessary to address your business needs while reducing risk, minimizing cost, and increasing productivity.

Here are some of the questions you should ask when evaluating the right PEO partner for your business.


1. What Employee Benefit Plans Do You Offer?

Today’s top talent is looking for something more than just a paycheck, and that is one thing that employers appreciate. Top-notch employers prioritize the best possible employee benefits package at competitive rates. Leading benefits packages include top-tier health insurance plans, life insurance, retirement planning options, corporate wellness programs, an expansive savings plan, and much more.

Before settling for a particular PEO, make sure to inquire about available benefits, and existing carrier partnerships, and provider ratings. This will place you in a better negotiation position when it comes to selecting a benefits package that addresses the lifestyles, needs, and expectations of your workers in the best way possible.


2. What Services Should I Expect to Pay For?

If you want to determine which services are offered from the PEO provider you choose, consider asking for a breakdown of the package you choose into line items. If a service like Affordable Care Act compliance assistance is not part of the list, yet you need it, you may want to reconsider the package or PEO provider you’re interested in.


3. What Technology or Software Do You Use?

One of the benefits of partnering with a PEO is the employer’s ability to access to new and upgraded human capital management (HCM) technology. For that reason, you need to ask whether the technology the services provider is using is user-friendly and customizable for the company and its users. Your HR team will rely on the technology a PEO provides for various employee-related tasks, which is why it should be user-friendly.

Also, if you have specific software requirements in mind or you want to continue using programs you already purchased, check the PEO’s technology and software used. You can – and probably should – request a demo, and even ask if you can test the technology yourself before signing up to ensure that it is ideal for your team. Another question to consider asking is if your current programs may be integrated with the PEO technology and software.

You may also need to inquire about the pros and cons of the software a potential PEO is using and the duration of using the technology. If, for whatever reason, you have doubts, ask for referrals. The current clients that rely on the software a specific PEO offers will be able to offer insight to firsthand experience with the PEO’s software functionality.


4. How Can I Reach You?

Working with a PEO who offers your business necessary support means that they should be readily available when you need assistance. For instance, your PEO partner should prioritize every facet of your relationship, including communicating technology issues. Many times there are deadlines at stake which can inadvertently affect your employees and customers.

Before engaging a PEO service agreement, find out whether you will work with a dedicated team that knows your operations and is familiar with your industry and standard operations and administration needs, or if you will speak to someone new each time. A prospective PEO can confirm whether they have dedicated representatives for your operations, or if a 24/7 call center to address your needs.

It is important for the PEO to set expectations when it comes to communication. A PEO acts as an extension of your back office, which is why insight into how you can reach the service provider when you have an emergency is critical.

Identifying the ideal PEO is all about vision. Ensuring the PEO you choose understands the vision you have for your organization is paramount because it will allow the PEO to effectively strategize a business plan to achieve your specific goals. Locking yourself into a contract only to realize that you are working with the wrong PEO after some time is expensive and frustrating.

Asking the right questions beforehand can help you choose the right PEO the first time around. To learn more about PEOs or if you’re interested in partnering with a PEO, please contact Avitus Group for a consultation.




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