8 Tips to Choose the Right PEO for Your Benefits Program

At a glance

• The main takeaway: It’s essential to choose a PEO partner who can fill both current and future gaps and properly meet your business’s HR and employee relations needs.
• Impact on your business: There are 8 key qualities you should use to narrow your search and to find the PEO who can best serve your workforce.
• Next steps: If you have questions or need further assistance in your PEO search, contact Aprio’s Employee Benefits team today.

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The full story:

In the first article of our series on professional employer organizations (PEOs), we explained how PEOs work and how to determine whether partnering with one is the right strategy for your business.

If you do decide to enlist the help of a PEO, your decision-making process shouldn’t stop there; choosing the right partner, one who can meet both current and future needs, is critical to giving your employees the best benefits experience.

Here’s a step-by-step guide to help you find the PEO partner that best addresses your small-to-medium-sized business’s goals.

1. Identify your business’s needs

Before you start looking for a PEO, it’s important to thoroughly assess your business’s benefits needs, gaps, challenges, and roadblocks. Consider the following questions:

• What HR tasks are consuming most of your time?
• Are you looking for better employee benefits to attract and retain talent?
• Do you need help with compliance and risk management?
• What is your budget for HR services?

If you can get a firm grasp on your specific needs, you will more easily narrow down your options to find a PEO that aligns with your short- and long-term business goals.

2. Research and closely vet potential PEOs

Once you have a clear understanding of your needs, you can start researching potential PEOs. It’s wise to look for PEOs that have experience working with businesses similar to yours in size and industry. Check their track record and confirm that they have valid and current certifications, such as Certified Professional Employer Organization (CPEO) status. What’s more, you should consider asking the PEOs you are vetting if they could provide case studies or success stories to give you an idea of how they have supported similar businesses and workforces.

3. Evaluate PEO service offerings

Not all PEOs are created equal; the service offerings across organizations in the PEO universe vary significantly. Some PEOs may focus solely on providing payroll and benefits administration, while others may provide a full suite of HR services, including employee training, performance management, and strategic HR support. Depending on the scope of support you need and the gaps you need to fill, you should practice due diligence and make sure the PEO you choose offers the services that are most important to your business.

4. Compare costs between PEO candidates

When vetting PEOs, cost should be a critical factor on your search list. Most PEOs charge a fee to businesses based on a percentage of their total payroll or a flat fee per employee. During your search process, request detailed pricing information from potential PEOs and make sure you understand what they include in their fee. Compare the costs of different PEOs and consider the value they could provide to your business and employees in terms of services and benefits.

5. Prioritize compliance and risk management

Complying with ERISA laws and regulations can be tricky for even the most established organizations. Fortunately, many PEOs have deep expertise in compliance and risk management, which can help you better manage your exposure and stay above board. Make sure to narrow your search on PEOs who have proven experience helping their clients navigate complex labor laws, manage workers’ compensation, and conduct safety audits, among other compliance and risk management tasks.

6. Request references

Ask potential PEOs for references from their current or former clients, especially those in similar industries or of comparable size to your business. By speaking to other clients, you can gain valuable insight into the PEO’s reliability, customer service quality, and overall operations.

7. Evaluate PEO technology and support systems

A solid PEO should offer your business robust technology solutions for HR management, such as online portals for payroll processing, benefits enrollment, and employee self-service. Additionally, make sure that the PEOs you vet can provide hands-on tech support and customer service in case of system malfunctions.

8. Consider the cultural fit

It’s important to remember that the PEO you choose will be an extension of your company; therefore, their values, culture, and approach to employee relations should match your business’s approach. Over the long term, a culturally aligned PEO will help you cultivate a more successful, harmonious partnership.

The bottom line

By choosing the right PEO to support your benefits program, you can significantly enhance your HR capabilities and provide your employees with better benefits. Before you enter a partnership, make sure to thoroughly research potential organizations and carefully evaluate their services and costs to find a PEO that ultimately will help your business thrive.

If you have more questions or need further assistance in your PEO search, please contact Aprio’s Employee Benefits team today.

Related Resources/Assets/Aprio.com articles/pages

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