How to Choose a PEO: Finding the Right Partner


It can be time-consuming to operate a small business, and oftentimes other tasks can shift the focus from core business activities. Many of these tasks are directly related to the mere reality of employing people – from mandated insurance coverages to employee benefits and everything in between. Therefore, it is for these reasons that many small and medium-sized businesses consider outsourcing administrative roles and responsibilities, such as Human Resources and payroll processing services. 

This is where a Professional Employer Organization (PEO) could make sense. A PEO can handle these functions, and much more so that a business can effectively focus on expanding and growing operations.

What Is a PEO?

A PEO provides administrative and HR assistance as well as employee management services to businesses, under a “co-employment” relationship. The PEO acts as the “Administrative employer” and the client functions as the “Worksite employer”. This relationship is based on a true partnership. Because of the PEO structure, a PEO company can help small-and-medium-sized businesses achieve economies of scale that they may not be able to achieve on their own. Partnering with a comprehensive PEO company can help your business succeed with improved efficiency and reduced liability. Outsourcing to a PEO is a viable option to hire administrative support for start-ups as well as companies considering the expansion of their operations.

How to select the right PEO?

PEOs offer a very wide range of service offerings to their client partners, and not all PEOs are the same. The following pointers can serve as a comprehensive guideline when you are selecting a PEO for your business.

Do they have the required relevant technology?

A PEO’s core job is to make administrative tasks simpler. Hence, make sure to inquire about the technology and tools platform the prospective PEO operates. This includes asking what web-based payroll portals they will use to manage payroll-related tasks, track workers’ time, record deductions, simplify employees’ comp payments, and access necessary payroll information.

Meet key staff members

After you have shortlisted or narrowed down the list of potential PEOs, make sure to have face-to-face consultation sessions with the key staff members of the PEO sales and services teams so that you can properly evaluate the possibility of a long-term relationship.  It is important that you have a good feeling about the way they operate and you can have confidence that they can adequately support your company.

Run a background check

It is very important to know about a PEO’s history, years of experience, and qualifications. Therefore, ask questions about their past and present experiences and the industries they work with. You may also ask relevant questions about the number of employees they currently represent and their levels of client retention.

Get references

Always remember that reputable PEOs will be willing to provide you with a list of client references who can testify to their successful working history and the quality of services they provide. Once you get this list, start contacting them to learn about the PEO you are planning to bring on board.

There are many benefits of choosing Kismet PEO to help your business today! 

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