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Case Study: Part 3 | 12 Common PEO Myths Debunked

Myth 9: Switching to a PEO is Too Complex and Cumbersome

Sometimes, a business owner may not choose a PEO because they believe switching to one will be too difficult, even though the business stands to gain from this potential partnership.

But this isn’t the case at all. Most PEOs have teams in place to help their new clients transition into the PEO relationship. These professionals help business leaders prepare for their implementation date and ensure that the process goes smoothly. These PEO professionals include individuals who specialize in:

 • HR management

 • Risk management and HR compliance

 • Payroll

 • Employee benefits

 • Client activation

 • New client on-boarding

And these PEO team members aren’t just there during the onboarding process. They stay connected once a business officially becomes a client and are always available to answer questions and concerns around a wide-variety of HR topics.

Myth 10: All PEOs are the Same

The PEO industry has seen incredible growth over the last 30 years. From 2008 to 2017 alone, the number of worksite employees (WSEs) employed by PEOsgrew at a compounded annual rate of 8.3%. This percentage growth in the PEO industry is 14 times higher than that of employment in the United States economy as a whole.

The success of the industry has led to an increase in the number of PEOs that operate today. But is it true that all PEOs are the same?

If you guessed that this myth is false, you are right! While there are numerous differences that can exist between PEOs, here are a few of the major differentiators:

• Is the PEO National or Regional

• HR technology offered

• The service model

• ESAC accreditation

• Certified PEO (CPEO) designation

While this myth has been busted, the list above actually leads us to our next PEO misconception...

Myth 11: ESAC Accreditation and CPEO Designation are Not that Important

In 1995, the Employer Services Assurance Corporation (ESAC) was formed to become the official accrediting agency of the professional employer organization industry. PEOs that are accredited by ESAC meet the gold standards for industry best practices and financial reliability.

Then in 2017, the Internal Revenue Service (IRS) began designating select PEOs as Certified Professional Employer Organizations (CPEO). This established another benchmark for PEOs to reach, and another assurance to companies who partner with PEOs that they are working with a best-in-class organization.

Both distinctions are important to PEOs and their clients and should be looked for when choosing a potential HR partner.

They provide business leaders with additional financial assurance and peace of mind, resulting in another debunked PEO myth.

Myth 12: PEOs Lack Transparency

A complaint that some business owners have is a lack of transparency that comes from working with a PEO. But is this myth fact or fiction?

The answer is that it depends on the PEO. Some may be less transparent whether it’s with their pricing, fees, or services, but others are the complete opposite with their prospects and clients.

This is why researching PEOs is important as it helps ensure that business owners find the perfect partner that is up-front with their solutions and fees. Working with your broker is also a great way to ensure you only work with a best-in-class PEO that can help your business and employees!

Don’t Believe These Common PEO Myths. Explore Them for Yourself!

Often, myths prevent business owners from choosing to partner with a PEO, even if this solution might be what’s best for the company.

That’s why it’s important for business leaders to research PEOs and work with their brokers to find the one that is best-suited for the needs of their business. When considering if a PEO is right for you, consider these myths busted!

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