Questions to Ask Before Signing On with a PEO

A professional employer organization (PEO) can be the perfect solution for small to mid-sized companies who need support to maintain all their HR functions and responsibilities. Whether you need full-scale, soup to nuts HR coverage or assistance in one or more specialized areas, such as benefits administration or compliance, the right PEO can offer the right products and services to fit the bill.

But you probably already know that, if you’re already considering a PEO partnership. And as noted by the National Association of Professional Employer Organizations (NAPEO), you may also be aware that PEO client companies are 50 percent less likely to go out of business, grow seven to nine percent faster, and tend to experience lower employee turnover and be more satisfied with their benefit plans than their non-PEO competitors.

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Before you finalize your decision about working with a PEO, here are some questions to ask, to ensure it will be the right partnership for you:

  • What kind of service can I expect? Your PEO should function as a natural, seamless extension of your business. As the employer of record for your employees, this means someone should be readily available to answer all of their – and your – employment-related questions, whether the topic is benefits, payroll and related tax matters, compliance, safety, risk management, or any other areas the PEO has agreed to handle. That’s kind of the point: to have your PEO manage HR responsibilities, so you don’t have to.
  • What kind of HR technology do you provide? A perk of working with a PEO should be access to the latest HR technology and software. Find out what options will be available to you, especially if you’d like to continue using your existing programs or have specific tech-related needs in mind.
  • Do you provide training? Professional development opportunities are not only attractive to candidates, but also allow you to optimize the potential of your current workforce. Find out how a PEO can help with your employee and management training needs.
  • What kind of benefit plans will be available to my employees? Top talent often wants more than just a paycheck. They’re looking for benefits like top-tier health care, life insurance and retirement plans, to name just a few. Ask which carriers a PEO works with as they take your employees under their coverage umbrella.
  • What do your current clients have to say about you? Make sure you know exactly who you’d be going into business with by getting rock-solid recommendations and testimonials. Also find out: How long has a PEO been in operation? Is it certified? Accredited? Ask to see audited financial statements and learn about their industry accolades. Settling for less than the best isn’t what got you this far – and you certainly don’t want to start now.

For more information on working with a PEO and finding the right HR outsourcing option for your business, contact Lyons HR today. Another great reference is We are HR, authored by our founder and executive chairman Bill Lyons.