7 questions you should ask about your current PEO-client contract
There are over 700 PEOs operating in the United States alone. Every day, PEOs operating in every industry imaginable are helping businesses of every size imaginable streamline their operations, cut costs, and secure better benefits for their employees. PEOs partner with thousands of businesses and employ millions of workers. With such a wide array of PEOs out there, how is a business owner supposed to know if their current PEO situation is right for them? And if the contract isn’t exactly ideal, does that mean a switch is necessarily in order?
Identify, Engage, and then Decide
Identify. Every business currently employing a PEO should ask itself a set of serious, rigorous, and critical questions to gauge whether or not switching to a competing PEO is justified. Remember, just because a competing PEO promises tremendous savings doesn’t always make it so. They could be offering fewer services, a watered-down package, or they could have forgotten to mention some key conditions. Therefore, before taking steps to consider another PEO, ask yourself the only question that matters: are you happy with your current PEO? If you are more or less satisfied, try to identify areas of the relationship that could be improved such as in the quality of the services provided or overall price. If you aren’t happy with your current PEO, then it’s time for the next step.
Engage. Put your finger exactly on what isn’t working and then take your concerns and questions to your PEO representative. Ultimately, you will find that renegotiating a better deal or working with your PEO to solve issues regarding their services to your firm yields far better results far faster than simply dumping them for a competitor (who may have the very same problems).
Decide. If you have found that your current PEO continues to underperform or that they cannot fundamentally agree in some key areas (such as pricing), then perhaps its best to move on to a better fit. What is important is that this step only is taken after identifying the issues and engaging your current PEO provider. Choosing a new PEO before identifying the issues could result in the very same problems cropping up again. It could also lead to wasted time, money, and effort making a switch when the problem could have been solved with a simple conversation.
Seven Critical Questions to Ask About Your PEO
- Does my PEO make a lot of mistakes? That’s a no-brainer. The whole point of employing a PEO is to minimize risk and exposure and ensure compliance. If your PEO consistently can’t seem to get the payroll right and paperwork out on time, then it’s time to make a change.
- Does my PEO help my business operate more efficiently? If dealing with your PEO causes more headaches than working without one, chances are it’s time for a switch.
- Am I taking advantage of all the HR services I’m paying for? Sometimes companies will purchase a suite of PEO services they don’t even need. When possible, identify what the needs of your business are, then opt to buy services a la carte.
- Is my billing transparent and understandable? If you don’t understand how your PEO fees break down, then you’re probably overpaying for something.
- Do I need better accounting features? PEOs employing the latest techniques and software will save you time, and money, which is the whole point isn’t it?
- Does my PEO respond to my needs promptly? Perhaps surprisingly, many businesses list the availability and responsiveness of their PEO’s HR representative as a major sticking point. In a good PEO-client relationship, communications should be quick and responsive, and aimed at smoothing out potential issues.
- Am I getting the best price I can get? Ultimately, this is the big question everyone wants to know. Unfortunately, it’s also perhaps one of the most difficult questions to answer. I recommend an annual PEO Evaluation. If anything, this will confirm if you have the right PEO in place or provide you with a strategy for getting the right PEO.
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