What a professional employer organization can do for your business, Pt. 6: the PEO concept

By EricSnethkamp

Expert PEO


In part one of this six part series of articles we discussed the basics of what a professional employer organization or PEO is and its main benefits. Part two discussed payroll and tax administration. Part three discussed human resources services. Part four discussed safety and risk management services. And in part five we covered the benefits management services a good PEO offers. This, the final installment of the series is a summary of the PEO concept.

It is my firm belief that the most direct route to business success is the ability to coordinate and tap the knowledge of a "master mind group."

An intimate look at high ranking politicians or the heads of Fortune 500 companies reveals that their success comes from their ability to effectively use an expert group of advisers. You won’t find these leaders hiring the bottom bidders or the most affordable staff they can find. They know the value of surrounding themselves with the best minds possible. This is the value a good PEO offers businesses.

Not only does the business benefit from partnering with an expert HR staff, it many times receives this benefit at a savings over their previous costs. After all, your time should be spent doing what you do well; running your business. Let the PEO make employing easy and make your business more profitable. The PEO partnership can truly be a win-win for your business.

As a final note it is advisable that you ask your PEO how they fare in comparison to other PEOs when it comes to competitive pricing.

Some PEOs may break their quote into several categories in an effort to show pricing that looks better than their competition. When comparing PEO companies it is best to have them quote you one cumulative average number as a percentage of payroll so that you may easily compare a real world number from PEO to PEO. Have the numbers explained to you and ask about additional charges that may be added for services that are not included in the number quoted to you.

You will find some PEOs have myriad additional fees that may be charged on top of the number quoted to you. Simplicity is usually best and a PEO that gives you a simple to understand quote with a limited number of figures and a limited number of extras will usually make you much happier in the long run. This is provided that they have experience, history and a good number of employees under management.

If you have any questions, I will be happy answer them and give you the information that will help you make an informed decision.