We often see businesses outgrow a PEO’s HR capabilities, get discouraged with high renewal rates, and become frustrated with an impersonal service delivery model. There are alternatives available that with coordinated effort and the right guidance can set up a business for more independence, internal competencies, and long-term growth. As business consultants, we sit at the table with our clients to explore and evaluate options and then plan exiting a PEO.
Alternatives to a PEO – a Collaborative Partnership
The option of exiting a PEO sounds scary, but when planned and executed properly with the right partners, it can result in not only cost savings, but a deeper engagement level with advisors that get to know you, your team, and your business.
Result = You’re not just a number.
The Benefits of Unbundling HR, Payroll, and Benefits:
HR:
- Tailored HR that fits your business culture from compliance to strategy whether in one state or multi-state locations.
- A partner that knows you, your team, and your business. A relationship built on trust.
- Entire team of HR professionals with HR Generalist to Director level competencies.
- Strengthen influence and development of leadership.
- Clear, simple, and transparent pricing.
Payroll:
- More responsive and specialized customer service.
- Attention to complex/specific needs including payroll nexus requirements in different states.
- Clear pricing structure based on employee count and pay schedule.
Benefits:
- More control and flexibility to customize an employee benefits program.
- Greater transparency and access to claims history for negotiation.
- Ability to negotiate in the marketplace and select options such as self-funded or employer managed solutions.
8 Steps to Successfully Transition From a PEO
For an organized and successful exit, clear and coordinated communication between your new HR, payroll, and benefits partners and your internal business and management teams is vital. This involves meticulous planning and coordination to avoid disruptions in payroll processing, maintain compliance with employment laws, and ensure employees continue to receive their benefits seamlessly.
Achilles Group provides planning and support through this transition:
1. Gather and Securely Store All Employee Information
- Personal Information: Employee identification and contact information.
- Compensation Details: Employee contracts and compensation information.
- Tax Information: Employee tax forms and payroll documents.
- Benefits Information: including financial balances, HSA, FSA and PTO balances, along with leave of absence history.
- Performance Records: Performance evaluations and termination records.
2. Identify Replacement Services
- Payroll Administration: Managing pay, paychecks, deductions, adn tax withholdings.
- Benefits Administration: Handling employee benefits.
- Tax Withholding: Ensuring accurate tax deductions.
- HR Advisement: Strategy for compliance with profitable outcomes.
3. Research and Engage Benefits and Insurance Providers
- Health Benefits: Comprehensive healthcare plans.
- Dental and Vision Benefits: Essential for employee wellness.
- Disability Insurance: Protecting income in case of disability.
- Workers’ Compensation Insurance: Covering workplace injuries.
- General Liability Insurance: Safeguarding against legal claims.
4. Communicate with Employees
- Make sure to provide ample notification of the change and communicate your reasoning, stressing positive outcomes for both employees and your business.
5. File your EIN for Taxes and Payroll as the Employer of Record
6. Prepare Foundational HR Framework
- Build new hire documents (W-4’s, I-9’s, benefit elections, direct deposit information).
- Design, build, and roll-out new employment policies and handbook and HR processes which are tailored to your business and workplace culture.
- Onboard new partners and technologies (HRIS).
7. Terminate PEO and Re-hire Your Employees
8. Continue On-going HR Support
- Continue receiving broad and deep HR support with a strategic advisor to strengthen workplace culture, attract and retain talent, mitigate risk, and develop leadership.
Result = More Profitable Outcomes
Navigating the transition away from a PEO can seem daunting, but with the right partners and strategic planning, it opens the door to greater autonomy, tailored support, and long-term growth. By unbundling HR, payroll, and benefits services, businesses not only gain cost transparency but also cultivate deeper relationships with dedicated advisors who understand your unique needs. Achilles Group excels in guiding business leaders through this transition, offering comprehensive support from developing transition plans to ensuring compliance with complex employment laws. By working with your management team, your business can strengthen internal competencies and leadership, ensuring you’re well-positioned for sustainable success.
Embrace the opportunity to move beyond being just a number and experience the true value of personalized service and strategic growth with Achilles Group.
