1) Company size & Industry:
Not all PEO’s are equal. Many are designed for traditional small businesses with 25–100 employees, while others are better aligned for smaller groups of 5–40 employees or larger organizations with 100+ employees. Every PEO, whether they openly market it or not, each PEO will have a specific employee count range and specific industries they are best suited to serve.
2) Cost:
While a lower cost PEO may seem appealing, a closer look may have both advantages and drawbacks. It may offer competitive pricing on administration, workers’ compensation, or SUTA, on the other hand, health insurance renewals could be significantly higher as they don’t prioritize their master medical plan or even have a master medical offering. Lower costs may mean slower customer service, and essential employee services may be offered only as add-on fees resulting in the same or higher overall expense compared to other PEOs.
3) Contract Evaluation:
A PEO agreement is a fully enforceable legal contract. Each PEO contract contains termination provisions, potential hidden fees, and auto-renewal clauses that are often missed. PEO brokers are familiar with these contracts and each provider’s cancellation and early termination policies. Failing to properly review and negotiate these terms upfront can be costly when a company wants/needs to exit or change PEOs.
4) Evaluating Service Model:
Some PEO’s provide a single dedicated account representative to manage your relationship, while others offer a team of specialized representatives covering areas such as payroll, health benefits, HR, and workers’ compensation. In some cases, support is provided primarily through a call center or online chat system. Understanding a PEO’s customer support model is critical to ensuring it aligns with your company’s needs and with how you operate as the person responsible for the HRIS and employee management.
5) Not Using a PEO Broker:
When going directly to a PEO, you are working with a trained sales representative whose primary objective is to close the deal and meet their sales quota. Their role is to position their company as the best fit, highlighting lowest pricing, benefits, technology, and services, regardless of whether it is truly the best solution for your business.
A PEO Broker has access to a broad network of PEO partners. We can evaluate and compare multiple PEOs simultaneously, ensuring our focus on matching you with a PEO that meets your needs, delivers satisfaction, and supports a long-term partnership. Our role is to align your company with the PEO that best fits your specific requirements, not to push a single solution.