When is the Right Time To Hire a pEO?
Is it the right time for me to hire a PEO?
When it comes to making smart decisions, timing is everything, and that’s especially true if you’re thinking about hiring a PEO.
PEOs, which are single-source providers of integrated business services, allow business owners to responsibly and cost-effectively outsource many of their human resources, administrative and employment-related tasks. This in turn frees up their schedule so they can focus on growing their business and increasing their revenue.
So if you’re a business owner, how do you know when it’s the right time to get a PEO quote?
Well, according to Patrick Moraites, a partner and vice president of business development for Tampa-based AXIS Group, there are a few things to consider.
First, you’ll want to determine what’s driving you to hire a PEO. For many business owners, it’s related to workers’ compensation insurance and employee benefits. If that’s the case, you’ll need to figure out when these policies are up for renewal and also be mindful that the policy dates may overlap or not always align perfectly. Should you find yourself dealing with staggering dated renewals, you may want to start gathering quotes with the goal of hiring a PEO at the beginning of the following year or the end of a business quarter. This way, you can kick off the new year without any tax restarts or a fresh quarterly budget.
According to Patrick Moraites “There are many things to consider from a cost standpoint and you’ll want to make sure you fully understand the costs and benefits. Does it make more sense to wait or go ahead and move forward?” When you evaluate these things and you know the numbers he says “If the timing isn’t right, the savings you may incur could end up being a wash.”
And speaking again of timing, you can’t just wake up one morning, decide that you’re going to hire a PEO, and sign the paperwork that afternoon. In order to go through the process properly, Moraites advises that business owners should always give themselves at least three months time to gather all of the necessary documentation required by the PEO.
“The last thing you want is to realize your policy renewal is next week and you’re suddenly scrambling to get everything together,” he said. “That’s because the vast amount of documentation required by the PEO for the business owner to receive an accurate quote is very significant.”
Documents Required by a PEO
- Payroll registers
- 3 years of workers’ compensation loss history (if you have it)
- A no-loss affidavit if your business is less than three years old
- General business information (FEIN, locations, and any other relevant other data
- Employee benefits including employee census & personal health questionnaires
Once you’ve got everything in place – or maybe even before – you’ll want to do your research to find the PEO that’s right for you. The good news is there are lots of resources out there to help. Start off by visiting www.napeo.org and www.esac.org to educate yourself on the ins and outs of PEOs and the services they provide. When you find a PEO you like, get demos of the technology they offer and then do a cost analysis of your current pricing versus your new pricing so you can make an informed decision that makes sense for you financially.
However, if you don’t feel comfortable searching for a PEO on your own, you might consider working with a PEO agency like AXIS Group. At no cost to you, the team at AXIS will do a thorough analysis of your business along with your needs, goals and expenses and help you create a plan of action. That might mean hiring a PEO immediately, waiting another few months or possibly not employing one at all. It’s all about doing what’s best for your organization on your timeline without any pressure or stress. Who could ask for anything more?
Whether you’re ready to move forward with a PEO now or you’re still in information-gathering mode, let our experts help guide your decision. Contact us via phone or email by clicking here.