7 Essentials to Consider Before Choosing a PEO
You have spent years preparing to run your own business, and you are finally operational, quickly finding success. You have a business plan, you have hired employees, you know your overhead, profit, and have anticipated potential losses. You purchased insurance, and you found the perfect location. There is just one thing that keeps you awake at night, and that is the administrative duties which are becoming daunting. The start-up you’ve invested your life into has quickly become a desperate attempt to “keep up.”
Perhaps you are further along than the first scenario, your small to medium sized business has been operational for a few years. You have tightened up your business model, you have expanded your employee base and added staff, you are more familiar with the day-to-day happenings surrounding your business. You love what you do, but from time to time you find yourself worrying about taxes, benefits, payroll – those pesky administrative requirements that keep changing. You worry about compliance more than anything.
If you find yourself in either of these categories, then it’s time for you to take your life back and seriously consider working with PEOs. Below we cover the information business owners should absolutely know and understand when determining the best PEO for their business.
What is a PEO?
A PEO is a Professional Employer Organization. A PEO is a group of experts in a myriad of areas that can help you stay up to date with all your most pressing administrative matters. Examples of benefits a PEO can give you and your business include time management, direct deposits, company accounts, and payroll tax deductions. A PEO can also assist by ensuring you remain compliant and “in-the-know” about the latest strategies and employment laws. Finally, PEOs act as protection against expensive fines and costly penalties.
How do I know which PEO is best for my company?
You have already wrestled through the big question, to PEO or not to PEO? So now you are tasked with learning how to know which PEO is best for your company.
There are literally hundreds of PEOs, nearly one thousand are operating within the United States. TriNet, ADP, Rippling, Justworks, Oasis, Insperity and Papaya Global – just to name a few. With this many options, how are you supposed to find the PEO that is best for you and your business?
Know what you want to get out of a PEO.
When you begin the process of identifying which PEO is right for you, there are a few items you should be prepared to discuss.
Here are 7 essentials to consider before you choose a PEO.
- First and foremost, the area in which you operate your business matters. If you have not yet started to operate your business, then this is a factor you must be prepared to evaluate.
- Next, you will need to be prepared to discuss the number of employees you employ. Often, your PEO evaluator will give you a category, 1-4, 5-9, and eventually more than 199. You need to know how many employees you have or hope to have. Be aware, some PEOs will require your business employs a certain number of employees to use their services.
- Next, the PEO evaluator will want to know what kind of benefits you would like to provide through your PEO, or if you want to provide any benefits at all. These benefits include health insurance, disability options, flexible spending plans, retirement plans and life insurance.
- Additionally, consider your industry, and research the PEOs who specialize in your area of expertise. Consider your business size, specialty, location, and practices to help guide towards the best PEO fit for your business.
- Further, you will want to consider the level of involvement you would like your PEO to have. Should your PEO handle Human Resources administration and payroll? Should the PEO handle compliance and legal issues? Do you need the PEO to handle talent management? Once you answer these basic questions, you will be more prepared to review plans.
- Review the PEO.
There are a few things you will want to review before you sign with a PEO. Industry leaders suggest you investigate the technology and ensure your employees enjoy the interface. Next, you will want to ask about current and previous user experiences. Ensure the customer support is accessible, helpful and available for your employees. Finally, review accreditations and services history.
7. Pricing Structures. There are two main pricing structures PEOs use for small businesses. These two include: percentages of total monthly payroll and fees per-employee. The costs within these structures varies.
Under the first structure, percentages of total monthly payroll, on average you can expect to effect 3% to 12% of your monthly payroll.
Under the second structure, fees per-employee, you can expect the average will range from $40 to $160 per person.
These numbers will vary depending on your individual factors and may be higher or lower. Always be on alert for additional fees. Before you sign on the dotted line, request an itemized, detailed, list of all pricing, costs, fees and penalties.
Talk to an Expert
You now have all of the basic information you need to take your next step, and that is to speak with one of our experts to learn more about the PEO you need. We know this is a daunting task, and it is very likely you still have questions. We do not expect you to take on this research and make this decision alone. We are here to partner with you.
When you decide to partner with AEIS on your PEO decision, you will have an advocate who holds your best interest in mind. Our job is to help you take the right steps which will have your business thriving like never before. Now that you know a PEO is right for you, we invite you to take advantage of special pricing available only through our exclusive channel partnerships.
PEOs will take on the daunting administrative tasks that steal your joy, so click here to take the first step toward your peace of mind.
How can you know which PEO is best for your company?
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