8 Questions to Ask PEO Companies Before You Sign


Signing on with a PEO company could be the best choice you ever made for your small business. PEO providers like BenefitMall offer valuable services to companies looking to offload most of their HR functions without spending a small fortune. But as with any other kind of business in any other industry, not all PEO providers do things the same way.

PEO services can differ from one firm to the next. So can pricing structures, contract details, integrated technologies, and customer service. So how does a small business owner go about finding the right PEO?

The U.S. Chamber of Commerce recommends, among other things, shopping around. They recommend asking PEO companies the following 8 questions before reaching any kind of decision:

1. Has your organization been independently audited?

PEO companies looking to maintain the highest standards of professionalism and compliance go out of their way to be certified by accountants or accrediting institutions. These same companies are independently audited for that purpose. Results of such audits can be requested prior to signing a contract.

2. Can your organization support all my locations?

Employers with multiple locations will do better if they can find a single PEO capable of servicing all of them. This is tricky because jurisdictions handle PEOs differently. Finding one to service multiple locations can be challenging, especially if those locations exist in different states or countries.

3. How well do you understand my industry?

It is easy to think of HR functions as being pretty static regardless of industry. But things can differ from one industry to the next. For example, worker’s compensation is more complicated for some industries than others. So it is important that a PEO understands your industry in order to best serve you and your employees.

4. What types of benefits do you offer?

Given that PEO companies generally take over benefits administration, you’re going to want to know what types of benefits are on tap. There is no point in going with a PEO that doesn’t offer a benefits package your employees will appreciate.

5. How are employee benefits funded?

Hand-in-hand with the types of benefits offered are how those benefits are funded. In relation to health plans, you need to know if a PEO offers a fully insured or self-funded plan. Responsibilities and coverage vary between the two types.

6. How do you offer customer service?

Despite PEOs being co-employers, they do not send over their own people to establish offices on your premises. You are essentially a PEO’s client. So you need to know how they offer customer service. For example, is it available 24/7?

7. What types of technologies do you utilize?

The modern PEO environment is built on technology – cloud technology to be more specific. Ask about the technologies a PEO company uses and how your company will access them. Do not be afraid to request software demos before you sign.

8. What are your typical contract terms?

Although PEO contracts differ in the details, most PEO companies start with a base contract and go from there. Therefore, ask about contract terms. Ask how long contracts typically last and how renewals are addressed. The way a PEO company handles contracts can tell you a lot about how they do things across their entire business.

Although asking and getting answers to these eight questions will not direct you to the perfect PEO, they will give you a clear understanding of which ones are likely to be best for your company. Ask as many questions as you need to in order to make a wise decision.

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