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How to Choose a PEO Service for Your Business

One of the most important components of your business are the people that work for you and the people that work with you. When you are choosing a PEO company, you may find it challenging to choose which one is going to be the best fit for your needs. Finding the best PEO companies in Texas can be a process, but in this article, we will show you how to do it.

Assess Your Needs

Before you start looking for a  PEO, you need to know what you need. If you go out looking for a PEO without knowing specifically what you need, you could end up with a bad match that would keep you from getting the best results for your company. Write down your goals and see what services would solve the problems keeping you from getting to those goals.

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Figure out what level of support and involvement you want from the PEO company. Do you want the PEO to take over all day to day operations of your HR department or only sections of it? When you are speaking with each company that you interview, you should show them exactly what you want and see if they have options to give it to you.

Once you have your needs figured out, you will be able to go out and begin the hunt. Don’t skip this important part because if you don’t know, you are likely to be upsold into things that you don’t need for your business.

Are They Certified?

There are two voluntary certifications/accreditations that you need to confirm the PEO holds or is applying for. These are the ESAC and the IRS certification. The ESAC is similar to what you are used to with banking and FDIC. PEOs with this accreditation are audited independently and held to high standards. Every quarter, they undergo independent financial audits to confirm their good financial standing as well as compliance with regulations. Your business will be partnered with a financially stable PEO, and payroll dollars are bonded in case of failure financially.

PEO Certified

Now you can see why it is important they have the ESAC accreditation and the second certification offered by the IRS is the Certified Professional Employer Certification. What this means for your business is partnered with a PEO that have already paid their Federal taxes year-to-date. What the statement above means is that there will be no additional taxes due if you consider to partner with the PEO.

Resources Available

When you part with a PEO, you want to make sure that there are enough resources available to help you when you need it. Ask questions about who will work with you if you have a question or challenge. Find out if they are going to allow for phone calls directly to your point of contact if you need to go through a ticketing process or what way they will require you to work once you have partnered together.

Asking the pressing questions before you sign on the dotted line is a must. After you have gotten into business with a PEO, you don’t want to have to go through the process of looking for another one. Make sure that you make a wise choice the first time, so you don’t have to go through this again.

Check Experience

Another thing you need to do is check their experience. See what companies they have worked with, what their experience has been and if any of the companies they were with were similar to yours. If you can find a PEO that works in your industry and has worked with companies around your company size, this is ideal. When you find a PEO with these criteria, you are going to know that they understand your business needs.

Is the Decision Financially Wise?

If you find your dream PEO, you still need to look at the price tag. If the move doesn’t make sense financially, you need to do the right thing and look for another good choice. Even if a PEO company is a good fit for the other criteria, if they don’t fit your budget, they have to go.

Most PEOs you come across base their fee on a percentage of payroll. If you have a salary powered workforce or sales team you are going to be paying more as your employees get commissions and bonuses. This option is usually best for lower payroll burdened companies that have a high number of hourly workers or part-time employees. For these business models, it makes sense, but not with the model above.

Other PEO companies will do a flat rate per employee fee. If you have a salaried employee, this fee structure makes the most sense for you. You’ll have free reign to reward your employees without having to worry about being hit with additional fees.


Working with a PEO is a great opportunity to grow your business and to make your business stronger according to NAPEO, being able to provide a stronger business and potential for greater growth without having to add more work to your plate is a good opportunity to work on more company growth.

Choosing the right PEO for your business is important so don’t feel like you have to rush in your decision. You and any business partners that you have should agree on the benefits of the specific PEO that you have chosen so that you can move forward as a team without any challenges.


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