Is Switching PEOs Worth the Trouble?

When you first partner with a Professional Employer Organization (PEO), everything is rosy. You're in the honeymoon stage. But after some time, maybe you realize they aren't giving you the support you expected or need. Considering whether to switch to a new PEO is telling in and of itself—if you're thinking about it, it's probably the right time. 

Switching to a new PEO is like moving to a new, bigger, and better home in a pleasant neighborhood. Initially, there's some effort involved to find the right place and prepare for the transition, but once you're there, you will see that it was worth all the effort. 

Knowing which PEO to switch to will be a big decision. Ultimately, you need a new PEO that offers you advantages over your existing provider. 

Why switch PEOs? 

There are many reasons why small businesses consider switching to a new PEO. Most often, it comes from a lack of support. You may have been sold on having exceptional support and getting the services your business needs. In reality, maybe you can't reach your support team when you need them, and you can't rely on them to provide additional services as your company needs to change. 

Stable Medical Renewal Rates 

Nearly every year, businesses across the country see their medical insurance rates increase. Many times, this increase takes your breath away. It is not uncommon to see health insurance rates increase between 10% and 60% year over year. 

It may be worth moving to a new PEO with renewal rates that are more in your price point. Many PEOs can secure renewal rates in the single digits, making a transition much more palatable. 

Dedicated Service Team 

Some national PEOs sell you their services and then leave you out to dry. Your PEO should see you as more than just another number. They should understand your company's needs and your goals to help you achieve them. 

The best way to do that is by having a dedicated service team. When you call about a specific issue or question, your team knows you, knows your employees, and knows how to help you quickly and efficiently. With many PEOs, they outsource to a call center, so not only do you have to speak with someone new each time, they may not even be qualified to give you an accurate answer. 

Multistate Capabilities 

Many PEOs operate in specific states or regions of the U.S. This means they are limited in their abilities to help your company grow. When it comes to expanding and hiring employees in a new state, they may not be able to support you. 

It's important for your company to be able to grow into new markets. While you may only hire remote employees and not open a new physical location, a PEO that only operates in a limited area cannot help you. To justify the costs of a PEO, you need one that provides you with comprehensive services, and that includes expanding and supporting you in new states. 

Customizable Reporting 

You cannot run your business blindly. If you don't have accurate and timely reporting, you don't have a clear picture of what's happening. 

Transitioning to a new PEO may give you better insight. Find a PEO that integrates state-of-the-art HR technology that includes payroll, benefits, and other HR reporting. 

Flexibility 

A PEO should be flexible with your company. As you grow, your needs will inevitably change and if your PEO cannot change with you, it's time to look elsewhere. 

If you like your current benefits plan, for example, your PEO should be willing to work with your current provider to help you join. But with the right PEO, you may not even want to stay with your current provider because the PEO's health benefits master plan will be much better in terms of service and price than what you could get on your own. Ultimately, only paying for what you need is vital to picking the right PEO. 

Available Expertise 

Choose a PEO that staffs HR experts. The right PEO will add value and give your company HR best practices that will improve your business, helping you grow and thrive. 

The experts staffed at the PEO should be able to help with:  

• Performance improvement plans 
• Improving workplace safety 
• Navigating complex HR issues 
• Attracting and retaining top talent 
• Dealing with difficult employees and conversations 

Selective 

Too many PEOs are focused on getting new clients and not supporting the clients they already have. Run away from these types of PEOs. 

 A best-in-class PEO carefully chooses who they work with to maximize their cost savings. The right PEO can help you save in many areas, including: 

• Health insurance 
• Workers' compensation 
• Unemployment insurance 
• Unemployment claims management 
• Helping to manage your costs over time 

Is it time to switch PEOs? 

In the same way that you would only move to a new home if it had tangible benefits, you should only switch PEOs if it leads to better services and support for your company. To figure out if your business should change PEOs, check out our free webinar "Is It Time to Break Up: Are You and Your Current PEO Compatible?"