7 Important Questions to Ask a PEO

Asking some important questions during the PEO selection process can help narrow down your options.

Once you’ve decided to hire a Professional Employer Organization, the next step is to select which PEO you’d like to work with. Chances are a lot of great firms will be more than happy to do business with you. Not all of them are going to be the right fit for your employees and/or company.

Asking a few important questions during the selection process can help narrow down your options. As you consider inquiries that are specific to your industry, here are a few ideas to get you started:

“What services does your firm offer?”
First things first. If you want to hire a PEO, we can bet there are some specific aspects of running your business that have caused your search for outside help.

Whether it’s payroll, employee training, compliance with the Affordable Care Act (ACA) and other regulations—or something else entirely—you’ll need to verify that the PEO you’re considering actually offers assistance in this department.

If they cannot meet your needs, then don’t hire them. Remember: just because a certain PEO has a stellar reputation and overall seems like a great group of people doesn’t simply mean that it’s a perfect fit for your company.

“How do you determine the amount that you bill your clients?”
Some PEOs charge based on a percentage of your payroll, while others do a flat-rate per employee that they’ll oversee.

Make sure to take this into account when comparing quotes from different PEOs. It will help you avoid any nasty surprises in the near future.

A good strategy is to request a line-item breakdown for the estimate they’ve given you, which will help provide a better idea of what exactly they’re planning to charge you for.

If the PEO won’t break down the cost of individual services or seems reluctant to answer these questions, walk away. In any hiring situation, this is a red flag. The PEO industry is absolutely no different.

“What benefits can you offer my employees?”
Competitive benefit packages are extremely enticing to potential and existing employees; they can help you win over new hires and encourage your current workers to stick around.

For this reason, it’s always important to ask what a PEO can do for your staff. Training programs, insurance options, and retirement and savings plans are all significant from a human resources standpoint. On-site safety checks and disability insurance—both long-term and short-term—can reassure your employees that you care about their well-being.

Overall, PEOs should help you to ensure your business is a great place to work.

“How often can I expect to see or hear from you?”
Exactly how hands-on a PEO needs to be with your business is a matter of personal preference.

You may want a representative from the company to stop by your business’ headquarters once or twice a week so that they’re frequently available to you and your employees. You may just want to send them an email or call as specific issues arise. Or you may want a level of involvement that falls somewhere in the middle.

Check whether the PEO offers a plan that seems reasonable to you, and ask if—or how often—this arrangement can be changed to tailor your business’ needs.

“Can the payroll process can be done online? Will my employees be able to access information about their paychecks and benefits online?”
Many people—especially younger employees—love having the ability to look up information about their checks and benefit packages online.

This option tends to be much more convenient than having to make a phone call or speak to someone in person. Because the process is paperless, it’s faster and eco-friendly, too.

If a PEO doesn’t offer online payroll services, be sure to ask how they will allow your employees to view pay stubs or benefits information. In short, a PEO not offering these services may not necessarily be a deal-breaker for you or your staff, but it’s definitely something to be mindful of when comparing different firms.

“What kind of accreditations does your firm have?”
There are several groups that certify or accredit PEOs, and any reputable PEO will be more than happy to show off its qualifications.

Certifications from ESAC (Employer Services Assurance Corporation), CEFEX (Centre for Fiduciary Excellence), and/or CI (Certification Institute) are all good signs, as well as membership in the NAPEO (National Association of Professional Employer Organizations). Don’t hesitate to ask for proof of these accreditations or verify with a specific certification group that the PEO really is a current member.

It is also worth mentioning that, in addition to the awards and accolades that a PEO company can earn, there are certifications that PEO staff members—as individuals—can earn.

A PHR (Professional in Human Resources) and SHRM-CP (Society for Human Resource Management-Certified Professional) refer to excellence and expertise in the field of human resources. CPP (Certified Payroll Professional) and FPC (Fundamental Payroll Certification) are accreditations for payroll workers.

At the end of the day, you’ll want both your payroll and human resources departments to be in experienced, well-trained, and competent hands. If a person has put forth the time and effort to earn these certifications, they’re dedicated to taking their work seriously.

“What kind of feedback have you received from previous clients?”
This is another helpful question to ask in any hiring situation. If the PEO seems cagey about answering, you’ll probably want to take your business elsewhere.

The firm will likely have a section on their website with client testimonials, but be sure to run a web search for “[Name of company] PEO reviews” to learn more information.

Consumer Affairs and the Better Business Bureau are also valuable resources. Keep in mind that a specific PEO having one bit of negative feedback, or the occasional bad review in a sea of positive ones, shouldn’t necessarily sound the alarm. Alternatively, a PEO which consistently receives bad reviews is most likely not all that trustworthy.

Just as you—hopefully—wouldn’t leave your child in the care of someone unreliable, you wouldn’t want to do business with an unreliable Professional Employer Organization.

Partnering up with a PEO that isn’t the right fit may lead to confusion and headaches down the road. Hiring a dishonest or disreputable PEO can drag your company down like a lead weight.

Avoid all of this by doing thorough research and asking the right questions before you sign any contracts. A great PEO will want your business and employees to succeed and thrive just as much as you do—and they’ll offer the right skills and options to make growth and harmony possible.