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How to Tell if a PEO is Right for Your Business

Updated: Oct 15, 2021


How to Tell if a PEO is Right for Your Business
How to Tell if a PEO is Right for Your Business

Let’s assume that you've just started your business, or perhaps, you’ve been operating a small or mid-sized business for years. Now, you have many moving parts to deal with, and you barely have enough time to allocate to all the areas of your business that need attention. The most sensible thing to do is to hire talented people to take some things off your shoulders.


This will allow you to focus on other, more critical areas of your business. However, hiring talents and managing all the many aspects of human resources can equally be overwhelming. Gosh! Just when you thought you had more freedom to do other important things, you now also have to deal with people. Well, there are liabilities that come with hiring talents or running an HR team.


But the good news is that you don’t have to go the stretch alone. At this point — being a small business owner — it makes perfect sense to partner with a professional employer organization (PEO). A PEO can save you so much trouble. The right PEO will take over every day-to-day HR activity, as well as all benefits, compensation, and compliance-related issues that HR departments often encounter. Deciding whether a PEO is right for your business can be a bit tricky. So in this article, I’ll highlight some key pointers that can help you tell if a PEO is right for your business.


Is Your Business Capable of Handling HR-related Emergencies?


Often, in-between the day-to-day running of your business, several HR-related issues will spring up on you unexpectedly. It could be lawsuits, difficult employees, wrong tax filings, compliance with state or federal statutes, or other serious HR matters. Even HR professionals find it hard to deal with some of these issues. To make matters worse, you could be in the middle of something very important at the same time.


You obviously cannot split yourself in two when things like this happen, so it’s a good way to tell if a PEO is right for your business. The PEO will enter into a co-employment agreement with you. This means that they will take most of these liabilities off you. Your responsibility will be to provide employment and a workplace for the employee, while the PEO manages the employees and all issues that may arise with your employees. Sweet, right? This way, you get to focus on the most important business activities. After all, that’s why you’re in business. Click here to learn more about PEOs.


Do You Have the Resources to Run a Fully-Functional HR Department?


Make no mistake, running a full in-house HR team costs money. From offering a competitive employee benefits plan to managing payroll, workers’ compensation insurance, attendance, and time tracking, and purchasing the technology and HR expertise necessary to drive all these processes, you can expect to spend a considerable amount.


So can your small business afford that yet? Did you know that a PEO is a solution that allows most SMBs to afford large-company HR services? Yes, you can afford a complete array of all HR functions with a co-employment arrangement for a reasonable price.


Do You Have the Time to Manage Your Own HR Team?


You probably started your business to make money, which is only possible by acquiring new clients and converting more customers. HR is a serious undertaking, even for professionals. Managing employees, ensuring HR best practices, dealing with paperwork, ensuring compliance with rules and regulations, filing taxes, dealing with employee issues, and building a robust employer-employee relationship, and providing benefits and perks are just way too many for a small business to manage.


These are time-consuming tasks that may impede your business progress if not well managed. Even if you work around the clock, you’ll be struggling to catch your breath most of the time. As your business grows, having a PEO to lean on for these tasks is priceless. A PEO will provide you all the support you need to manage all the moving parts of your HR responsibilities. You will get help to manage emergencies and compliance issues. Some PEOs can also offer you a team of HR professionals specialized in your industry to provide you with HR support that fits your industry needs.


Can You Handle the Paperwork?


I guess you're probably wondering if this is even an issue. Paperwork begins the moment you start bringing in talents, and the more talents you have on your team, the more paperwork you can expect to handle. From recruitment forms and W2 forms to time and attendance tracking and tax filings, you can expect to have lots of paperwork on your hands.


Besides, you may not even know how to handle them. With a PEO, you will be able to focus on core business processes while the PEO provides the right technology to help you manage your day-to-day HR duties, including payroll, benefits, and tax filing.


Are You Competing with Big Companies for Talent?


Consider whether you are competing with larger or bigger organizations for talents. If so, you probably will not be able to measure up in terms of benefits, compensation, resources, etc. Large firms have resources and perks that help them attract talents with less effort than SMBs. This is what you enjoy when you partner with a PEO. They have the resources and technology to offer your business a comprehensive HR and employee management package at a price that’s difficult to resist.


Can I Find a PEO Service Provider That I Can Trust?


Yes, you can. There are many providers in the industry today. However, not all of them are exactly reliable. You want to be sure that the company is a certified professional employer organization (CPEO). The National Association of Professional Employer Organizations (NAPEO) is another accreditation organization that you can check with. Working with a certified PEO company shields you from errors and liabilities that may arise due to the negligence, actions, or inactions of the PEO. Besides that, you’ll have access to a fuller range of benefits.


At Mission HR, we do not only offer businesses the services and solutions they need to scale their business quickly and efficiently. We also bring our years of experience and rich insight to the table, providing your business with answers to all your bugging HR and outsourcing needs. Don't hesitate to contact us, if you have further questions about PEO or hiring employees in other locations.