3 Tips for Selecting the Right PEO for Your Business

3 Tips for Selecting the Right PEO for Your Business

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Managing the HR operations of a business is one of the most costly and timely functions of running a business, but it is also one of the most important. We recently discussed the benefits of a professional employer organization (PEO) in this article. To recap, a few of the benefits include securing health insurance, simplifying the payroll process, and giving peace of mind when it comes to compliance. All of these benefits are critical to maximizing your business’s effectiveness, therefore you need to ensure that you select the right PEO to help you achieve these results. 

According to the National Association of Professional Employer Organizations (NAPEO), there are over 487 PEOs in the United States. With so many different options available, how do you choose the right one for your business? 

3 Tips for Selecting the Right PEO for Your Business: 


What are your greatest business operational and HR needs? This is a great place to start when selecting the right PEO for your business. Some PEO’s specialize in different areas such as compliance or payroll. So before selecting one, it is important to understand what areas you want to focus on and grow in. Prioritizing your needs will help you gain confidence that your PEO will be able to help you accomplish them. At the end of the day, the purpose of working with a PEO is to lighten your load and create more time for you to focus on your core business objectives. 


Employee benefits packages are a big perk to working with a PEO, but you need to have a clear understanding of how the employee benefits are tailored and how the funding works. Here are a few questions that NAPEO suggests asking before selecting a PEO – “Is the PEO fully insured or partially self-funded? Who is the third-party administrator (TPA) or carrier? Is their TPA or carrier authorized to do business in your state?”. You want to make sure that you select a PEO that has everything that you need and require as a business. 


Lastly, before selecting the right PEO for your business, you want to ensure that they are qualified and have adequate experience working with other businesses. A great test is to check and see if they are on the list of IRS Certified Professional Employer Organizations. Check out the list here. 

If you have additional questions about selecting the right PEO for your business, our team would be happy to help you! Reach out to us here. 

Posted Oct 19, 2021
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