A PEO-client relationship is by its very nature an intimate affair. PEOs, or Professional Employer Organizations, effectively act as co-employers for their clients’ employees. That means that for tax and general human resources purposes, a PEO is the employer of record. While that may sound a bit intimidating at first, in practice, all crucial decisions are still made by the client and PEOs take an advisory role. Furthermore, should a PEO arrangement be terminated, the employees stay with the client. A client’s success is their success. And a client’s failure will have negative consequences for the PEO as well.
Nonetheless, as with any close working partnership, you want to be certain that the PEO you have chosen is right for you.
Here are five signs to look for in a PEO-client relationship:
- They do their due diligence.
PEOs share liability with their customers. That means they too have to be careful about who they opt to partner with. Expect a good PEO to ask lots of questions about your company, and to talk bottom line in a straightforward way. If it feels like a PEO is just looking for a quick deal, something is up.
- You actually like their representatives.
Good PEOs provide HR professionals with whom you will work on a day-to-day basis. It makes sense then, that you the business owner should get along well with these liaisons. A good personal working relationship can make a world of difference, and a poor working relationship just isn’t worth the hassle – no matter how much the PEO may promise to save you.
- They have a history of working with companies in your industry.
Like any industry, look for partners who are insiders. When it comes to PEOs, specialization can be key. After all, PEOs rely heavily on their knowledge and understanding of the rules and regulations to save their clients time and money.
- They are transparent and upfront with information.
Successful PEOs don’t have anything to hide. Often times, PEOs will hand over their own financials to a client for review, along with information about insurance providers and creditors.
- They are realistic with their promises.
PEOs are NOT, and never have been, a cure-all for failing businesses. In fact, a good PEO would never enter into a contractual relationship with any business obviously doomed to failure. But, utilizing the services of a PEO in conjunction with competent ownership can be just what an aspiring firm needs to succeed. A good PEO will tell you just that. They’ll show you all the numbers relevant to your business and your industry. Then, they’ll show you exactly how they can help get your company to where it needs to be.
Teaming up with a PEO can be hugely beneficial to small companies and enterprises looking to grow and expand. The key is finding the right PEO .