Why Would a Business Consider a PEO?

PEOs allow small businesses to improve productivity and profitability, to focus on their core mission, and to grow by providing payroll, benefits, and HR services and assisting with compliance issues under state and federal law,. Through a PEO, the employees of small businesses gain access to big-business employee benefits such as: 401(k) plans; health, dental, life, and other insurance; dependent care; and other benefits they might not typically receive as employees of a small company.

According to a recent study by noted economists Laurie Bassi and Dan McMurrer, small businesses that use PEOs grow 7 to 9 percent faster, have 10 to 14 percent lower employee turnover, and are 50 percent less likely to go out of business.

10 Key Considerations When Choosing a Professional Employer Organization for Your Business

1. Assess your workplace to determine your human resource and risk management needs.
2. Make sure the PEO is capable of meeting your goals. Meet the people who will be serving you.
3. Ask for client and professional references.
4. Check to see if the company is a member of NAPEO, the national trade association of the PEO industry.
5. Check to determine if the PEO’s financial, and ethical practices have been independently accredited by ESAC the Gold Standard for PEO best practices and financial reliability.
6. Investigate the company’s administrative and management expertise and competence. What experience and depth does their internal staff have? Does the PEO corporate staffing allocation follow the priorities of the PEO’s marketed services? Does their senior staff have professional training or designations?
7. Understand how the employee benefits are funded. Is the PEO fully insured or partially self-funded? Who is the third-party administrator (TPA) or carrier? Is their TPA or carrier authorized to do business in your state?
8. Understand how the employee benefits are tailored. Determine if they fit the needs of your employees.
9. Review the service agreement carefully. Are the respective parties’ responsibilities and liabilities clearly laid out? What guarantees are provided? What provisions permit you or the PEO to cancel the terms of the contract?
10. Make sure that the company you are considering meets all state requirements.

Emplova is proud to be a NAPEO Member and to have earned ESAC Accreditation.  Only about nine percent of PEOs have earned this distinction. Learn more about the advantages of using an Accredited PEO Here.  If you are considering a PEO we are happy to answer the questions above and any other questions you may have. You can schedule time with an Emplova Specialist here.

Emplova is a unique Professional Employer Organization (PEO) that helps small to medium sized businesses grow and prosper by providing benefits, payroll, technology, compliance, and HR administration. To learn how we can create a winning HR strategy for your business contact us today.

Information in the is article is general in nature and not intended to replace legal advice in any particular matter.