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Choosing a PEO for Your Business

PEO's or Employee Leasing Companies Provide HR, Payroll, Benefits

May 17, 2009 Victoria Anisman-Reiner

Selecting a PEO to outsource business needs is based on factors like expertise in the right sector, a PEO company's services and their professional practices & experience

Almost any company stands to benefit from the services of a PEO or professional employer organization. The process of choosing a PEO to outsource a small business' payroll, human resources needs, or the administrative side of the business might be simpler than most business owners think, with a good idea of exactly what the business wants from a PEO, and a few key questions.

What is a PEO?

A PEO or "professional employer organization" is a business that manages key tasks like payroll, human resources, health insurance, and other employee benefits so that small business owners don't have to. PEO services free up time so that small business owners can do what they do best – focus on the core products and services of their business.

What Services Does the Business Want from a PEO?

A PEO can provide all kinds of services, from helping to find staff and temp help to running all the legal and administrative side of a business. In order to get the desired services at the best price possible, it's a good idea to make a list and prioritize the services that are most needed, as well as those that it would be nice to have a PEO take care of.

PEO companies offer services that include:

low group health insurance rates and employee benefits
payroll processing
human resources and staffing
legal advice and protection
tax services
employee training and programs

It's also smart to do some preliminary research into how PEO organizations function to know and understand what kind of control a PEO may ask a business to give up and what some of the options are in terms of payment.

Key Questions to Ask PEO's

The following questions are a starting point in considering a prospective PEO:

Does the PEO offer the desired services, in a way that will suit the company?
Does the PEO have expertise in this business field?
Does this PEO have a history that can be checked? Do they provide references, certifications, and documentation of their professional practices or whether they have been independently audited?
How does the PEO make money?
What kind of co-employer agreement do they use?

Ask any questions necessary to ensure comfort with the terms and conditions of a PEO. Choosing to work with a PEO is a major decision that can do wonders for a business – but it's good to be sure that it's the right decision and that the PEO that has been chosen will be the right one to support a business' needs and long-term goals.

Reference

Entrepreneur Media, "Professional Employer Organization (PEO)," Entrepreneur.com, accessed 15 May 2009.
PEO.com, "Frequently Asked Questions: All that you ever wanted to know about PEO's and PEO.com," PEO.com, accessed 15 May 2009.
Professional Employer Organization Canada, "What is a PEO?" PEOCanada.com, accessed 15 May 2009.

The copyright of the article Choosing a PEO for Your Business in Business Management is owned by Victoria Anisman-Reiner. Permission to republish Choosing a PEO for Your Business in print or online must be granted by the author in writing.

What PEO Services Does Your Company Need?