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Why level of service matters when choosing a PEO


What should you look for in a professional employer organization (PEO) when it comes to service? If you’ve never used a PEO before, you need to know that the level of HR support, breadth of services offered and the delivery model for those services can vary widely among what seem to be very competitive providers.

Our aim in this article is to help you recognize and understand these differences when you’re shopping for HR outsourcing services. But most importantly, we want to encourage you to stay focused on your business needs and seek out a level of HR support that aligns best with your goals.

What matters to your organization?

When shopping for HR outsourcing services, many people start by comparing different PEOs before they have a really good understanding of what they’re trying to fix inside of their business.

Just like you wouldn’t blindly shop for a house without knowing what features are most important to have, be careful not to jump into comparison shopping too soon when searching for the right HR outsourcing services.

Instead, first concentrate on the problems that need to be solved in your business. This will help you locate the right PEO to work with and the breadth and level of services that fit your needs.

Look at the challenges in your business that are potentially costing you money. These issues could be:

  • We’re not growing as fast as we want to be.
  • Our sales aren’t as high as we want them to be.
  • Our profitability is not as high as we want it.

Ultimately, a PEO’s level of service matters because you’re trying to solve your particular business problems. Knowing how you plan on using HR outsourcing services and what solutions you’re seeking positions you to best evaluate your options.

Levels of HR support from PEOs

At first glance, especially after engaging with many similar sounding marketing materials and sales pitches, it’s easy to miss the differentiators between PEOs. That’s because when we shop for something that’s new to us, we tend to look at the similarities rather than the differences, and that’s often the case for new buyers in the PEO market.

It’s the differences that matter – not the similarities – among our buying choices. And one of the major differences in the PEO marketplace is the level and breadth of service that each one offers.

PEO A: Some PEOs are built around a self-service model, providing an online library of HR best practices and advice for their clients.

PEO B: Other HR outsourcing providers may expand on an online database by providing a call center to which clients can reach out with questions.

PEO C: At the opposite end of the spectrum are full-service PEOs that give clients a dedicated service team, providing the opportunity for ongoing guidance from a trusted group of HR professionals.

What does level of service look like?

Clients from each of these types of PEOs could have much different experiences in the moments when they need HR support. Let’s use preparing to terminate an employee as a sample situation.

PEO A may provide you with an online list of steps on how to enter a termination into their system so that they can generate a final paycheck.

PEO B may suggest that you call into their call center to discuss any concerns that you may have prior to starting the termination process.

PEO C might encourage you to call your HR specialist to discuss:

  • The details of the termination
  • How to document it
  • Any potential liability challenges that could arise

And then PEO C might also ensure that the terminated employee gets all of the necessary resources (e.g., benefits continuation information) and has a positive experience throughout the termination.

What does good HR outsourcing service look like?

So, the definition of “good” PEO service is all relative depending on your organizational needs and how your internal team wants to be supported when you seek HR help from your PEO.

For one company, full-service may be the clear winner. They’re seeking a partner to help them approach HR strategically and deliver complex solutions. For another company, a call center model may be perfectly adequate. They want access to best practices and occasional help with applying them to their workforce.

No matter your preferences, remember that the value of a PEO’s services to you can and should go beyond just giving you time back through administrative relief. Look for a PEO that gives you additional resources to solve the people-related problems you want to fix – those that you haven’t been able to resolve yet with the talent you already have inside your organization.

Summing it all up

When evaluating service level, don’t just let PEOs market to you. Rather, determine what services are most important and how you’d like to access them, and then use that information to make sure a PEO is the right fit.

Ask to meet with the service teams that would actually be providing the HR outsourcing to your company. Because just like you would hold interviews for an internal HR hire, you should be interviewing your PEO. Bring some real world scenarios that are happening in your business and ask them – how would you help me solve this? What would you do?

You will be able to learn fairly quickly if a PEO’s service team:

  • Has the right skillset and level of expertise to serve you well
  • Provides the depth of service you’re seeking
  • Has the type of mindset with which you can work well and be successful

If you’re searching for a PEO, download The Insperity guide to HR outsourcing. In this free magazine, you can discover how PEOs commonly help client companies, weigh your HR outsourcing options and learn which questions to ask a prospective PEO.