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Evaluating a PEO? 12 Must-Ask Questions for Certified HR Professionals

In this article we give you the questions for the answers you need most when evaluating a PEO solution this year!

Many organizations are turning to Professional Employer Organizations (PEOs) to streamline operations, from payroll to benefits administration while saving money on employee benefits.

If you're a certified HR professional considering a PEO partnership, it's imperative you can answer the critical questions below, organized by topic.

Credentials and Accreditation

Before diving into services or costs, ascertain the credibility of the PEO.

  • Is the PEO accredited by the Employer Services Assurance Corporation (ESAC)?

  • Have they attained the Certified Professional Employer Organization (CPEO) status with the IRS?

Service Strategy

Understanding the range of services provided is key to determining alignment with your needs.

  • What services are provided, including payroll, benefits administration, HR consultancy, and compliance support?

  • Can the organization opt for à la carte services, or are they bundled?

  • How customizable are these services?

Benefits Portfolio

Employee benefits play a pivotal role in recruitment and retention.

  • What types of benefits, such as health, dental, and retirement, are available?

  • Are there options to choose from multiple insurance carriers or plans?

  • Are any unique or specialized employee benefits available?

Technological Competence

The right tech can significantly improve HR efficiency.

  • Which HRIS platforms are employed or is it proprietary, and how user-friendly are they?

  • Is mobile access available for employees?

  • How is data security assured?

Employee Relations and Support

The human element of HR can't be overlooked.

  • How are employee issues or inquiries managed?

  • What kind of support is available for training or onboarding?

  • For employees?

  • For admins?

  • For 3rd party consultants?

Staying Compliant

With changing laws and regulations, compliance is paramount.

  • How is the PEO updated with federal, state, and local employment laws?

  • What support is provided for multi-state or even international compliance?

  • Are there assurances for accurate payroll tax processing?

Experience and Client Base

Past performance often indicates future results.

  • Which industries or sectors does the PEO typically serve?

  • Can they provide references or testimonials from similar partnerships?

  • How large is their current client base?

Pricing and Contractual Details

Transparency in pricing can prevent unforeseen costs down the line.

  • How is the pricing structured: percentage of payroll, flat fee, or another method?

  • Are there hidden costs or additional charges to be wary of?

  • What are the terms for contract lengths and early terminations?

Client-to-PEO Ratio

A lower ratio often implies more personalized attention.

  • How many HR specialists are available for each client?

  • What is the typical ratio of PEO representatives to client employees?

Navigating Disputes

Hope for the best, but plan for the potential issues.

  • How are conflicts or disputes managed?

  • Is there a set procedure for resolving conflicts between the PEO's and the client's interests?

Transition Process

Switching to a PEO should be seamless.

  • What steps are involved in the onboarding process?

  • How does the PEO address potential hiccups during the transition?

Termination Protocols

Always know the exit strategy.

  • How is the offboarding process managed should the partnership end?

  • What are the company's responsibilities during a transition away from the PEO?

In Conclusion

Selecting a PEO is a decision that impacts the entire organization. Thus, thorough research, including seeking out reviews and testimonials, is essential.

With the right questions in hand, certified HR professionals can ensure they choose a PEO that aligns seamlessly with their company's unique needs.

Thinq HR & Insurance Services is a full service brokerage that offers both traditional employee benefits along with PEO options from the world's largest PEOs and even the best kept secrets!

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