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Selecting The Right PEO For Your Business

If you’re considering engaging a professional employer organization (PEO) to outsource your human resources, you’re not alone. The PEO and human resources outsourcing industry has seen incredible growth in recent years, in part due to the passage and subsequent enforcement of the Affordable Care Act. And although more and more businesses of all sizes and across all industries have started to recognize the benefits of outsourcing HR to a PEO, figuring out which PEO is the right partner for your business can be overwhelming.

Below are five guidelines to keep in mind when selecting the best PEO for your business:

  • Identify your needs. Start by thinking about why you want to outsource your human resources to a PEO. Assess your current HR and administrative department, staff, functions and practices to determine what is working well and in what areas your business is lacking. Use this list to evaluate the service offerings of the PEO firms you are considering to ensure the firm is capable of meeting your business’ specific needs.
  • Verify any licenses and certifications. If you’re going to entrust an outside organization with your business and your employees, it is essential to verify the organization’s financial and legal standing. Ask to see copies of the firm’s audited financial statements, licenses and certifications.In the PEO industry, there are several key certifications to inquire about:
    • Workers’ Compensation: Make sure that your PEO’s workers’ compensation risk management practices have been certified by the Certification Institute. The CI provides independent, professional verification that a PEO’s risk management program meets industry best practices.
    • NAPEO Membership: The National Association of Professional Employer Organizations (NAPEO) provides PEOs with vital resources, continuing education and the latest regulatory and legislative news and information. Avery As the largest national industry trade association, NAPEO certifies that its members remain in good standing every year.
    • ESAC Accreditation: PEO firms that have been accredited by the Employer Services Assurance Corporation (ESAC) represent the “gold standard” of the industry. ESAC monitors participating PEOs to ensure they adhere to strict financial, ethical and operational standards and provides financial assurance for losses clients of accredited PEOs experience in the unlikely event that the PEO defaults on its financial obligations.
  • Do some research. A good PEO will provide HR and administrative services. A great PEO will have a team of subject-matter experts with years of experience across a variety of industries that provides HR and administrative services. Take the time to research a PEO’s staff and past performance. You may even want to ask to meet members of the team who will be servicing your account.
  • Ask for references. Ask for references from the PEO’s current clients. Also ask around in your network of business associates to see what other businesses have to say about the firm’s services.
  • Carefully review the client service agreement. As with any contract, make sure you understand the parameters of your partnership with the PEO. By ensuring that both parties clearly understand their roles and what’s expected of them. This is the time to confirm that the services your business needs will be delivered at the price you’re willing to pay.
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As overwhelming as choosing a PEO can be, it’s one of the most impactful business partnerships your company can make. PEO clients experience higher growth rates, significant cost savings and access to benefits plans and HR technology that would otherwise be out of reach.

For more information on selecting a PEO, download the PEO Purchasing Guide, a free, in-depth manual that walks business owners and HR professionals through the process of acquiring a PEO’s services.

G&A Partners, one of the nation’s leading professional employer organizations (PEO), has been helping entrepreneurs grow their businesses, take better care of their employees and enjoy a higher quality of life for over 20 years.  By providing proven solutions and technology in the areas of HR compliance, employee benefits, payroll administration and workplace safety, G&A alleviates the burden of tedious administrative tasks and allows business owners to focus their time, talent and energy on growing their company.  Headquartered in Houston, G&A has offices throughout Texas, as well as Arizona, Utah and Minnesota.

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