The Problem with Giant PEOs

When you have decided that HR outsourcing is right for your company, you will inevitably come across an option called a Professional Employer Organization (PEO). A PEO is an HR outsourcing partner that can provide you with comprehensive HR support and services, but only if you find the right one that meets your needs.   

Choosing a PEO is a complex decision. You may even be tempted to look at the largest PEOs, probably the same ones you see spending ad money when you search for HR outsourcing options.   

The truth is that the largest PEOs are the ones most focused on cutting costs. They're spending money on those ads, and clients pay for those ads. Large PEOs have to cut costs somewhere and that usually ends up being at the expense of customer services and support. 

How Giant PEOs Cut Corners 

There are countless ways in which giant PEOs can cut corners. Most of these cost-cutting measures come at the expense of the PEO's clients. Here are three of the biggest cost-cutting techniques giant PEOs often use. 

Off-Shore Call Center 

Part of your reason for looking to an HR outsourcing company is to get HR-related guidance. HR and employment laws can be intricate and extremely confusing. Having an expert you can rely on who knows your business and the relevant national and local laws can prove invaluable.   

However, giant PEOs often outsource this service to a call center. When you have complex benefits questions, for example, you need to speak with a benefits expert. But giant PEOs may off-shore your call to a call center representative who doesn't know your company or the relevant laws. Often, these representatives can only provide you with pre-scripted answers that do not really address your specific question.  

When you choose a PEO that's not so large, you can expect more personalized service. You will get access to a team of HR experts who answer your questions when you call, and they get to know you, your employees, and your business goals. This allows them to provide you with specific answers unique to your business needs. 

One-Size-Fits-All Benefits 

PEOs can also provide you with access to benefits and benefits administration. One of the best ways to attract and retain top talent in your industry is to have a stellar benefits package. But this requires knowing your employees' needs and giving them options for healthcare that meet those needs. 

The largest PEOs have honed their benefits package into one that is most profitable for them, not the one that is best for you and your team. They may try to push their one-size-fits-all package onto you, regardless of whether it applies well to your company. 

The right PEO for your business, however, will give you options. Some may include high deductible health plans (HDHP), flexible spending accounts (FSA), and health savings accounts (HSA). Your employees will appreciate these options where they can choose the best health coverage for them. The right PEO can help you get the benefits your employees want at costs you can afford.  

Impersonal 

Giant PEOs treat you like a number on a spreadsheet, not a company with unique employees and distinctive goals. With a large PEO, you won't have access to a dedicated team that can help ensure your business's success.  

Your PEO needs to be a trusted partner. If your HR outsourcing provider does not get to know you, your employees, or your business needs, they cannot possibly serve you well. Your PEO should provide you with ample support and guidance to help you meet your needs. 

The Right PEO for You 

The right PEO for you has experts standing by for your most complex questions. These HR experts will get to know your business needs and goals so that they can support you on your path to success. Without clear and truthful guidance, your business may be led astray. Without a trusted and dedicated team of experts to help you, you cannot trust the information you get is accurate. 

The right PEO will also tailor their benefits package to meet your unique business needs. One-size-fits-all benefits packages don't work because every business has different employees who have distinct needs. The right PEO will give you access to a dedicated team who can help you choose the right plans for your business and your employees. They will also guide your employees in choosing the right plan for them. This dedicated and personalized service is not something you would ever get from a giant PEO.