Last Minute PEO Contract Renewal Checklist
The beginning of the year is a time for many companies to re-evaluate business goals and set new ones for the year ahead. For companies that work with professional employer organizations (PEOs) for outsourcing human resources tasks, this can be a good time to take a look at how well your partnership with your PEO is working out.
This is smart even if your PEO contract doesn’t renew until well into the New Year. You may find that your current PEO relationship is great, and that your best choice is to renew your contract. But maybe that’s not the case, or you’re not sure. Here are a few questions you should ask before signing on to renew your PEO contract.
Has My Company Grown Significantly This Year?
If your company has gone from being a tiny startup to something larger, then your HR needs have almost certainly increased. Or perhaps you plan to hire key workers in the New Year and you want to be able to offer potential new hires a great benefits package. If your company has grown, but not to the point where hiring your own HR specialist is feasible, you should ensure your current PEO can meet the needs of your growing company.
Have We Expanded to Include Workers With Different Workers’ Comp Risks?
Perhaps business operations have expanded over the past 12 months. New employees and new work functions may have changed your workers’ compensation risk status. PEOs that handle workers’ comp administration have to stay on top of changes in your company as well as changes to state and federal regulations affecting workers’ comp. Is your PEO handling the task with skill? Have you experienced problems related to workers’ comp as your business functions have changed? If you are not happy with your workers’ comp situation, or don’t have confidence that your PEO is handling it well, it may time to make a change.
Do We Want to Start Offering More or Different Fringe Benefits?
You’re no longer a start-up, and you want to make good benefits available to your valued employees. This is a prime reason many small businesses work with a PEO – because PEOs have the leverage and pooling necessary to access better benefits than many small businesses can on their own. What benefits do you want to offer? Can your current PEO accommodate these new needs? What will expanding your fringe benefits cost?
Are There any HR Services We Want to Bring In-House?
Occasionally, companies choose to bring responsibilities formerly handled by PEOs back in-house. This is usually not a problem with PEOs that offer a range of services that can be mixed and matched. If you plan on bringing one or more HR functions back under your own roof, you should determine exactly how this will affect the cost of your PEO services, and consider comparing services offered by different PEOs to see if another one would serve your new, reduced needs better.
Is Our Current PEO Meeting Our Needs?
This is perhaps the most important question to ask when considering renewing your PEO contract. Sometimes PEOs are a great fit, and sometimes they’re not. It may be nobody’s fault, but rather a mismatch of needs and services. Even if you’re basically satisfied with your PEO, it doesn’t hurt to find out what other options are out there. You could find that another PEO offers a pricing structure more to your liking, or offers services your current one does not.
Do I Understand How Our PEO Costs Are Calculated?
Understanding how PEO costs are calculated isn’t always easy. There are numerous methods of calculating PEO costs, and they depend on what industry you are in, what your company’s workers’ comp risk profile is, what state or states you operate in, and what services your PEO takes care of. Though it can take time, understanding how PEO costs are calculated is essential to being certain that you have made the best possible choice in a PEO partner.
How To Find the Right PEO For Your Business
SourceOne Partners, which has offices in Florida and New Jersey, is available to work with businesses in every state, helping them evaluate their PEO options. SourceOne Partners can help you understand exactly how PEOs calculate costs, how these calculation methods affect different types of businesses, and which is best for you. Moreover, SourceOne Partners has over 50 years of combined experience in the payroll and PEO industries, and is ready to put that expertise to work for you, so you can sign onto a partnership with the PEO that is best suited for your business and its unique needs. Call 561-674-0748 or contact us online to speak with a PEO expert today.