OneSource Business Solutions Blog

5 Signs You Should Switch PEOs


Choosing the right PEO can be difficult. With more than 900 potential PEOs to pick from, how do you know that you've gotten the one that is the best fit for your company? You may have found a PEO, but how can you know that you've found the right one for you? Here are five indicators that you have not found the right PEO yet and should consider switching. 

1. They're a One Size Fits All Organization

You do not want a PEO that provides only a single plan or option for your business, regardless of what services you need. All PEOs must, at minimum, do payroll processing and workers' compensation. However, services past that shouldn't be mandated. 

For example, suppose that you have a benefits provider that you like: one that fits your needs and offers reasonable pricing for your employees. If that works best for your situation, you shouldn't be forced into the benefits plan provided by the PEO. 

A "one size fits all" model means that your company gets services regardless of whether they are appropriate or whether they are the most efficient way to do things. If you're working with a PEO that only offers a one size fits all model and will not work with you to create a plan that fits your specific needs, you may want to consider other options. 

2. They're Not a One-Stop Shop

You don't want a PEO that will force you into a model that doesn't work for your business. At the same time, you want a PEO that can take care of all of the things you need for your business. A PEO should be able to handle all aspects of HR if required. Ideally, if you need your PEO to take over all the responsibilities of an HR team, they should be positioned to accomplish precisely that. If you have an existing HR team, the PEO should handle whatever tasks prevent the HR team from focusing on the business's core priorities. 

If you've connected with a PEO but found that they could not handle the tasks you need, then they aren't fulfilling your needs. A full-service PEO can offer help for all HR-related tasks, from managing benefits to handling training. 

3. Your PEO is Not Attentive

When you have questions about your benefits or basic HR compliance, a PEO representative should be available as soon as possible. Just like an HR representative within a company should be available when you need them, your PEO should respond quickly any time an issue comes up. 

Likewise, your PEO should know you as a company, not just as a number. You have unique benefits and personnel needs. When you contact the PEO, you should not find yourself constantly explaining who your company is. Instead, the representative should know what you need and who you are. 

4. You're Dealing with a Lack of Pricing Transparency

When you pay for a service, you want to know what you're paying for, and what it will cost. However, some PEOs will nickel and dime you through confusing pricing models. They may offer "package deals," but never break down exactly what's in the packages that make them worth the cost savings. Others add on "extra fees" without clearly explaining to you exactly how you incurred those fees. If the PEO cannot clearly explain where each charge comes from, you may find that it benefits your business far more to move on to one with a transparent pricing model. 

5. Your PEO is Not Based Locally

Local PEOs have a solid understanding of your local economy. They know what benefits local employees are looking for and what elements they need to offer to keep employees engaged and sticking with your business. On the other hand, a national PEO chain might not fully understand your local economy, especially if you're located in a smaller area. 

PEOs outside of your area are less likely to be up-to-date on the latest regulations. Some regulations are based on state or even local government changes, and a PEO outside your area might not receive information about those changes as quickly. A local PEO, on the other hand, will know about those changes immediately--and often, they'll be prepared with a plan before you even hear about it.

There’s more to the decision between local and national PEOs. For instance, what about national PEOs with local offices. To understand why this isn’t much of an improvement, download our eBook “Local vs. National PEOs.”

Local Vs. National PEO