You may have staff who are so tired of human resources issues that they want to outsource some or all of their employees.
One way to give those people relief is to hook your organization up to a good HR provider –a Professional Employer Organization (PEO). A PEO will take care of your payroll, benefits, employer compliance and other HR needs.
But finding the right PEO is easier said than done. Here are 7 ways to separate the wheat from the chaff.
1. Make sure the price makes sense.
In the HR outsourcing market, a price that looks too good to be true probably is too good to be true. A provider that advertises unrealistically low initial rates may increase its rates 6 months down the road. More likely, the profit margin is in there somewhere, just hidden from you.
2. Find an HR provider with a benefits package designed especially for workers who also resemble your current workers.
A company that mixes your healthy, well-behaved talent with other employers’ hard-living riffraff almost guarantees that your health insurance and workers’ comp rates will skyrocket.
Along the same lines, even something that sounds as if it ought to be pretty basic, such as payroll, ends up working much differently for some types of workers than for others. Payroll for a successful vice president will not be the same as payroll for a minimum-wage factory worker.
3. Demand a solid benefits package.
To make the cut, HR outsourcing candidates should offer a benefits package that:
- Provides coverage for new hires soon after they start working.
- Has no pre-existing condition exclusionary clauses.
- Contains no individual underwriting.
- Offers guaranteed issue coverage.
4. Look for a quality provider network.
Your employees need an HR provider that has a stable health care provider network and modern administration systems. A multi-state solution may also be important to you.
5. See if the HR provider employs solid professionals in its own organization.
Does your potential provider have the expertise to deploy human resources managers who understand the needs of your specific industry? Are they credentialed?
6. Opt for a provider with a brand-name, Web-enabled human resources information system.
Web tools may seem like a bell and/or whistle right now, but they could be a godsend some late night when your HR manager, really, really needs specific personnel information.
7. Ask for references.
Of course. But someone should actually check the references. Can the firm provide valid contact information?
By carefully examining the HR provider’s Best Practices in regards to payroll, benefits, and the kinds of workforces it serves, you’ll be able to evaluate the provider for what it really is. Then, and only then, will you know if the organization can protect and service your business for the long term.