Selecting the Right PEO

The National Association of Professional Employer Organizations (NAPEO) offers the following guidelines to companies considering a relationship with a PEO:

  1. Assess your workplace to determine your human resource and risk management needs.
  2. Make sure the PEO is capable of meeting your goals. Meet the people who will be serving you.
  3. Ask for client and professional references.
  4. Does the PEO have a demonstrated history of adherence to the industry’s professional performance practices, including responsible financial management of its business? Check to determine if the PEO’s financial statements are independently audited by a CPA, whether their risk management practices have been independently certified by the Certification Institute, or if their operational, financial, and ethical practices have been independently accredited by ESAC.
  5. Check to see if the company is a member of NAPEO, the national trade association of the PEO industry.
  6. Investigate the company’s administrative and management expertise and competence. What experience and depth does their internal staff have? Does the PEO corporate staffing allocation follow the priorities of the PEO’s marketed services? Does their senior staff have professional training or designations?
  7. Understand how the employee benefits are funded. Is the PEO fully insured or partially self-funded? Who is the third-party administrator (TPA) or carrier? Is their TPA or carrier authorized to do business in your state?
  8. Understand how the employee benefits are tailored. Determine if they fit the needs of your employees.
  9. Review the service agreement carefully. Are the respective parties’ responsibilities and liabilities clearly laid out? What guarantees are provided? What provisions permit you or the PEO to cancel the terms of the contract?
  10. Make sure that the company you are considering meets all state requirements.


These are great guidelines for selecting a PEO, but as a business owner or executive, you may not have time to conduct all the research. Selecting the RIGHT PEO your business requires industry knowledge and adequate time for interviewing all the candidates. What if someone could just do it all for you? What if offloading this task actually resulted in saving money on top of time?

A company like PEO Advantage will find a PEO for your business without all the work, except at PEO Advantage we’re more than just brokers. We real business partners, focused on selecting the RIGHT PEO for you, and our systematic yet personal approach works every time. From the in-depth evaluation and independent references to translating complex PEO quotes into easy-to-read comparisons complete with cost and savings details, we manage it all. Plus, we monitor results and conduct annual reviews so your HR solutions deliver value year-after-year.

Going to market as an individual company or organization can be intimidating and time consuming. PEO Advantage already has solid industry partnerships established, so why not take advantage of them? With 50-plus years of experience, proprietary reverse auction RFP process and expert negotiation skills, PEO Advantage consistently save clients up to 25% a year on custom-fit HR solutions. Best of all, accountability is built into every step.

PEO Advantage also specializes in high-risk and other challenging business scenarios. If you already have a PEO and your admin fee is more than 1.5% we know we can save you money.

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