Switching PEOs: Your 5-Step Guide to a Smooth Transition

If your small business has already partnered with a PEO (Professional Employer Organization) provider, then you likely already know the advantages—for example, companies using a PEO are 50% less likely to go out of business.

What you might not know is that not all PEOs are created equal.

Maybe you’ve been contemplating switching PEO providers, but finding the right fit can feel daunting. There are so many questions to ask:

• Does your current PEO service your company in the way you need? 

• Is finding a new PEO a complicated process? 

• Will it cost more? 

• What about fees for switching? 

Here, we’ll answer those questions and help you create the ultimate PEO transition plan, including identifying signs that it’s time to switch PEO providers, navigating the differences between different PEOs, and what to look for in a new PEO so you’ll feel confident moving forward.

Why It Might Be Time to Switch PEO Providers

Sometimes, the signs aren’t as obvious as missed payroll or compliance issues. They can be more subtle, like customer support that takes days to respond (if you’re able to connect with a live person at all), the PEO’s software doesn’t integrate well with your existing tools or apps, or there’s simply a general lack of flexibility and scalability as your company grows.

Taken separately or together, these signs can mean it’s time to explore a PEO that’s better aligned with your business needs. Here’s our 5-step guide to making a smooth and confident switch.

5-Step Guide to Switching PEO Providers

1. Finding the Right Fit

Perhaps you’re on the fence about switching PEOs and want to know how a switch would benefit your team and company overall.

Finding the best fit depends on your team’s needs and how they change as your company scales, and whether you’re receiving the level of service you expect from your PEO. 

Asking yourself the right questions can help you find the right fit when evaluating PEOs.

2. Features, Integrations, and Usability

As we mentioned, not all PEOs are created equal. Some are fresh to the market, while others have been around the block more than a few times. Each PEO will have slightly different offerings, but most provide customers with systems or software that facilitate or automate various operational tasks. Some PEOs work with third-party vendors to provide access to even more features and functionality that aren’t built in-house.

Both older and newer PEOs may include some of the same features and third-party additions in their systems or software, so it’s important to consider what unique functionality is most helpful for your specific business operations. Some common PEO platform features and third-party additions to consider include:

Features

• Automated payroll with flexible pay frequencies for different employee types, including contractors and vendors.

• HRIS tools for onboarding, PTO tracking, reporting, document storage, and compliance.

• Support for withholding, reporting, and remitting payroll taxes, as well as filing W-2s and 1099s.

• Online enrollment in health, dental, and vision insurance, as well as other benefits and perks.

In addition to features and integrations, you should consider how various PEOs operate themselves. Some PEOs do more business over phone calls, while others may rely heavily on email to get things done. Think about what approach aligns most with your business and how the various approaches may impact how things run—the right PEO might just help your business run more efficiently!

3. Customer Support

Service and support look different from company to company. It’s important to understand how your business will be supported, including what services are available and how often they can be accessed.

Consider using the following points as a mini-checklist when evaluating current and prospective PEOs:

Communication. What are your preferred methods of communication? Some enjoy using tech-forward channels, like online chats and social media. Others much prefer working through things over the phone or in person. Understand what methods of communication will work best for your organization, and choose a PEO whose support framework offers what you need.

Availability. Does the support availability align with your schedule? Some PEOs offer 24/7 support, while others have specific windows of time when reps are available to assist. It’s important to think about when you or your teams might need the most help—will you need support when you’re handling operations on nights and weekends, or will your team need answers to questions during business hours? This brings up another important factor: Will your chosen PEO support your employees? Some PEOs offer support to the admin only, whereas others extend support services to employees.

Partnership. Are you interested in adding value to your PEO as a customer? Not every PEO is in a position to directly use customer feedback to improve their products and services. But some PEOs can and do make it a priority to maintain a customer-centric approach that actively solicits feedback. If this is important for your business, you’ll need to find a PEO that offers this type of relationship with their customers.

4. Cost and Value

Cost is always a consideration, and many PEOs charge a startup fee for joining. These fees can run up into the hundreds per employee, or thousands for the company. Because fees can add up quickly, look for PEOs with transparent pricing. Justworks’ simple pricing structure is clearly outlined on our site. It’s important to do your research to understand the true cost of joining a prospective PEO.

When thinking about cost, it’s also key to consider the overall value of joining a PEO. The less obvious perks of joining a PEO may benefit your company more than you realize. Some other things to think about in terms of value include:

Scaling as needed. If your business experiences moderate turnover, perhaps you’d benefit more from a PEO that can scale pricing accordingly. For growing companies, this might be important as they continue to hire more employees.

Transparent pricing. Explore your options and ask your prospective PEO if there’s flexibility in choosing only the services your company needs. You may save money while still getting the services that are most important to running your business.

Offering access. One of the biggest draws of a PEO is its ability to access high-quality health insurance for small teams. The cost savings are great, but also consider the impact of having access to enterprise-level health insurance plans through trusted carriers. Improved health and quality of life for your employees can mean long-term value for your company.

There are plenty of other ways PEOs can add value, so review each prospective PEO closely to determine all the ways your business can benefit.

5. Onboarding

While PEOs can save companies time in the long run, the process of joining a PEO does require some time upfront. If you’re looking to switch PEOs, you already have something working in your favor—you’re already familiar with the process of joining one. 

Keep your eye out for PEOs that have teams dedicated to the onboarding process. You’ll want a company that’s prepared to help you and your team get acclimated while making sure nothing slips through the cracks. 

How easy they make it matters, too. The simpler the process is for you and your employees, the faster you’ll be able to enjoy all the benefits of joining a PEO. For some, a simple process might mean easily accessible online onboarding with as much automation as possible. For others, working with people directly to onboard might provide the personal touch your company needs.

How Justworks Can Help

Justworks makes it easier to start, run, and grow a business. With a Justworks PEO plan, entrepreneurs and their teams get access to big-company benefits, automated payroll, compliance support, and HR tools all in one place. By combining the power of a PEO with expert 24/7 customer service and a simple and friendly platform, Justworks gives teams of all sizes the confidence to work fearlessly.

Still need convincing? Justworks was recently rated the best PEO provider for small businesses. Check out our site to get to know us for yourself and learn more about all the ways your business could benefit from partnering with us.