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Six Areas to Consider When Hiring a Professional Employer Organization

Guest post by: Ari Rosenstein

Article Overview: If you are at the stage of investigating if a Professional Employer Organizationis right for your company, there are six important factors to take into consideration. An outsourcing relationship can continue for many years, so selecting the right firm is a serious decision that should be given a great deal of thought.

Six Areas to Consider When Hiring a Professional Employer Organization

If you are at the stage of investigating if a Professional Employer Organizationis right for your company, there are six important factors to take into consideration. An outsourcing relationship can continue for many years, so selecting the right firm is a serious decision that should be given a great deal of thought. Consider the following criteria when selecting a provider:

HRO firm will have a large and diverse client base, serving a wide range of industries. The diversification insulates the firm from fluctuations within a particular market and dilutes the risk over many industries. Diversification can take the form of industry, size of employee base, and geographic location. A large, diversi

1. Years in Business
   
   PEO firms, and many HR firms, are entrusted to pay payroll, taxes and insurance premiums. Look for a firm that has strong financial credentials, long-term banking relationships and the ability to prove taxes and insurance premiums have been paid timely.
2. Proven Service Track Record
   
   Stable finances and longevity does not necessarily equate to good human resource practices or customer service. The HRO firm must have a strong team of licensed human resources professionals with a proven track record of assisting clients in all areas of regulatory compliance, safety and benefits.
3. Size and Diversity of Client Base
   
   The ideal fied base of clients also adds to the depth of experience of the firm and their ability to service your particular business.
4. Local Market Presence
   
   Many labor and tax laws vary from state to state. Look for a firm that has expertise in the state in which you do business, and has strong relationships with local vendors and insurance companies. For California employers, this is particularly critical as California regulations differ greatly from federal guidelines. Additionally, a local corporate office will ensure quicker response time and on-site presence.
5. Flexibility in Service Offering
   
   Many HR firms take the "one size fits all" approach by requiring clients to take all the services offered, from payroll and insurance, to benefits and training. It is important to look for a vendor that is flexible in their offering and is able to customize an HR solution to match your company's individual needs.
6. High-Touch Service Model
   
   Many HRO firms follow a high-tech/low-touch approach with services provided primarily through on-line self-service platforms. While this is attractive to many employers, look for a firm that is also available for on-site appearances. It is crucial for the HRO firm to have a qualified team available to meet live with your staff, whether for benefits open enrollment, claims investigations, employee relations, or manager training seminars.

If you remember these six areas as you begin to interview PEOs, you will be on the right path in beginning a long-term PEO relationship.

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Article Tags: HR outsourcing, Human Resources, PEO, Professional Employer Organization



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