Below are the four areas of your PEO that need to be analyzed annually!
Evaluate your PEO costs.
PEO’s charge administration fees that are usually a percentage of your payroll. If you have increasing payroll costs, it might make more financial sense to pay a flat fee per paycheck instead of a percentage of your payroll. Ask your PEO for a payroll report to analyze the administration costs you are paying to be part of the PEO.
Evaluate your benefit needs.
With the amount of competition in the employee market regarding recruitment and retention, it is essential to ensure that your benefits match your competition. (Insert benefits statistics here) Employers are looking to create more creative and enticing benefits packages ranging from offering Gap plans to offset deductible costs to FSAs, to mental health. If you are looking for a more robust benefits offering, it might be time to meet with a benefits broker whose sole expertise is benefits. PEO’s have limited carrier offerings, while an independent agent will have access to all different plan designs. The good news is if you are happy with all other facets of your PEO, your PEO can allow you to carve out your benefits and still stay with the PEO.
What level of service or strategic HR initiative is your PEO helping you with, if any?
When it comes to a PEO, if you are looking for basic benefits or a retirement plan, the PEO might be a good fit. However, when it comes to creativity and expertise, you may want to look elsewhere. PEO reps are not licensed to sell benefits, limiting their knowledge. Your administration fees are to cover your HR initiatives. Some clients rather have a pay-as-you-go strategy with an outside HR consultant instead of paying administration fees for HR services they never use. If you need more assistance with benefit administration, such as medical claims concierge support, on-site benefit enrollment meeting, and/or 401k education meetings, this might be a red flag that it is time to go independent or carve out your benefits.
Do you feel trapped in a box with your PEO technology?
One of the main reasons clients join a PEO is because they want a comprehensive one-stop-shop feel. You have one person handling all your needs. However, many clients see they have outside vendors that do not integrate with the PEO payroll technology. This causes HR to manually input data in multiple systems instead of having one system that talks to each other. If you are having issues pulling the detailed reports you need or find that your technologies cannot integrate, it might be time to look at other HCM technologies outside of a PEO.