Questions To Ask A PEO

When looking to outsource HR, payroll, and other administrative aspects of managing staff, partnering with a Professional Employer Organization (PEO) is a popular option.

Asking the right questions when evaluating PEOs is crucial for finding the best fit to meet your business needs.

This guide covers key considerations, interview questions to ask a PEO, including pricing inquiries, service offerings, implementation plans, and other essential discussions points when choosing a PEO.

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Company Background Questions

How long have you been in business?

More experienced PEOs typically offer greater resources and expertise. Look for 5+ years in business as a positive indicator.

Are you licensed and insured to operate as a PEO?

Confirm proper business licensure and insurance coverage like workers’ compensation policies. Review licenses directly on your state’s website.

Can you provide client references?

Reaching out to current and past clients gives great insights on their working relationship, services, and overall recommendation.

How many clients do you currently serve?

Higher total clients indicates an established operation. Just ensure your business will still receive quality attention.

Getting details on operations history, credentials, and client experiences provides a clear picture of the PEO's qualifications.

Services and Offerings

Which services are included in your PEO plans?

Compare core offerings like payroll, benefits administration, HR, compliance, workers’ comp, etc. Look for breadth of services you need.

Do you offer robust online portal access?

Convenient 24/7 access to paystubs, reporting, submission forms, and other tools boosts user experience.

How does your HR expertise support my business?

Discuss their advising on hiring, onboarding, training, performance management, terminations, and other key HR functions.

Can you customize service bundles?

Some PEOs allow selecting only the precise offerings your business needs rather than broad pre-set bundles. Customization ensures ideal services and value.

Understanding the full scope of their services and administration access empowers smart decision making.

Pricing and Contracts

What are your pricing models and associated fees?

PEOs commonly charge a base monthly per-employee rate plus additional fees. Get rate specifics in writing.

Are there minimum commitments or long-term contracts?

Some PEOs require minimum employee counts and 1+ year contracts. Know any obligations before signing.

What factors cause pricing to increase?

Be aware of elements that boost costs like health claims, compliance changes, or service expansions.

Do you offer pricing tiers based on employee count?

Larger PEO clients may get discounted rates. Inquire about tiered pricing models.

Transparency on billing models, contractual fine print, and potential cost changes allows financial planning.

Implementation Process

What is the transition process to onboard with your PEO?

A organized onboarding process signals experience successfully transitioning clients.

Who handles transferring current payroll and HR data to your systems?

Ideally, the PEO manages data transfers with minimal effort required from you.

How long does a typical client transition take?

Expect 1-2 months for full integration. Rush transitions may indicate disorganization.

Will we have implementation contacts assigned?

Dedicated reps who contact you regularly ease transitions and build important relationships.

Paying attention to changeover plans prevents disruptions when adopting PEO services.

Frequently Asked PEO Questions

Do you handle worker classification properly?

PEOs keep up with regulations on classifying workers as W-2 employees vs 1099 contractors. This avoids IRS penalties.

What payroll options do you offer?

Look for modern conveniences like direct deposit, same day pay, mobile apps, and integration with timekeeping software.

How does your workers’ comp coverage work?

PEOs provide their own policy so clients achieve rate reductions under a larger umbrella program.

Can we cancel anytime if dissatisfied?

Make sure no long-term contracts lock you in. There should be an option to cancel if expectations aren’t met.

Conclusion on Questions To Ask A PEO

Choosing the right PEO determines whether you offload burdensome administrative tasks successfully or end up with a poor fitting partnership. Asking intelligent, thorough questions gives the insights needed to select a top caliber PEO matched to your business needs. This paves the way for alleviating HR and payroll hassles so you can focus on growth.