Informative post about what to consider if you're in Professional Employer Organization (PEO).
Joining a PEO is a great decision. Many companies find PEOs useful in handling HR tasks, payroll, and insurances. Often we find companies that have been with a PEO for years and realize they have been grossly overpaying for services.
A good portion of the time, the only PEOs anyone knows about are a handful. Of those companies, many have spent millions on marketing so you do know them. In business, we all know marketing dollars, like every other function of any company, are funded through sales.
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We find many companies utilizing a well-known PEO or payroll company PEO and, quite simply, there are better options in the market; consider the fact that there are over 600 PEOs in the US.
Below you will find some good questions to ask your current PEO provider as well as tips to take into consideration yearly. If your provider is unable to answer or is unwilling to break apart the costs – it’s a good sign it’s time to explore the market.
1- What is your Administration Fee per employee per month?
If this is a percentage, it will increase with your payroll – ask for a fixed per employee per month fee structure.
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7 PEO Costs to Watch.
2- What was the overall medical renewal last year & what was the average?
If you experienced a low renewal, but the average was higher than yours – those costs will eventually be passed on to you and your group.
3- Ask for an itemization of all insurances, administrative costs per employee per month, Workers’ Compensation costs per employee and State, and Federal taxes.
4- Make sure your PEO honors tax cut-offs – meaning, they stop collecting tax money after the limits are reached.
5- Ensure you shop your current PEO annually to ensure you are getting the best price for your company. It never surprises us to see companies that looked at one or two PEOs and haven’t shopped their current provider in years.
As with anything in business, it’s important to create competition to ensure the best price is attained. PEO and the services they provide are no different. Your best option is to use a company like Dinsmore/Steele to help ensure you are getting the best deal. To learn more about how we can help you and your organization - let’s chat.
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Many people have questions about Professional Employer Organizations (PEO) and here we will answer