A Professional Employer Organization helps small and mid-sized businesses streamline their processes, make employees more efficient, and offer better benefits at a reduced cost. However, not all PEOs are created equal. Every PEO can provide you with basic services, but not every PEO can give you the best benefits or the greatest cost savings.
To differentiate between a regular PEO and a PEO who can provide you with best-in-class services and support, grade them. Using this comprehensive test, you can determine if your current PEO offers stellar or subpar support. You should not settle for anything less than the best for your business and your employees.
Below are several questions covered in our “Grade Your PEO” scorecard. If you answer no to any of these questions, that is a clear sign that you are not receiving the support you deserve.
Many massive PEOs will work more like a call center rather than a support team. When you call in with a question, you may speak with a different person each time. These different individuals know nothing about your business, and there is no way that they could. They can only read a quick paragraph about what you do on your website. They may have no information about any past HR issues you have encountered. This is not helpful to you and can serve as a waste of your time as you are having to repeat yourself to every person that you speak with. The telephone game often ensues and in most cases you don't get the problem resolution that you would like.
The right PEO for your business will provide you with a dedicated team that you can develop a relationship with over time. They learn your business and build trust so that you can rely on them for complex HR solutions. In addition, this service team is there to guide you through any problems that might arise and they will help to make sure that a solution is reached. When evaluating a PEO, it is absolutely fair for you to ask if you will get a dedicated support team or person. If you do not receive that level of support, it might be best to look elsewhere.
Along with a dedicated support team from your PEO will come a relationship that helps you feel comfortable with the services you receive. In doing so, you can feel that your PEO cares about your employees and your business.
Your PEO supports you by answering the phone when you call and providing you with accurate and timely answers. But if you have to leave a message or if you can only speak with your PEO via chat, that is a sign that the PEO may only care about your business for revenue purposes. The right PEO will want to see your business succeed and will show that by providing you best-in-class support, answering the phone when you call, corresponding with you in a timely manner, and giving you correct answers to complex HR questions.
One of the offerings of a PEO is retirement services. Through a comprehensive benefits plan which includes 401(k) options, your PEO can provide your company with a Fortune 500 benefits plan at a lower cost than would otherwise be possible.
More employees today say a benefits package can become a determining factor for whether they accept a job with a company. If your PEO does not offer any 401(k) options, you may miss out on attracting and retaining top talent in your industry. Providing employees with a 401(k) can show your employees you care about them and their future.
Not all PEOs are created equal. Some receive certification from the IRS. These are Certified Professional Employer Organizations (CPEO). While the certification is entirely voluntary, it provides a CPEO with a level of credibility and standing that regular PEOs may not have.
When you partner with a CPEO, you can gain access to expanded offerings, including:
Certification provides clients like you peace of mind that your chosen PEO has their act together. They are a professional company that will offer you top-notch services and support.
Getting the support you deserve from your PEO should be easy. But not all PEOs will provide best-in-class services and support. Instead, they may see your company and your employees as nothing more than a number. When they do, you will definitely feel that way.
But you and your employees deserve better. If you answered no to any of the above questions or even hesitated before answering yes, take a look at the "Grade Your PEO" scorecard. Using this grading system, you can get an objective view about whether your PEO is providing you with the services you and your employees can rely on.
The IRS does not endorse any particular certified professional employer organization. For more information on certified professional employer organizations, go to www.irs.gov.
Wendy Katz is the Chief Financial Officer at Questco Companies. Wendy is aiding our clients’ drive for profitability and compliance by providing pragmatic insights and sound financial solutions to constantly evolving HR challenges.