Shopping PEO Companies? 7 Questions You Should Ask

peo companies

Maybe you’ve heard about PEO companies and the advantages they offer to businesses and you are starting to look around at the options? After almost 30 years of experience in the industry, we would like to offer you some help to make a smarter decision by providing some questions you should ask the PEO companies while you shop.

See also: What is a PEO?

When looking around at PEO companies, it is important to look at the whole picture, not just the sticker prices and quick fixes they offer. You are literally looking for a company to be a co-employer with you who will help you take care of your people. Make sure this company is someone you could actually consider a good fit as this type of partner. Get to know them.  You will need to find out if you could really see yourself with them for the long term. Nothing takes more time and resources than jumping from PEO to PEO every couple years.

7 Questions To Help You Find the Best PEO Companies

1. What does the agreement look like?

It is important to find a PEO that establishes transparency and simplicity up front. Do your research and look for reviews that claim there were hidden fees and costs, find out what they were and then ask the PEO about this before signing anything. Speaking of signing, what does the agreement/contract look like? Is it a novel that would take days to read through? You probably don’t want to sign something so long that it could pull a veil over your eyes. Is there a penalty clause? Early termination fee? The shorter the contract, the better. Look for transparency and honesty in their salespeople as well.

2.  How long have they been in business?

Ask about their company history. How long have they been in the industry? Experience is one of the most important things to look for in a PEO you partner with.. A company who is 2 years old might not have the staff with the invaluable years of experience, and in depth knowledge that comes from being in the industry for decades.  For this reason, look specifically for employees in the company who offer experience and insight. These experienced staff members will pay huge dividends for you in the future.

Another reason to look for longevity in your PEO is the unique advantages these PEO companies have in flexibility with their carriers. If they have been around for years, and they run into a unique challenge with a client, because relationships they’ve built with carriers and their network they will be in a much better position to help you.

3. How many of their clients have been with them for more than 5 years?

This is a great question that can tell you very quickly a lot about how the PEO treats their clients. If they truly help their clients, and their service is of high quality their clients tend to stick around. Look for 75% or more of their clients to have been with them for 5 years or more. If their percentage is lower than this, it is a good sign they have issues keeping clients happy or offering competitive rates. This will reveal a lot about a PEO company.

See also: Are You Unhappy with Your PEO Customer Service?

4. Do they have the ability to operate in all 50 States?

You know better than anyone, your business can change quickly. Your business could have 100% growth with one new large contract, one major market break through, one new major referral. It is critical that you consider if your PEO has the ability to handle your growth. A PEO who has the ability to operate in all 50 states will be able to scale with you and help you grow quickly without the headaches. This creates tremendous opportunity for you as a small business to have the upper hand on your competitors. Fast growth usually means HR related disasters, not when you select the right PEO.

5. Can they keep you and your business out of court?

We aren’t talking about the tennis court… we’re talking about keeping you out of the courtroom. This is a major advantage that some PEO companies can tremendously help with, and it is actually one of the biggest long term cost savers for business owners. The ways that a PEO can keep you out of the courtroom are many, but it can be broken into these broad categories. Make sure the PEO you are looking at is strong in each of these areas and have solutions for each of these areas.

1) A strong Safety Program that will shield you from harmful workers’ compensation claims and disputes.

2) Alternate Dispute Resolution Programs that solve cases before stepping foot in a courtroom (huge cost savings).

3) Thorough attention to detail concerning your business and all aspects of compliance with taxes, employment laws, payroll, and the rest of the over 60 different gov/agencies you have to comply with.  This tends to correlate with their client service quality and how they manage client communication, client load, how many clients they have compared to staff etc….

*This closely relates to #7:

6. Do they have a safety program that pays you for good performance?

Ask them if they offer any type of cash rebates to reward you for exceptional safety performance years. When you are working hard to keep a safe workplace and your workers’ comp claims down,  they should reward you for it. Make sure that you get rewarded for this hard work you do that ultimately helps out the PEO company as well. Ask them what percentage of their clients typically earn these rebates.

7. Do they use call centers, or do you get to speak with someone that knows you and your business?

Problems do arise, there will be times when you need to get in touch with your PEO quickly. Are you OK with being routed through a call center and the possibility of speaking with a different client service person every time you speak with your PEO? National PEO companies tend to make use of call centers because their client to client service coordinator ratio is too large. When you have a critical problem that needs to be handled quickly, it can be very frustrating when dealing with a new person who is unfamiliar with you and your business. Ask them who in their company will be taking care of you. Ask them how many other clients that person also “takes care of”. This is a big issue that causes lots of headaches for employers working with PEO companies. PEO companies are supposed to reduce headaches for you, not add to them.

See also: The Frustrating Parts About Working with Other Giant PEO Companies

It’s easy to assume that local service means superior service here, but this is not always the case. Certainly not in the PEO world, where many times the local PEO, understaffed, inexperienced, and over their head,  is often struggling with not only wearing too many hats, but also trying to handle too many clients.

These 7 questions will help you make a smart decision and consider the long term ramifications when choosing between PEO Companies.

How Does ERM Stack-up to These Questions?

Well, we’d actually really appreciate you letting us know! We hope to get the chance to meet you personally, shake your hand, and welcome you to our family someday soon. Until then,  here’s the quick answers for each of the above questions:

  • Our agreement is one page front and back. We also give you a guarantee signed by our CEO that guarantees 100% satisfaction or complete refund plus we’ll pay for your setup at a different company.
  • We have been in business for 29 years. We are entering our 14th consecutive year  of renewals with the same Workers’ Comp carrier which is testimony to our commitment to long term relationships. We have experienced PEO veterans who have been in the industry for 20+ years.
  • 90% of our clients have been with us for over 5 years, and we have more than a handful of clients who have been with us for over 20+ years.
  • We are licensed in all 50 states and can handle your rapid growth.
  • Nobody does a better job keeping employers out of the courtroom. Our Alternate Dispute Resolution program and Safety Program are simply the best in the industry.
  • We provide cash rebates for our clients with good claims history.
  • You will NEVER be transferred through a call center when you work with us. You will have a friendly client service coordinator who knows you and your business by name. We have strategically placed processing centers from coast to coast, providing national PEO strength with superior service, the best of both worlds.

If you are shopping for a PEO, we would love the opportunity provide you a free no obligation quote. Give us a call and test us, your call will be answered by a friendly voice and you’ll be one step closer to running your business, rather than being run by your business. We look forward to meeting you, shaking your hand for the first time, and hearing your story.

Download Our Free PEO Shopping Guide

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