Working with a Professional Employer Organization, or PEO, is a no-brainer for a lot of small businesses. The time and money saved, having a company managing your human resource functions lead to productivity and profitability for your business.
Much like other businesses, all PEOs are not created equal. There are hundreds out there to choose from. Websites like Quick Sprout can help you determine which company is available in your area. Each comes with its own set of standards and offers. So how do you go about choosing the best PEO company to work with your small business?
1 Make Sure They Can Meet Your Goals
Every business has a group of employees with a certain skill set and knowledge base. While they all might work in the same industry, some companies may be better at recruiting while others are more skilled in processing payroll and benefits. Choosing a company that can maintain your goals is essential to having a successful working relationship. You wouldn’t hire an employee who is unable to do the advertised job, so the same is true for outsourcing your work to a PEO. You want to make sure they are able to provide you with exactly the expertise you need to move forward in your growth.
2 Ask for References
You wouldn’t let someone babysit your kids without knowing a little bit about them, would you? Your business is your baby. You don’t want to hand over control of paying your employees and access to all of your important human resources documents without checking them out first. Ask for references and then call those references. Listen to what the other businesses are telling you. If you really like a company, but multiple references said they were slow with communication, you might want to reconsider working with them. On the flip side, a company that might not be your front runner could have glowing reviews from multiple sources and may be pushed to the top because everyone swears by them.
3 Investigate Their Competence
This goes along with making sure they can meet your goals. Ensuring that they are appropriately licensed and up to date with compliance regulations on their end should go without saying. Take a look at who they hire as well. Does their senior staff have professional designations and degrees to back up their knowledge? You want to make sure that the people working for you are the best of the best; otherwise, you are not getting your money’s worth. Their talent pool should be impressive and filled with real-world experience. A college degree is a great achievement, but if they hire right out of college with no professional experience, it is more likely for you to have a bad experience getting what you want out of your partnership.
4 Have a Firm Understanding of the Employee Benefits
One of the big reasons to use a PEO as a small business is the access to benefits that your employees can receive that they would not have been able to do without them. But it would help if you have a clear understanding of what exactly is being offered to your employees and ensuring it is the best fit for your company. A benefit is only as good as how useful it is. A benefit package loaded with elements that don’t benefit half of your workforce is a waste of money for you and your employee. It has to be the right fit all the way around in order for it to work, and you need to be well versed in what they are offering. This is not something you should just skim and agree to easily. Take your time and really understand the entire benefit package before agreeing that it is right for your business.
5 Make Sure the Contract is Complete and Understood
Long gone are the days of a gentleman’s handshake withstanding as a legal and binding contract. Most contracts can be riddled with legal jargon that can be boring and confusing to read through. That is why a lot of times, business owners skim the content and sign on the dotted line, assuming to get what was talked about in an earlier conversation. All too often, they find out this is not the case. When signing a contract, make sure the terms are clearly outlined and that everything that was discussed is laid out in easy-to-understand language, ensuring you know exactly what you are getting. This helps you manage your expectations and keep them accountable for everything you signed up for.
Choosing a Professional Employer Organization is very much like choosing a business partner. You want a company you can trust, who understands and is capable of meeting your goals, has the best people for the job with solid references to back them up, and who will issue you a clear contract without a hidden agenda. With so many companies out there to choose from, doing your due diligence in screening each company will reward you with a fantastic partnership and the ability for company growth at your fingertips.