5 Key Factors to Consider When Selecting a PEO for Your Business
When choosing a PEO, it’s important to consider factors such as cost, scalability, services offered, and more. Make an informed decision with Justworks.
Keertana Anandraj is a part-time freelance writer and full-time sustainability analyst. Before Justworks, she began her freelance career writing for The Financial Diet and Career Contessa. She currently resides in New York City.
A Professional Employer Organization (PEO) is like the Swiss Army knife of business support – it offers a wide range of services to help streamline your HR, payroll, benefits, and other administrative tasks. But how do you select the perfect PEO for your business? We’re here to help you find out.
What is a PEO?
A PEO partners with your business to handle HR functions and employer responsibilities. It’s a managed service that allows businesses to outsource HR functions, such as payroll, benefits, and compliance. PEO services can be beneficial to businesses of all sizes, from small businesses to large corporations.
By outsourcing these functions to a PEO, businesses can save time and money, while also improving efficiency and compliance. In other words, a PEO takes the administrative weight off your shoulders, allowing you to focus on what you do best: growing your business.
Factors to Consider when Selecting a PEO
While most PEOs offer similar services, there are a few factors to keep in mind when selecting a PEO that truly works for your business.
Cost
Let’s just address the elephant in the room: PEO cost. Many small and medium-sized businesses might shy away from the idea of partnering with a PEO because of the perceived cost. But by outsourcing your HR and administrative tasks, you may be able to avoid the need to hire an entire HR team and invest in expensive HR software. Plus, you gain access to group buying power, which often means better rates on benefits and health insurance plans.
With some PEOs, employees get access to more than just healthcare (including vision and dental). With Justworks PEO, for example, they can also access wellness perks like One Medical and mental health resources like Talkspace, plus fitness memberships. For many businesses, like Frost Giant Studios, these types of benefits and wellness perks are crucial to acquiring the best people for their team.
“Most of the people we seek to recruit are already working for very big companies with glamorous benefits. They are used to a triple-A experience. We needed to match what those companies were offering in order to get the best talent… I shopped several companies and found Justworks to be the most competitive in terms of quality insurance with top brands at good rates.”
- Cara LaForge, Business & Operations Director, Frost Giant Studios
Being able to offer employees benefits and other perks at affordable rates is important. That said, it’s also important to consider the potential for additional costs, such as implementation fees or additional services. It can be helpful to look for a PEO with a transparent pricing model.
Scalability
In addition to cost, it’s important to determine if the PEO you’re considering can adapt and scale their services as your business grows and your HR needs evolve. No two businesses are exactly alike, which is why a one-size-fits-all approach simply won’t cut it. Knowing this, Justworks offers plan options to upgrade to as your organization scales. And for companies like Axios that wanted to be able to scale quickly, that’s the kind of PEO they were looking for.
“We weren’t certain how fast we would grow or quickly we would scale, but it became clear to keep it as a one-stop shop.”
- Kayla Brown, Chief of Staff, Axios
A good PEO will offer flexible pricing, service, and plans that can be customized to meet the changing needs of your business. With that in mind, the scalability of a PEO’s services should be taken into consideration in tandem with the cost.
Compliance
Navigating the labyrinth of employment laws and regulations can be overwhelming for any business owner. This is where a PEO can be a game-changer. They specialize in staying up-to-date with the ever-changing legal landscape to help your business remain compliant.
Simplifying compliance is crucial for any business, but especially those operating in multiple states, like Social Media Examiner.
“As a small business, non-compliance can be really expensive, so [Justworks] helps me stay compliant in multiple states where it’s very confusing… [Justworks] reduces your risk — state filings and unemployment insurance and workers’ comp, all of those things are taken care of for you.”
- Alex King, Controller, Social Media Examiner
Services
When it comes to services, though, it’s not just about compliance. PEOs offer a wide array of services beyond the legal stuff. Some can handle things like employee onboarding and training and performance management, while others provide assistance with employee relations issues. These resources can make a significant impact on your company’s efficiency and employee satisfaction.
Justworks PEO, for example, offers access to a free suite of online training, including sexual harassment prevention, as well as project tracking and invoice reports. For businesses like We Are Rosie, the quality of the diversity, equity & inclusion training available via the platform can be a big win for the team.
“It’s so well done — it’s a narrative, it’s a story, it’s engaging. It really allows you to think about things in different contexts, and touches on important topics like differences in identity, the power of privilege, and invisible disabilities. The flow of the training is great, and it’s so well thought out.”
- Tayla Esserman, Head of People Operations, We Are Rosie
Experience and Reputation
When it comes to choosing a PEO, experience matters. You want to partner with a PEO that has a proven track record of success in your industry. Do your research into the PEO’s history, customer reviews, and even ask for references from businesses similar to yours.
Additionally, ask the PEO for any certifications or accreditations that demonstrate their commitment to providing quality services. Justworks PEO, for instance, is IRS Certified and ESAC Accredited.
A solid reputation doesn’t just stem from experience, though. It also comes from delivering exceptional customer service. Ongoing support is essential, which is why Justworks PEO offers 24/7 customer support via phone, text, chat, email, and Slack.
“The quality of each interaction I have had with a member of the Justworks team is high. Justworks team members seem to be empowered, highly skilled, and are able to help customers with their needs from start to finish.”
- Anthony Vega, VP of Finance, Swoogo
Technology and Integrations
Technology plays a pivotal role in streamlining business operations. User-friendly HR software can make a world of difference in managing employee data, benefits enrollment, and payroll processing. Furthermore, integration capabilities are key. Your chosen PEO’s technology should seamlessly integrate with your existing systems. Justworks PEO, for example, integrates with Xero, QuickBooks, and QBO.
“Justworks frees me up to devote time to non-payroll tasks. Previously, I spent all of my time troubleshooting issues. Now, I get time back in my day to focus on business development.”
- Cara LaForge, Business & Operations Director, Frost Giant Studios
Integrations like these help ensure a smooth transition and minimize disruptions to your business operations. A PEO that provides a modern, tech-savvy approach to HR can significantly enhance your overall experience.
Choosing The Right PEO
Choosing the right PEO for your business can be a challenging task, but it’s about more than just cost — it’s about finding a partner that can help you navigate the complex world of HR, compliance, and administrative tasks. By taking the time to consider these key factors when choosing a PEO, you can have confidence that you are making the best decision for your business.
With Justworks PEO, you can have payroll, compliance, and HR all in one platform, as well as access to benefits through the group buying power of the PEO. It's all backed by a full-service support team that’s available 24/7 to help your business succeed, whenever and wherever. To learn more about Justworks PEO, get started today.
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