Quick look: There are hundreds of professional employer organizations (PEOs) in the country that aim to help small- and medium-sized businesses alleviate the burden of daily human resource-related tasks. However, not every PEO approaches transparency and trust the same way. Here, review how a transparent PEO partnership positively impacts each area of a business and how to choose a PEO partner that has your best interest in mind.
It’s hard to think of a business collaboration more interconnected than the one between a company and its PEO.
PEOs provide various human resource outsourcing solutions, including HR guidance and employee benefits, payroll, recruiting, and risk and compliance services. When businesses enter a PEO partnership, the PEO assumes certain employer rights, responsibilities, and risk. While business leaders maintain control over their organization’s operations and personnel, PEOs handle the bulk of the daily HR administrative workload.
A PEO partnership doesn’t just entail outsourcing administrative tasks; it can significantly impact a business’s operational efficiency, employee satisfaction, and overall success. And, like any relationship, transparency is a necessity.
7 ways transparency affects PEO partnerships
Nothing upsets small business owners—or jeopardizes an SMB’s future—like surprise fees, operational inefficiencies, and frustrated employees who are too busy trying to take care of housekeeping duties to focus on large-value initiatives. While these frustrations are possible when associated with an impersonal, less dedicated PEO, the opposite can occur when you choose the right partner.
A PEO that offers personalized service and decades of expertise can boost your business’s bottom line, employee engagement and retention, and more. In addition to having a clear understanding of pricing, overseeing the intricate workings of HR, payroll, compliance, and benefits administration allows SMB leaders to realize the true value brought to each facet of their organization. When associated with a PEO that acts in your best interest, you aren’t just aware of steps taken but actively participate in the journey towards mutual growth.
Here are seven ways a transparent PEO partnership is vital to the success of SMBs:
1. Establishes trust
When a PEO is open about its practices, policies, and fees, it fosters a sense of reliability and honesty. Trust is crucial in any business relationship, especially when handling something as crucial as human resources.
2. Streamlines risk and compliance
PEOs manage various legal and compliance-related issues on behalf of SMBs. Transparency ensures that the your company is always aware of how these matters are handled, reducing the risk of legal complications or non-compliance with employment laws.
3. Improves decision-making
Open communication allows business leaders to receive accurate and timely information about their workforce and related costs. This data is crucial for making informed business decisions, like budgeting and strategic planning.
4. Minimizes conflict
Transparency prevents misunderstandings. When both you and your PEO clearly understand the terms, expectations, and processes, the chances of a dispute are diminished.
5. Encourages higher-quality service
When honest discussion occurs, PEOs better understand the business’s needs and challenges and can provide tailored, more effective solutions.
6. Increases employee satisfaction
Employees often ask PEO’s customer service team questions about onboarding, enrolling in benefits, payroll matters, and more. Transparency during these interactions increases employee confidence in their employer’s HR processes and policies.
7. Provides financial clarity
Businesses must effectively manage their finances to survive. The right PEO makes this easier by clarifying how fees are calculated, what’s included in services, and any additional costs.
The significance of straightforward PEO pricing
Crystal-clear pricing policies are one of the most important aspects of a PEO partnership—yet some providers complicate their agreements and even add sudden fees on their invoicing.
On the other hand, when a PEO provides thorough, upfront pricing information, it helps SMBs:
- Experience a predictable budget: Honest pricing policies enable businesses to plan their HR and administrative costs accurately and avoid financial instability.
- Feel secure: When businesses understand what they are paying for and why, it fosters a sense of confidence in the PEO’s services and paves the path for a long-term, mutually beneficial partnership.
- Understand their PEO’s value: With transparent pricing, companies can assess the value they receive from the PEO. Businesses can compare the costs against the benefits, such as time saved on administrative tasks, access to better benefits, and reduced risk of non-compliance, to determine the return on their investment.
- Make informed decisions: Well-defined pricing allows SMBs to weigh their costs against their capabilities and decide where to outsource certain functions or handle them in-house.
- Avoid unexpected expenses: Forthright pricing ensures that companies are fully aware of all charges upfront, which helps dodge surprises or disputes.
- Easily compare providers: It’s easier for business leaders to make apples-to-apples comparisons to find the best fit regarding services offered, costs, and their specific organizational needs.
- Customize their solution: Clear-cut pricing can help companies better understand and choose their desired level of service; they can opt for a full suite of solutions or select specific offerings that match their needs and budget.
Finding a trustworthy PEO partner
PEOs provide great value to their customers. They enable small businesses to grow faster, reduce turnover, and avoid going out of business.
However, not every PEO is the same. With almost 500 PEOs in the United States alone, companies must ensure they select a trustworthy partner to help them stay compliant, make educated decisions, resolve conflicts, increase employee satisfaction, and maintain financial clarity.
When choosing a PEO, business leaders should:
- Consider only accredited PEOs
- Avoid PEOs that outsource primary HR functions
- Connect with one of the PEO’s HR managers
- Carefully review the service agreement
- Research the company’s history and reputation
- Present one of their organization’s challenges and evaluate the PEO’s proposed solution
- Request a technology demo
One viable candidate is ExtensisHR. A nationally recognized solution provider, ExtensisHR is one of few PEOs to be recognized as a Certified Professional Employer Organization (PEO), hold accreditations from the Employer Services Assurance Corporation (ESAC) and the Certification Institute, and routinely pass SOC 1 Type 2 examinations.
ExtensisHR is committed to a personalized PEO experience, with dedicated HR and payroll managers and a responsive, friendly support team to answer questions from your staff. Additionally, ExtensisHR proudly retains 93% of its clients year-over-year, and its Employee Solution Center boasts a 95% same-day resolution rate and an 11 second response time.
Are you interested in partnering with a PEO that’s genuinely invested in your success? Contact the ExtensisHR team today.