As you plan for the year ahead, are you thinking about a partnership with a professional employer organization (PEO) to help manage your business-critical HR functions?

It’s a wise consideration for an increasing number of small to mid-sized companies, as responsibilities like compliance, payroll administration, and taxes, and landing competitive benefits packages to attract and retain top talent becomes more and more challenging.

In the process of making this decision, you probably have numerous questions – as you should have. Here are three of the most common ones, along with some answers, to assist in your decision-making process:

What are your team members’ professional qualifications, credentials, and areas of expertise?

Find out how long a PEO has been in business and which specific areas of HR management it considers to be its specialties. Also, make sure the PEO’s employees have extensive knowledge of employment laws in the municipalities and states where your business operates, as well as those enforced on a federal and, if applicable, international level.

• In addition to confirming that a PEO is properly certified, look for the following credentials on the part of its staff members: Professional in Human Resources (PHR) and Senior Professional in Human Resources (SPHR) certification from the HR Certification Institute, and SHRM-CP (Certified Professional) and SHRM-SCP (Senior Certified Professional) from the Society of Human Resources Professionals. These credentials recognize competence, experience, credibility and dedication to the industry. HR specialists must meet extensive criteria to attain them, including passing rigorous exams.
• The professionals who would be handling your payroll should have earned CPP (Certified Payroll Professional) status from the American Payroll Association. This means they have practiced for at least three years and passed the association’s CPP exam.

What exactly is included in your service agreement?

A PEO relationship involves a legal document called a client service agreement (CSA). This agreement should clearly outline each party’s responsibilities, liabilities, contract termination provisions, payment terms, how often price increases may occur, and other key details. Make sure you would not only be comfortable signing a CSA, but concur with everything included therein. If there’s anything missing or that you don’t fully understand, ask. Deep dive until you’re satisfied with all responses.

What added-value services do you provide?

Ask a PEO to outline all the services they would provide if you were to partner with them, as well as the costs of each. Be prepared to provide basic information about your workforce demographics and existing wages and benefits.

• Payroll and healthcare benefits are generally the most basic services provided, but many PEOs go well beyond the minimum. Additional service offerings may include organizational structure review and design, policy and procedure development, training, safety and risk management services, emergency preparedness, and more. Make sure your unique needs will be met; otherwise, there really is no value added at all. If one PEO falls short, keep searching until you find the right one.

For additional answers and insight into the inner workings of a PEO partnership, contact Key HR today. We can connect you to specialists in every area of HR and access to more PEOs and other service providers than any other business of our kind.