Whenever you are looking for a new business partner, weigh all the possible pros and cons to make sure that they are making a perfect decision. Just like that, when a new technology is being introduced into your organization, you need to check whether it can fulfill the needs of your company or not.
PEO (Professional Employer Organization) is a booming term and technology that has been circling around the corporate world more than ever. So, what exactly is PEO? Why do companies require its services, and what factors should be kept in mind while choosing PEO services for your company? Is PEO payroll beneficial? All this and more will be discussed in this article.
So, without any further ados, let’s begin discussing.
What is PEO?
A PEO is majorly referred to as a co-employer. This means that there is a shared responsibility for the risk of employment. The PEO will take on the risk and responsibility for the employee for things like taxes, payroll, benefits according to the state laws, etc. From hiring to firing and everything in between, PEO ensures that all aspects are covered.
Choosing The Best PEO Services For Your Business
Finding best PEO providers that can understand your business needs and fit in well is challenging. Once you have introduced a viable PEO system into your organization, it will have long-term implications that will pave the way for your business’s future. Here is a checklist of all the things that you should consider while choosing to hire the best PEO providers for your business:
Create a Checklist of Your Organizations Needs
Every organization has distinguished needs and goals. If one PEO organization has worked well for one organization, it does not mean it will produce equivalent results for you, too. For example, your business is on the lookout for remote employees. You will require a top-notch technology that can measure their performance and make it their priority to keep a check on this very aspect. Thus, you will require PEO service providers who are well-versed in handling such tasks.
Go Over an Overall Comparison
Picking up the wrong PEO for startup or any big organization could lead to unnecessary expenses and also bring in several additional bumps in your finances. Let’s understand this point with an example:
Suppose you don’t have an HR manager, and in the future, too, you don’t plan on hiring one. But every year, you are shedding thousands of dollars in employment attorney fees for all the HR-related items. To tackle such scenarios, you will require the assistance of PEO professionals. Just because you have a small team right now does not mean you have to stop preparing for the future.
So, draw comparisons on both in-house HR and PEO to see which one is more reliable for you presently and in the future.
Ask For Professional & Client References
The best way to evaluate the performance of the best PEO companies is by seeking references from people who have already taken their help. This gives a fresh perspective on the company you will be partnering with in the future. Reach out to their previous clients and also get in touch with the industry experts. Make sure to consider their feedback while making a choice.
Is Your PEO Company a member of the NAPEO
If the PEO company you are planning to choose is a member of NAPEO (National Trade Association), it is a positive indicator. NAPEO is basically the voice of the vast PEO industry. They aim to help PEO companies grow by providing a range of services, from regulatory compliance assistance to payroll and other HR services. All those companies who are part of NAPEO showcase their commitment towards the industry standard and best practices.
Before hopping onto the bandwagon of hiring the best PEO service company, consider the pricing factor. Each company that provides PEO services offers different billing methods. There are some that calculate the fees as a percentage of the payroll, whereas few others have opted for a flat fee structure. Due to fluctuations in the bonuses and commissions, the whole outlay of your company may get disturbed if your PEO company follows the percentage payroll method.
On the other hand, in the flat rate method, an increase of per-employee admin cost each year can make the cost-effective PEO solution burdensome in a few years. Therefore, getting a complete list of all the money you would pour into introducing PEO into your company should be looked into properly.
Who Should Consider Choosing the Best PEO Providers for Business?
Now, when you are done choosing the best PEO providers, the next thing is to decide who should be involved in choosing the appropriate firm. It’s best to have at least two experienced people on board who belong to different departments. This way, two different perspectives will come together, and hopefully, a well-reputed firm will be chosen to take over the task.