TriNet has an attractive offering for very small businesses, which includes a flexible pricing structure and no long-term contracts. TriNet also doesn't have an employee minimum for service, so you can sign up for TriNet's PEO services no matter how small your business is. TriNet provides HR services, risk management, payroll software and benefits administration, which are all included in its PEO plan. Very small businesses can use TriNet's services to grow and offer competitive benefits and HR solutions to beat competitors. In addition to all these features, the TriNet representatives we interacted with were kind and helpful. For these reasons, TriNet earns our pick for best PEO for very small businesses.
Oasis Outsourcing is an ideal PEO solution for startups because of its pricing and contract structure. Oasis supports businesses of any size – it doesn't have an employee minimum, although your agreement structure may depend on how big your company is. While it does require a one-year contract, you can receive a full refund if you cancel your service within the first 90 days. Oasis is one of the only PEO services we reviewed with an offer like this. Startups are small and agile businesses, so Oasis' refund structure means that if anything changes with your business, it's easy to get your money back. Oasis also gives you the ability to mix and match services as you require – as your business grows, you can add or remove services accordingly. For these reasons, Oasis Outsourcing earns our pick for best PEO for startups.
Insperity's HR outsourcing services, risk management, payroll administration and employee benefit plans make it a great option for small business owners. Insperity provides a dedicated team to handle each area of the PEO service. A standout feature from Insperity is its employee training solutions. Insperity partners have access to thousands of online courses for HR topics and other educational materials. You can also set up onsite or online training sessions tailored to your business's needs. For these reasons, Insperity earns out best pick for PEO for small businesses.
Paychex is ideal for midsize businesses because of its scalability and the HR generalist the company provides to help you manage your services. The HR generalist remains the point person as your business grows and changes, which means you'll receive personalized coverage even as your business grows. Paychex is also accredited by both the IRS and the Employer Services Assurance Corporation, making it a leading player in the industry. Not all the companies we reviewed had this level of accreditation. Paychex represents thousands of employees and businesses of varying sizes, so you'll be joining a company that has the infrastructure to support your business as it grows. For these reasons, Paychex earns our pick for best PEO for midsize businesses.
ADP TotalSource represents more than half a million employees across the nation. It offers extensive services that are ideal for businesses of all sizes. What set this company apart from others we reviewed, however, was the attention to detail and support we received from its sales team. Part of our review process involves posing as small business owners shopping for PEO services for our business. ADP was one of the few companies that extended a service brochure to us. When we explained that we were looking at competitors, the representatives offered advice on what questions to ask and what services to look for in our search. This level of attention was unmatched by other sales teams we reviewed. TotalSource's friendly and helpful sales team, in addition to its robust PEO services, makes it our best pick for customer service.
Professional employer organizations work under a unique co-employment model to provide personalized services like health benefits and payroll processing to small businesses at low costs. The advantage to using a PEO as a small business owner is receiving corporate HR support and development and having the backing for Fortune 500-level benefits at low premium costs. The co-employment model is one where your employees are signed over to a parent company – in this case, the PEO – for legal and tax reasons. Don't worry, though – if you partner with a PEO, you still have full control over your business, important business decisions and your employees' day-to-day workflow. A successful PEO will take the white-knuckled, humdrum corporate administrative tasks out of your hands so you can spend more time doing what made you successful in the first place: running your business.
Before we dive into which PEO is the best for which type of business, it's important to consider some information about the PEO industry, what contract and pricing structures look like when partnering with a PEO company, and some important factors and questions to keep in mind in your search. If you already have a handle on a lot of this information, you can dive right into our best picks and reviews, both of which are listed below.
Pricing
Professional employer organizations offer two main forms of pricing: either per employee or as a percentage of your total payroll. There are advantages and disadvantages to both, and how each model measures up against the other will vary widely depending on your business, its number of employees and the overall structure of the plan. There aren't any free trials with PEOs, but you do work with a sales team before you sign up. This initial phase is a great time to ask questions and iron out the details of service and how they relate to your business.
PEO contract length and structure also vary by company. Make sure you choose what's best for your business – some companies offer long-term contracts only, while others don't require any contract at all. Cancellation policies also vary widely depending on the company and what plan you enroll in. Generally, you need to provide a 30- to 60-day notice before canceling your service. Some companies allow you to leave at any time for any reason, others will charge you a fee for leaving, and still others will give you a full refund if you cancel within a certain period. The cancellation policy is important to go over with the sales team before you reach an agreement – you want to be able to cancel the service if you need to. It's important to go over all this information with the sales team so you can understand how it relates to you and your business.
Negotiation Tips
In addition to pricing and cancellation information, there are a few things you should keep in mind as you search for the right PEO service. You should go over a lot of this information – while it may be available on a company's website – with a member of the organization's sales team so you can get a full understanding of the services it offers.
Additional fees: Make sure you ask the company upfront if there are any additional fees. Some companies charge for canceling service, for example. Make sure you thoroughly review the material the sales team gives you to spot any fees associated with service. If you're not sure, ask the sales representative. Also keep in mind that the cost structure, whether per employee or as a percentage of income, does not include additional costs for healthcare and other benefits plans.
