Maybe you’re feeling the weight of juggling compliance and benefits questions on top of building successful, high-performing teams. Maybe you just want a partner who can join you in-person for the hard conversations that need to be had. A Professional Employer Organization (PEO) might be just the partner you need. The right PEO frees up your time and protects your business from compliance risk. Their team is available and present as partners and advisors. They give your team access to benefits they’d never get on their own. The wrong PEO trades one set of headaches for another. Cookie-cutter processes, slow response times, and pricing and contract confusion might end up becoming as burdensome as when you were trying to do HR yourself. People processes are core to how any business operates, and the trust you build with the team supporting your people is paramount. This guide gives you a buyer’s framework for evaluating PEOs. As you compare proposals, here’s what you can look for, and what you might want to ask along the way. How Does a PEO Operate? A PEO enters a co-employment arrangement with your business. They legally take on certain employer responsibilities such as paying employees properly, payroll tax administration, benefits sponsorship, and HR compliance. READ MORE: What is a PEO, Really? Clearing Up the Co-Employment Confusion Working with a PEO amplifies how you operate. Day-to-day HR processes are handled, updates throughout the year around benefits or compliance changes are managed with your team, and you have a strategic partner to help with the larger decisions that shape how HR works in your business. Meanwhile, your leadership team keeps full control of employment decisions and day-to-day operations. This arrangement gives small and mid-sized businesses access to resources that are usually reserved for much larger companies. Think of large-group benefits like multi-employer healthcare and retirement plans, expert HR support, and technology that centralizes information and processes. But not all PEOs are built the same. Know Your Business Before You Evaluate a PEO The strongest evaluations start before a single vendor call. When you’re clear on your internal processes and your operations, you’ll be better prepared to evaluate how an external partner like a PEO can provide support. Do you have employees in multiple states, or specialized payroll needs like certified payroll or job costing? Where does your team currently go to for information related to HR processes? What tools do they have? Is the PEO supporting internal HR staff, or would they be handling HR service delivery entirely? Is your workforce primarily on-site, hybrid, or remote? Will your team need on-site HR support from an external partner? A PEO that’s a great fit for one business can be the wrong fit for another. Knowing your own answers first keeps the conversation focused on your business, not their pitch. Evaluating PEO Services and What’s Actually Included A strong PEO delivers across a few core areas: HR, payroll, benefits, and compliance, plus the technology to manage it all. The depth of service within each area is where the real differences show up. HR Support Ask whether “HR support” means a call center or a dedicated HR professional. Do you have a team who knows your business, answers your calls, and brings real value to the relationship? Working with a PEO should add more to your business than just a consultant to call with questions. You’re adding a new extension of your team, with a wide range of high-level HR professionals to join you in the work. Strong HR support from your PEO should include a few key items. You will want to dig into a few key areas to really understand the level of support you’ll get from the PEO. Make sure to ask about: A named HR Business Partner assigned to your account On-site support from your PEO team for the work that requires it Compliance guidance across state and federal regulations Employee relations support (terminations, investigations, performance plans) Informed professional guidance when a legal HR response is required Interactive training and development led by HR experts Payroll Payroll should be accurate, flexible, and simple to manage. A strong PEO will help you manage the intricacies of calculating and processing each payroll cycle. By managing the process and technology around payroll, and addressing issues when they arise, you’ll feel more at peace knowing a core part of HR operations is handled with care. Here are a few questions to ask when it comes to payroll support from a PEO: How do they handle requirements unique to your business (i.e. shift differentials, multi-state payrolls)? Who’s running your payroll each cycle? Is it a dedicated person or always someone different? Are you explaining your setup to a different representative each week? Does reporting connect to your accounting software? Is there dedicated support off-cycle if and when your team needs it? Does the PEO’s technology tool support your needs, including reporting, time tracking, payroll submission and management? Benefits One of the strongest reasons to consider a PEO is the ability to access different employee benefits plans at a cost your business couldn’t reach on its own. A PEO offers plan options, preferred pricing, and more competitive rates than many businesses would find on their own. This is especially helpful for items like employee retirement plans, where a PEO absorbs the cost, the administrative work, and the risk that comes with managing the plan. It’s worth exploring a PEO to learn what options might be available to your business. A few questions in this area that you should ask: What medical, dental, and vision plan options are available? Can I build a combination of my own plan offerings and the PEO’s offerings? What does administration look like? Do my employees have resources to reach out to when they need it? Can your team come onsite to support employees during open enrollment? Labor Law Compliance How helpful would it be to have someone working beside your business, keeping tabs on legal changes that could affect your business in the near future? One of the great services a PEO will offer is labor law compliance assurance. An extra set of eyes can be helpful to any business owner. It makes an impact for the business when that partner can provide compliance advice tailored to your industry, to the size of your business, and where you operate. A few questions worth asking around labor law compliance while evaluating PEOs: Can you support my business across multiple states? What happens if I need to navigate an audit for compliance issues? How do you stay up-to-date as a team across federal, state, and local labor changes? Technology Technology can be a great asset to enable access to information and improve employees’ experience with HR processes. It can also create more (or new) headaches if it’s not easy to use. When you partner with a PEO, technology will be a key part of how they streamline and centralize HR information and processes. A great PEO will offer in-house technology support rather than redirecting you to a third-party technology partner. From prompt responses to technology issues when they come up, to integration support from a partner who closely understands your operations, the right tech support changes the game. You’ll want to look for these items in your PEO’s technology offering: A self-service employee portal with mobile access Electronic onboarding and benefits enrollment Reporting features that are easily accessible Customizable reporting, configuration, and integrations Modules for time and attendance, applicant tracking, onboarding, or performance management Desktop and mobile functionality to access your HR tool wherever you are What Separates a Great PEO from the Rest? Bringing a PEO into your business’s HR provides several tangible benefits. What sets any single PEO apart from another? The greatest advantage for any business is its people. Do you know the people your PEO employs, who you’ll be bringing into your business? Do you trust them to support a key function of your work? This is also why the work of HR is so important – to support your people and navigate the processes around employing them. When you choose a PEO to partner with, the people you work alongside are the greatest difference. It’s always worth asking in the sales process if you can visit the PEO team, see their office, get to know the people who would do the work before bringing them into your business. Strong relationships are critical to this work. Another easy way to get feedback on what it would be like to work with a certain PEO? Talk to their current customers. There’s no better place to hear about the work they do. A PEO becomes an extension of your team. You should know their people as well as you know your own employees. Choosing a PEO Should Be a Careful Decision What happens when you ask the right questions early? You make a confident assessment, your team and business get the support you need, and you keep moving forward. That’s what it looks like when HR becomes your competitive advantage. Employer Services Corporation has been helping Western New York businesses work through this decision for more than 30 years. We help business owners find predictability, support, and peace of mind through providing HR services. If you want a straight conversation about what to look for, contact our team today.