Top Considerations Related to PEO and Payroll Contract Renewal
If your professional employer organization (PEO) or payroll contract is up for renewal at the end of the year, it may be time to decide which direction you want to go next. Should you continue using the services of your current PEO, switch to a different company, or begin doing your human resources, payroll and other administrative tasks in-house? There are a few things to consider before making the decision, to be sure that the next step is the best choice for your business. Let’s take a look at the options available to you and determine if contract renewal is a good idea.
Does your PEO contract benefit your business and budget?
PEOs use all kinds of different pricing models when pitching prospective clients, some in the best interest of the company and others in the best interest of the PEO. For business owners who are newbies in the world of PEO and payroll outsourcing, sometimes contracts get signed with unexpected hidden fees tacked on. Some PEOs charge a percentage of the overall payroll, while others charge monthly per employee – each have their own advantages depending on the size of your business. (The former will save a growing company money in the long run.)
When renewing your PEO contract, ask for an itemized breakdown of fees and charges that you can compare to other vendors as well as the cost of doing these services in-house. A reliable PEO should allow you to pick and choose the services you want to pay for, giving you the best value for your money.
Has your company grown?
Perhaps when you originally signed a contract with your PEO you had 35 employees. It made sense in the bigger financial picture to outsource your payroll than it did to hire someone and pay him or her a salary in-house. Since then, your company has grown exponentially from the modest 35 employees to almost 80. At this point, you have a choice of either using an existing employee to handle the payroll or continue letting your PEO take care of business.
You may wish to consider additional services in a new contract to complement your growing team, such as employee benefits, instilling an employee handbook, and outsourcing your HR– all of which a PEO can take on.
Has your existing PEO met expectations?
If you have been underwhelmed by the services offered by your current PEO, it may be time to think about switching vendors. You may have a PEO that charges additional administrative fees everywhere they can, despite giving you a proposed price when you signed the original contract. Perhaps your PEO works with a payroll company who is not financially stable and feels like a liability rather than an advantage.
SourceOne Partners can help you find the best PEO partner for your business, with the best rates. We have the experience necessary to decipher confusing PEO billing reports and take the burden out of the proposal process. For small to mid-sized businesses looking to renew their current PEO contract, we can find you a partner who will help your business comply with tax laws, increase employee productivity, and offer expert advice to reduce your administrative costs. Schedule a free PEO year-end contract review today! Contact us online or call us at 561-674-0748.