Employee minimums: Many of the companies we reviewed required a minimum number of employees to offer PEO service – usually five or 10. As you browse PEO services, keep in mind that you may need a minimum number of employees to qualify for the PEO offering. If you don't qualify, a lot of companies offer ASO or HR outsourcing services, which may make sense for your business. Just be aware that, while these services may be similar to the PEO model, it is a different agreement.
Experts: Make sure the PEO service you partner with is providing you with a designated team of experts who can handle your HR, risk management, benefits and payroll needs. You want to partner with a company that provides specialists in each area, as well as a relationship manager to help you use all the services at your disposal. Sometimes the HR consultant doubles as a relationship manager, which is also a good option.
Plan structure: One final thing to pay attention to is how the company structures its plan. Some PEO services offer a one-size-fits-all solution, so you'll receive all your features for the same monthly fee. Others offer services that you can add and remove to tailor the plan to your small business's needs. There are advantages and disadvantages to both. A one-size-fits-all solution means you can grow into all the features without changing the pay structure, while an a la carte option is more personal to your business.
Our Methodology
We compiled a list of almost 60 PEO services by analyzing industry trends, considering companies featured on other review sites, reviewing top industry players and searching the NAPEO website. Once we established our main list of companies, we whittled them down to 35 companies for consideration by analyzing their small business services, establishing whether they were national PEOs, reviewing their accreditation and NAPEO membership, and grading their online presence.
From the list of 35, we chose 11 companies that stood out as industry leaders and wrote reviews. We picked these 11 companies by diving deep into their services and reviewing their HR, payroll, benefits and risk management offerings. We also established what kind of training resources and customer reviews the company had.
From the list of 11 companies we reviewed, we chose five that stood out as best picks for customer service, small business, startups, very small businesses and midsize businesses. We reviewed the 11 companies' pricing structure, contract requirements, online and mobile access, personalized experience, and standout features. We also tested their sales teams' customer service and feedback via email. Of the five best picks we determined, we dug even deeper into the customer service and features the plans offer. We spoke as small business owners with each company on the phone, establishing important features like plan structure and service cancellation. These five companies withstood each round of our testing and stood out in their customer service calls.
More than 150,000 small businesses partner with PEOs across the country to get high-quality benefits and proper HR support to keep their businesses running smoothly. There are more than 800 PEO services companies serving and operating in all 50 states. A PEO must adhere to both state and federal regulations, so some companies are divided up by region or even state. As you search for a PEO, make sure you keep your own state and region in mind – some PEOs are only qualified to serve small businesses in some states. Most of the companies we reviewed are qualified to offer coverage in all 50 states. If you're curious about whether a PEO operates in your state or not, you can look it up in the National Association of Professional Employer Organizations' directory.
A PEO differs from an HR outsourcing or administrative services organization because of its co-employment model. A lot of these companies offer ASO and HR outsourcing services for smaller businesses and can easily transition to full PEO services once your company gets big enough.
There are two main organizations that offer accreditation in this industry. The IRS offers PEO accreditation, meaning that the PEO in review has a healthy balance sheet and is capable, from a financial standpoint, of providing the services it advertises. The Employer Services Assurance Corporation also certifies PEOs, assuring the company's overall quality and ability to follow through on its offerings. Only 5 percent of PEOs are accredited by the ESAC. Not every company we reviewed has accreditation, but all our best picks are accredited by both the ESAC and the IRS.
Common PEO Service Questions & Answers
Have a professional employer organization (PEO) service question of your own?
There is no magic number when looking at hiring HR. You will experience pressure points that will let you know when it is needed. Some of these pressure points might be that you need employee manuals or handbooks that define the companies policies and procedures. Other pressure points might be a wrongful termination suit, pay inequity, harrassment claims. If you are in a growth mode you will want something or a process that is scalable.
I have several clients that have hired my services...
I work with hundreds of startups in the Boston area. TriNet is a preferred vendor due to the fact that we aggregate our entire client base, which makes up over 240,000 employees, giving us buying power with our carriers and the ability to price below the open market.
We provide payroll, HR, workers comp and benefits to all of our clients under one umbrella. You are able to contribute any $ amount for benefits that the company is willing, but the employees will also have a full suite of...
Also remember that benefits are not just insurance. I've worked at companies that do random prize draws, group dinners out, offer free services (like help quitting smoking, inexpensive daycare) or college tuition assistance.
Free coffee is good, too.
I think people that choose one of the big guys do so because they are a known quantity. The smaller companies don't have as many reviews, and in some cases, can't provide all the services that are needed. They don't know what they are missing, as many clients go back & forth from ADP to Paychex because of problems.
Our cloud based solution combines a powerful payroll & a web-based HR application along with the convenience of services typically offered by payroll outsourcing providers. ...
Certainly Health insurance. You could consider Dental, Life, Disability, short and long-term. If you want to be different there is prepaid legal coverages. Depending on the age of the group there could be other coverages like long-term care also.
The Health and Dental are the most common.
Bravo that you're thinking this through! Gusto/Zenpayroll is a great option but does need to be monitored by a trained payroll eye, I've found two mistakes already with year-end filings with clients that I manage with them. I am happy with them otherwise, though, it's a great solution. Your tax accountant can advise you on reasonable salaries as well as draw structures that won't overdraw the basis and trigger capital gain. I've written a blog post in this same...
