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What should I look for in a PEO?

Home » Human Resources » PEO/Employee Leasing » What should I look for in a PEO?

The decision to use a PEO – or an employee leasing firm -- is a significant one for your business, so you’ll want to closely investigate a PEO before entering into a contract. There are a large number of PEO companies available, however, so you should be able to find one that fits your needs. As you investigate each PEO, you should consider the following factors:


  • Reputation: Given the importance of your choice, make sure that you speak to businesses that have worked with the PEO in the past, and give extra attention to businesses that resemble yours in size and vision. Are those businesses happy with the service of their PEO? Has the PEO consistently delivered in a timely, professional fashion on its contractual obligations?
  • Staff Credentials: You’re giving up a measure of control of your company, at least in part, because you lack the expertise to confidently handle the administrative side of your business. With that in mind, does the staff of the PEO inspire confidence on your part in their ability to manage your administrative needs? Reference education and experience in order to ensure that you contract with a PEO who possesses more expertise than you do.
  • Financial Stability: As part of the administrative tasks it will handle, the PEO pays taxes and disburses funds to your employees and creditors. You’ll send them a check each month to cover those expenses, but the PEO assumes the ultimate responsibility for those payments. As such, make sure that you’re comfortable with the ability of the PEO to meet those financial obligations.
  • Services offered: You’re considering a PEO in order to give yourself more time to focus on the growth of your business, so inquire about the spectrum of services offered by the PEO. Because of the added expense and mitigated control that results from a PEO contract, make sure you choose a PEO that can genuinely provide you with relief from all of your administrative concerns.



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