PEO Buyer's Guide

Choosing an employee leasing company

When it comes time to find an employee leasing company, you can either go directly to a PEO provider or turn to a PEO broker.

When talking directly to a PEO provider, you can discuss what you are looking for and the provider can walk you through their available employee leasing solutions. If you don't like one PEO provider, simply keep surveying other ones until you find one who best fits your needs. You'll have limited pricing options - established providers can typically dictate a premium since they are well known in the industry.

Brokers can help by assessing your company's needs and then matching you with the appropriate employee leasing company. This saves you the time of meeting with multiple providers, although you're limited to those providers the broker knows. Most PEO providers cover all industries. However, if you need specific PEO services that the broker's network can't provide, you'll have to find a provider on your own.

Regardless of whether you go directly to PEO providers or work through a broker, you should first assess your workplace to determine what you need. Some things to consider when selecting an employee leasing company:

• Do you already have benefits in place?
• Are there benefits your employees are asking for that you can't currently offer?
• Are you paying too much for certain benefits?
• Are you spending a majority of your time managing your employees instead of your business?
• Is your office compliant with state and federal employment regulations?
• Do you have documented workplace policies and employee handbooks?
• Are your employees protected if they have an accident or a conflict with another employee?
• What hiring needs do you have for the next 12-18 months?
• Do you know enough about prospective hires before you make them job offers?
• Can you develop programs to retain employees?

Before you meet with any vendors, determine when you would like an employee leasing company to start. It can take a PEO vendor a few days or several weeks to get started, depending on how complex your needs are.

Meet with all employee leasing companies in person to discuss what you need. Make sure they have the experience to help you reach your goals. Find out what work they have done in your industry and ask what they did to help similar companies achieve success.

Ask what kind of on-site services you will receive. While a PEO vendor typically works outside your office, they should make regular trips to your company to discuss any issues or upcoming policy changes with you and your employees. You also might want to confer with them for advice on a particular issue that needs an immediate solution such as an employee dispute, so ask about their policies and response times for both emergency situations and routine questions. This support can vary based on the PEO vendor.

After you hear the proposals from multiple employee leasing companies, most of them will allow you to meet and prescreen the actual staff who would work with you. This will let you gauge their approach to business and personality to decide if you could work together as co-employers.

Ask for both client and professional references from all PEO vendors. Request a few references from a PEO vendor's previous clients, preferably companies in a similar industry to yours. Check their financial background including their banking and credit references. You want to ensure they paid all payroll taxes and insurance premiums on time. Also, find out if they are affiliated with a recognized industry organization like NAPEO that has specific business practice requirements to become a member.

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