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5 Questions to Ask When Shopping for a PEO

5 min read

Deciding to partner with a PEO is a huge step for a business. However, making this decision is only the beginning. Because a PEO is integral to your business’s growth and success, you’ll want to make sure you ask all the right questions before committing to a co-employer. 

At, we help connect you with top-quality PEOs that can take your business to new heights. However, we recommend asking all the hard questions before signing on the dotted line to ensure your PEO aligns with your business goals. Below, we’ve compiled a list of important questions to ask when shopping for a PEO. 

What Will I Be Paying For?

As an employer, you will pay your PEO for a pre-set bundle of HR services. These services will be contractually outlined in your PEO service agreement, distinguishing which administrative tasks will be covered by your PEO. Generally, a PEO will charge for their services based on the number of employees you have and the specific services you will use. 

Though PEO costs can cost an average of 2-12% of wages, they are typically a worthwhile investment. Outsourcing a PEO for your HR solutions will save you the time and revenue lost from administering HR on your own. As a result, you can dedicate your time and resources to the parts of your business that need it most, unlocking its true potential.  

What Services Are Included? 

Your PEO service bundle will include several integral HR solutions. Though every service package can be different, most will generally have the following perks: 

HR Administration

Your PEO will take on all significant HR services for your business, including employee onboarding, performance management, employee relations, HR policy development, employee recruitment and retention, and guidance on any employee-related issues. 

Payroll Administration

On top of your HR functions, your PEO will also handle payroll administration. PEO payroll services process payroll, calculate and deduct taxes, distribute employees’ paychecks, and manage year-end reporting. 

Benefits Administration

Employee benefits are an essential component of your PEO service bundle. Your PEO will oversee benefits administration, including enrollment, claims processing, and compliance. They will find the best benefits plan for your business and ensure all your employees’ needs and wants are met. 

Compliance Management

Your PEO will offer vital compliance management services to ensure your business follows federal, state, and local employment guidelines and keep tabs on legal developments and changes related to employee classification, minimum wage, overtime pay, and other labor laws. 

Risk Management

Running a business comes with a lot of risks and responsibilities. Part of your PEO’s job is to provide guidance on workplace safety, worker’s compensation insurance, and other risk management issues to protect your business from work-related accidents, injuries, and legal claims. 

Employee Training and Development

Onboarding new employees is a lot easier with a PEO. Your PEO can provide employee training and development services to efficiently prepare new employees for their professional roles. 

What Accreditations Does Your PEO Have?

When considering a PEO, you should always research its credentials and experience level. A reputable PEO will meet state and federal requirements, have proper licensing, and be in good standing with organizations like the Employee Services Assurance Corporation, The Better Business ıureau, and local and state chambers of commerce. You may also take into account whether your prospective PEO is a certified professional employer organization or CPEO. A CPEO has special IRS certifications allowing them to take total liability for federal employment taxes for wages. As an employer, working with a CPEO will ensure you are not responsible for payroll processing or tax payments. 

After evaluating your PEO candidates’ credentials, you might also dig into their experience level. Some factors to consider include: how long the PEO has been in business, the average tenure of the PEO’s staff, the PEO’s client retention, and the PEO’s references and testimonials. The bottom line is that you want to ensure your PEO can meet your business needs. 

What Technology or Software Does Your PEO Provide?

One of the biggest perks of having a PEO is taking advantage of their technology solutions. A PEO’s technology resources simplify business processes like HR operations, payroll processing, and benefits administration. When shopping for a PEO, ask your candidates what software and technology they provide. You may also ask to preview their HR platform, telling you whether you can easily integrate this technology into your day-to-day business operations. 

Do You Provide Employee Benefits? 

When shopping for a PEO, it’s important to remember that benefits packages can vary. While most of your candidates will offer some sort of employee benefit plan, these offerings might look different from PEO to PEO. Before taking them on as your partner, you’ll want to figure out specifics about your PEO’s health insurance, retirement plans, wellness programs and resources, and life insurance. In doing so, you should inquire about which carriers the PEO partners with and what plans are available to ensure your benefits package aligns with your team’s needs, expectations, and lifestyles. 

Simplify Your Business with 

At, we make it easier to find the perfect PEO provider for your business. With access to some of the largest PEOs in the country, our agents provide high-performing options that will unlock your business’s true potential. If you’re ready to take your business to new heights, connect with our team today to shop PEO quotes and receive competitive pricing within 24-72 hours!

Ready to take your business to the next level?

Contact us today to learn more about how we can help you achieve your goals.

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