We’re willing to bet that most business leaders never aspired to be knee-deep in employee administration, increasing government regulations, and company taxes. Yet many who had once envisioned themselves spearheading business initiatives and inspiring team members find instead that they are wading in the nitty gritty details inherent to every organization.
Even if you have dedicated staff members for some of these functions, it can be just as difficult to keep-up with evolving employment, tax and healthcare laws while keeping the big picture of your organization in mind. That’s when it becomes extremely valuable to consider partnering with a Professional Employer Organization (PEO).
A PEO establishes a co-employer relationship, which essentially takes over the responsibility of all employee administration duties, including HR, payroll, benefits, compliance, and more. This scenario helps business leaders get back to what they do best while also protecting the company from any liability issues. But how will you decide on the best PEO partner for your organization?
Choosing a PEO partner might be one of the most sensitive vendor relationships your company gets involved with. After all, they will be managing all your employees’ confidential information, from Social Security numbers and birth dates to salary information and beneficiary data. So it goes without saying you need someone you can trust.
Getting background info on a PEO is your first step. Ask questions about their financial management; their finances should be audited by an independent CPA. Additionally, their risk management, operational, and ethical practices should be certified and licensed as required by state PEO licensing and registration laws.
Beyond these official points of background checking, you should ask questions about the experience, expertise, and qualifications of their staff members. Find out about their ratio of corporate employees to client employees. These questions will reveal how qualified they are to meet the individual needs of your company and its employees.
Excellent qualifications are one thing, but will you actually be able to get a hold of your PEO account rep when you need them? Communication and customer service are vital to a successful relationship. As a business, you need complete assurance that your HR functions will run smoothly and that your employees will be treated with respect, so be sure to drill into the details about their customer service.
Both your and your employees’ questions and concerns should be answered promptly. Find out the primary tool of communication – phone or email? How many hours will your main contact be available, and what happens in the case of an emergency? How many other clients will your point of contact be juggling? At Synergy, we provide a dedicated on-site HR specialist so our clients know they have our full commitment and focus.
Employee administration is a necessary evil of running a business. It’s extremely time consuming and needs to be highly accurate with no room for human error. This is especially true when it comes to payroll. Since a PEO partner will be handling all payroll processes, you need to ensure they can meet your needs with exact accuracy.
Find out the logistics of the process – how will employees submit payroll? How often will they be paid? How can they access their paycheck information and W2s? The best PEOs will have secure, user-friendly online portals through which this information is handled. Make sure that their services can handle the specific requirements of your company, including size, location, and industry.
Benefits are a key differentiator as an employer, vital for both attracting and retaining top talent. With this in mind, make sure to get all the details on what their benefits offerings are. Do their options fit the unique needs of your employees, and are those plans customizable?
Find out if you’ll have access to multiple insurance carriers and networks – especially if they are state-specific and your organization has locations in more than one state. Who is their third party benefits administrator, and how are their benefit liabilities funded? All of these factors will help you discern how reliable and proactive they will be in serving your company.
The final consideration that will provide insight into a PEO’s suitability is their track record of success. This includes a generous balance between real life case studies or testimonials and data such as the organization’s customer retention rates. Also ask if they are able to provide customer references.
Ultimately, considering a PEO partner to outsource your HR functions depends upon your unique employee and organizational needs. The best Professional Employer Organizations will work with you carefully to determine exactly how they can fulfill your requirements. Got questions? Contact us today.