9 Questions to Ask a PEO Before Entering a Partnership

9 Questions to Ask a PEO Before Entering a Partnership

These Are the Best Questions to Ask a PEO Before Entering a Partnership


  • With more than 500 PEOs in the U.S., finding the right fit for your business might seem like a challenge.
  • Asking questions to your future PEO is key to understanding their approach to compliance, learning about additional services, and gaining insight into the benefit options available.
  • At CertiPay, we support small and mid-sized businesses with tailored PEO services. Need relief from payroll and HR admin tasks? Contact us to get started!

Even in a small business, confidently managing HR operations can be a real struggle. A Professional Employer Organization (PEO) can free you from the burden of time-consuming tasks and improve employee experience, while keeping your business safe and compliant with labor laws and regulations.

But how to choose the right PEO for your business? This article points out some of the key questions to ask a PEO before entering a partnership, to ensure it’s a good fit for your business needs and goals.

Let’s jump right in!

What Is a PEO and How Can It Help Your Business?

A Professional Employer Organization (PEO) is an external provider that takes over certain HR functions of a business, including payroll, benefits administration, compliance, and more.

For small and medium-sized businesses —which tend to have small HR teams swamped with too many tasks— outsourcing some of their HR functions can offer numerous benefits.

Let’s break down the main advantages of partnering with a PEO:

  • Spend less time on repetitive, time-consuming tasks, enabling internal teams to focus on higher-impact activities
  • Access to HR experts who can stay on top of labor law compliance, handle complex benefit plans, and address Workers’ Compensation claims
  • Save costs by negotiating more competitive benefit and insurance packages, thanks to a PEO’s large client base
  • Improve efficiency by incorporating state-of-the-art technology, such as integrated HR management platforms, automated payroll systems, and employee self-service portals.
Learn About your PEO’s Insurance Providers for Healthcare, Retirement Plans, and More

9 Questions to Ask Your Future PEO

Partnering with a PEO is an important decision that requires careful consideration. PEOs work under a co-employment agreement, which means you’ll be sharing certain employer responsibilities and liabilities with the company of your choice.

According to NAPEO, there are over 500 PEOs in the U.S. To ensure that you find one that aligns with your business needs and objectives, it’s essential to ask the right questions during the selection process.

Here are 9 key questions to ask your future PEO to help you make an informed decision and set up a successful partnership:

What Specific Services Do You Provide?

Understanding the full scope of services ensures that you’re partnering with a PEO capable of meeting your current and future HR requirements.

Typically, PEO’s offer these services:

Do you Offer Other Services for an Additional Cost?

Some PEOs can provide support on other HR-related matters for an extra cost. Always ask about additional services and customization options that might be available.

Examples of PEOs additional services may include:

Make sure you understand the pricing structure and how the PEO offering aligns with your budget and needs.

Which Insurance Providers Do You Work With?

When considering a partnership with a PEO, it’s crucial to inquire about the insurance providers they work with for employee benefits such as health insurance, retirement plans, and Workers’ Compensation.

Understanding this will provide insight into the options available for designing your employee benefit packages. You’ll want to ensure that the carriers have a solid reputation, offer competitive rates, and provide comprehensive coverage that meets the needs of your workforce.

How Many Years Have You Been in Business?

Asking about their years in operation helps you evaluate a PEO’s industry experience, stability, and track record.

A PEO with a long-standing history is more likely to have established processes and the ability to adapt to changing market conditions, navigate challenges, and maintain client satisfaction over time.

What Is Your Current Experience Modifier?

Learning about the PEO’s current experience modifier is vital for assessing their track record in managing Workers’ Compensation claims. In case you are not familiar with the term, the experience modifier, also known as the mod factor, is a key indicator of a PEO’s effectiveness in minimizing workplace accidents and injuries.

A lower experience modifier suggests that the PEO has implemented robust safety programs, risk management strategies, and claims management practices, resulting in lower insurance premiums for their clients.

This information can help you evaluate the PEO’s commitment to safety and risk mitigation and analyze if the company could help you reduce your Workers’ Compensation costs in the long run.

Is Your Organization Familiar with or Experienced in my Specific Industry?

As an employer, you need to get an idea of other similar businesses that your company has provided PEO services to. Every business sector has unique regulations and compliance requirements. A PEO that’s familiar with or has experience in your specific industry will be better equipped to provide specialized advice and implement relevant HR best practices.

By partnering with a PEO that has expertise in your industry, you can benefit from their industry knowledge, network, and experience, leading to more effective HR support and solutions tailored to your business sector.

How Do You Ensure Compliance with Regulations?

Learn how your future PEO manages legal and regulatory compliance. What processes and systems do they have in place to stay up-to-date with federal, state, and local employment laws?

They may conduct regular audits, provide ongoing training to staff, and leverage technology solutions to streamline compliance efforts. Additionally, they should have dedicated compliance specialists who monitor changes in legislation and proactively implement necessary updates to policies and procedures.

Understanding how they handle compliance will give you confidence in their ability to keep your business safe and mitigate risks.

What is Your Customer Service Model?

To ensure a smooth and satisfactory partnership, it’s key to know what’s the PEO’s customer service model.

This includes learning about:

  • The availability of dedicated account managers
  • Average response times for inquiries or issues
  • Support channels such as phone, email, or online portals — what’s the level of support available during business hours?

By gaining insight into their customer service approach, you can assess the PEO’s commitment to providing timely, personalized support and ensuring a positive experience for your business.

What Kind of Technology or Software Do You Use?

Gain insight into the technology or software platforms used by the PEO for managing HR processes, payroll, benefits administration, and other relevant tasks.

Ask if their technology offerings include employee self-service portals, mobile apps, and reporting tools. Lastly, make sure their software can easily integrate with your existing systems.

Ask About Your PEO’s Technology Stack

Find a Trustworthy PEO for Your Business

Partnering with a PEO can help you reduce the workload of administrative HR tasks for your business and focus on what matters the most: your employees and your bottom line. With the support of a PEO, you can focus on growing and protecting your company without having to spend valuable time and energy on these HR tasks you aren’t an expert in.

At CertiPay, our PEO offers tailored solutions for businesses across a wide range of industries, including healthcare, non-profits, hospitality, and more. Want to find out how we can help your business? Reach out to us today.

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Posted Mar 18, 2024
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