5 Signs its Time to Ditch Your PEO

Sep 26

And Shop Around for a New One

Whether you’ve been partnered with a Professional Employer Organization for several years or you’ve just begun the relationship, there may come a time when you find yourself feeling a lack of alignment, whether due to poor quality of service, a failure to meet your expectations, doubt about the future, or otherwise.

In the world of business, change is inevitable. It’s up to you, however, to know when to move on and make that change. It’s important that you ask yourself early and often if whom you’re working with is the right fit for YOU.

We get it; it’s all too common to invest in a PEO, only to discover that the partnership wasn’t the perfect match, and that’s totally okay! What's not okay, on the other hand, is continuing down the same miserable path, not knowing when it’s time to cut ties.

With that said, in what follows, we’ll dive into five often-overlooked but crucial signs that you should be aware of when reevaluating your current PEO relationship. While it might be uncomfortable to face, maintaining a PEO relationship that no longer serves you is NOT in the best interest of either party involved.

So, without further ado, let’s jump into the world of self-assessment and discovery to see if your current PEO is truly the right partner for you, OR if it’s ultimately time to move on and shop around for a new one…

Let’s get right into it!

Has Your PEO Overstayed Their Welcome?

Before we dive into the 5 signs to look out for when deciding whether or not to ditch your PEO, let’s take a look at a common scenario to illustrate what it looks like when reaching the point of moving on from the relationship.

You’ve been with your PEO for years; they’ve helped you navigate the complexities of human resources, compliance management, and employee support.

Over time, however, you’ve noticed a slow and gradual dip in performance; they’re slower to deliver on tasks, they’re less motivated to invest in the relationship, your client liaison keeps changing, and they’re beginning to show outward fatigue toward their everyday duties as a PEO.

To no fault of your own, you begin to question whether or not the recent mistakes and bottlenecks in your HR processes are to be blamed on your PEO.

Companies encounter scenarios like these on a daily basis. Unfortunately, all too often, they fail to take necessary actions, allowing the problematic relationship to persist, resulting in continued mistakes and dissatisfaction.

To ensure that YOU are not already in this scenario and/or don’t end up in this scenario or one similar, here are five (5) signs to look

1. Poor Communication Leaves You in the Dark

Communication is the cornerstone of any successful partnership, and the same applies to your relationship with a PEO. If you find that you're constantly chasing your PEO for updates, struggling to get timely responses to your queries, or feeling like you're left in the dark about important HR matters, it's a glaring sign that something's amiss.

What to Look For: A responsive and proactive PEO should keep you informed about regulatory changes, HR updates, and any issues related to your employees. If you're not getting the support and communication you need, it's time to consider alternatives.

2. Escalating Costs Without Added Value

One of the primary reasons businesses turn to PEOs is to reduce costs and streamline HR operations. If, over time, you notice your PEO's fees steadily climbing without any corresponding increase in the quality or scope of services, it's a red flag.

What to Look For: Assess whether the value you receive from your PEO is proportionate to the costs. If not, it may be worth exploring alternative providers that can offer a more cost-effective solution without compromising on quality.

3. Inflexibility Hinders Business Growth

As your business evolves, your HR needs will change too. If your PEO isn't adapting to your growing or changing workforce, it can become a hindrance to your business's growth and success.

What to Look For: Consider whether your current PEO can accommodate changes in headcount, expansion into new markets, or shifts in your HR strategy. A flexible PEO should be able to grow with your business.

4. Compliance Concerns Keep You Up at Night

Staying compliant with ever-changing labor laws and regulations is a constant challenge. Your PEO should be a partner in this endeavor, ensuring that your HR practices are always in line with the law. If you find yourself losing sleep over compliance issues, it's a warning sign.

What to Look For: A reliable PEO should have a strong track record of compliance and a team of experts who stay on top of legal changes. If your current PEO isn't meeting these expectations, it's time to seek a more compliant partner.

5. Employee Dissatisfaction Is on the Rise

Your employees are the lifeblood of your business, and their satisfaction matters
greatly. If you notice an increase in employee complaints or a decline in morale, specifically related to the PEO relationship, then it's time to make a change.

What to Look For: Employee engagement surveys and feedback can provide valuable insights. If you consistently see negative trends related to onboarding, benefits enrollment, ongoing benefit issues, and overall dissatisfaction with the level of employee support the PEO is supposed to provide, it's a sign that your PEO may not effectively support your workforce.

Don’t Settle for Less!

If your current PEO isn't meeting your needs, it's okay to explore other options. Remember that finding the right PEO partner is crucial to your business's success, and settling for less can have detrimental long-term consequences.

Evaluate your PEO relationship regularly, and don't hesitate to make a change if you identify any of these warning signs.

Still unsure if your current PEO is right for you? Take our quiz to assess your current PEO relationship and discover if it's time for a change. Click here to start the quiz!

Finally, if you’re eager to talk to a real-world professional to iterate your cause for concern, or in need of some relationship guidance, Schedule a meeting with our experts at Dinsmore Steele today.

We're here to discuss your unique needs and help you find the perfect HR partner. Click here to set up a meeting. Your business deserves the best!

Rodney Steele

As Dinsmore Steele’s CEO and Founder, Rodney is responsible for the leadership and vision of Dinsmore Steele, as well as leading the company’s solution development and strategy. He founded Dinsmore Steele because he witnessed first hand the inefficiencies and difficulty companies had when pricing, shopping and purchasing their human capital solutions, and so he created single source platform that comparatively shops the entire marketplace. Prior to Dinsmore Steele, Rodney had an illustrious career in Capital Markets and Banking for some of the largest financial institutions in the world. Committed to changing the way companies shop for their human capital needs, Rodney and the entire Dinsmore Steele team is at the forefront of human capital. Rodney holds a bachelor’s degree in finance from the University of North Carolina, Chapel Hill. He is an active member of his community and resides on the North Shore of Long Island with his Siberian Husky Jefe.