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9 Important Questions You Should Ask Before Hiring a PEO

Updated: Jun 27, 2023

9 Important Questions You Should Ask Before Hiring a PEO
9 Important Questions You Should Ask Before Hiring a PEO

Hiring a Professional Employer Organization (PEO) can be a game-changing decision for any business owner, especially those who are seeking to streamline their HR management process. A PEO can provide a wide range of HR services, from payroll and benefits administration to compliance and employee relations.

However, not all PEOs are created equal, and choosing the wrong one can be a costly mistake. To make sure you select the right PEO for your business, there are several key questions you should ask before signing on the dotted line. Here are the top questions you should ask when hiring a PEO to ensure you make the best decision for your business.

1. What services can I expect?

When you engage a PEO, they act as an integral part of your business. As the official employer of your workforce, it's the responsibility of the PEO to respond to queries related to employment matters from both you and your employees. It's important to identify the individual(s) who will manage your account on a day-to-day basis to know whether you'll have an allocated HR advisor, access to an employee benefits expert, and who your staff should contact if they require assistance reprinting their W-2 forms.

While these questions may not appear significant during the PEO selection process, understanding how your interaction with the PEO works can have a significant influence on the future success of your partnership.

2. What is your pricing structure?

PEOs typically charge a fee based on a percentage of your payroll or a per-employee fee. However, the pricing structure can vary significantly from one PEO to another. So it's important to get a detailed breakdown of the costs and understand what is included in the fee. It's also essential to ask about any additional fees or hidden costs that may arise.

3. What experience do you have working with businesses like mine?

Some PEOs specialize in serving specific industries, such as healthcare, construction, or technology. These PEOs may have a deeper understanding of the unique challenges and compliance requirements that businesses in those industries face. So, when hiring a PEO, it is important to choose one that has experience working with businesses in your industry and of your size. This ensures that they understand the unique challenges and regulations that apply to your business.

4. What level of customer support do you provide?

Make sure you understand the level of customer support a PEO provides. Will you have a dedicated account manager? Will you have access to a support team 24/7? Knowing the level of support available can help you make an informed decision.

5. How do you ensure compliance with employment laws and regulations?

PEOs are responsible for ensuring compliance with employment laws and regulations. But unless you hire a certified PEO, the responsibility for strict compliance also falls on you. So it's important to choose a PEO that takes this responsibility seriously. Better still, make sure you're partnering with a certified professional employer organization. Ask about their compliance processes and whether they have any certifications or accreditations.

6. What employee benefits do you offer?

In today's job market, top talent seeks more than just a salary. They look for comprehensive employee benefits packages with competitive rates, including high-quality health insurance options, attractive savings plans, corporate wellness programs, life insurance, and more. Before selecting a PEO, it is important to inquire about their partnerships with carriers and the types of plans they offer to ensure that you can create a benefits package that aligns with your employees' needs, expectations, and lifestyles.

7. How do you ensure the security and privacy of client data?

PEOs handle sensitive information, such as employee data and financial information. It's important to ask the PEO about their data security practices and what measures they have in place to protect your data from unauthorized access or theft. This may include encryption, firewalls, secure servers, and employee training on data security best practices.

8. What kind of reporting and analytics do you provide?

A good PEO should provide you with detailed reporting and analytics to help you make informed decisions about your HR management and compliance. This may include reports on employee turnover, benefits utilization, payroll costs, and regulatory compliance. Understanding what kind of reporting and analytics a PEO provides can help you make a better choice when choosing a PEO partner to manage your HR and compliance functions.

9. What is your company's reputation?

You should conduct thorough research and gain a clear understanding of the organization you are considering hiring as your PEO. Determine their longevity in the industry, client feedback, and market presence. Whether you are evaluating a national or local PEO, it is essential to ensure they are a reliable business. Request audited financial statements, inquire about federal, state, and local licenses and awards, and investigate any accreditations they have received.

Wrapping Up

Every business decision you take should be fully backed by in-depth research to understand how it will affect your business and employees. The decision to hire a PEO is no different. By inquiring about their reputation, services, benefits plans, compliance practices, and technology solutions, you can ensure that you select a PEO that aligns with your business needs and goals. With the right PEO partner, you can reduce your administrative burdens, attract top talent, improve employee satisfaction, and ultimately, drive your business to greater heights of success.

The Mission offers more growth services and solutions for fast and efficient business growth. With our extensive experience and valuable insights, we are equipped to address all of your HR and outsourcing concerns. Please feel free to contact us today to learn more about how services can help your company grow.


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