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Answers to Common Client Questions About PEO Transitions

Broker and clients discussing their PEO transitions
Listen to the article: Answers to Common Client Questions About PEO Transitions
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Switching to a PEO can be a great step for your clients’ businesses, offering numerous benefits and streamlining operations.

While the PEO handles much of the transition, it's natural for business owners and their teams to have questions along the way. As their trusted advisor, you can provide guidance to make the process as smooth as possible.

This guide will walk you through some common questions that may arise during a PEO transition so you’re prepared to offer the support they need.

What a PEO Transition Looks Like

If your client decides to proceed with a PEO transition, daily operations may shift significantly. The PEO will take over most administrative tasks. The benefit is that the business owner will have far more time to focus on core activities. The downside is the sense of losing control that can trigger anxiety in some business owners. Here’s what to have your client prepare for.

Key components of PEO transitions include:

  • Co-Employment Arrangement: Establishing a legal relationship where both the business and the PEO share and allocate certain employer responsibilities.
  • Administrative Shift: Transferring HR tasks like payroll processing and tax filing to the PEO.
  • Integration of Systems: Implementing new HR technologies provided by the PEO for better efficiency.

This transition aims to streamline processes, reduce administrative burdens, and ensure compliance with employment laws. It's a strategic move that can lead to cost savings and improved employee benefits, but it requires careful planning and communication to execute successfully.

Common Client Questions About PEO Transitions

Though each of your clients will have unique reasons for PEO transitions, there will be similar concerns across the board. Here are 5 common questions you’ll face and how to handle them.

How Will a PEO Transition Affect My Employees?

Employers will likely worry about employee concerns such as paychecks, benefits, or even job security. The key here is reassurance. For experienced PEOs, the transition should be quite seamless.

  • Payroll will continue as normal, often with increased accuracy due to the upgrade with the PEO’s software.
  • In terms of benefits, employees may gain access to a wide array of new options at potentially lower costs thanks to the PEO’s operational efficiencies.

To help spread the message and ease concerns, you could recommend that your client host a Q&A session or send out a detailed informational packet. Remind them that transparency is the key to employee trust, so the more communication they can muster on this subject, the better off they’ll be.

What Changes Will the Business Experience During a PEO Transition?

Remind your clients that they’ll notice decreased administrative responsibilities as the PEO takes over tasks like payroll management, tax filing, and benefits administration. This will allow them to focus more on core business activities rather than getting bogged down in paperwork.

Let them know they can expect dedicated support as they get used to their new HR and payroll software. Make sure they have the numbers and names of contacts they need in case a question arises.

What Are the Costs Involved in a PEO Transition?

Costs usually encompass administrative fees, which might be calculated as a percentage of the total payroll or as a flat fee per employee. While these fees represent an added expense, it is crucial to emphasize the overall value and savings a PEO can provide.

When discussing costs with your clients, highlight potential savings such as:

  • Economies of Scale: Access to more affordable benefits and insurance options due to the PEO's larger negotiating power.
  • Reduced Overhead: Decreased expenses on HR personnel and administrative tasks as the PEO assumes these responsibilities.

Encourage your clients to conduct a comprehensive cost-benefit analysis. Many businesses discover that the efficiencies gained and the reduced liabilities offer a strong return on investment. Remind them that it's not just about the upfront costs but their company's long-term financial health and growth.

How Long Does the PEO Transition Process Take?

Your clients may be curious about the timeline for PEO transitions. The timeline will vary based on factors like company size, the complexity of existing HR systems, and the promptness of information exchange.

To assist your clients in expediting the transition, advise them on the following:

  • Preparation: Encourage them to gather all necessary employee data and company documents beforehand.
  • Effective Communication: Stress the importance of maintaining open lines with the PEO's transition team to address any issues quickly.
  • Staff Training: Suggest allocating time for their team to become familiar with new systems and procedures introduced by the PEO.

By proactively guiding them through these steps, you can help your clients experience a smoother transition. Remind them that while the process requires effort, it's a temporary phase that leads to enhanced operations and efficiencies in the long run.

How Secure Is My Data with a PEO?

Data security is a frequent concern for your clients when considering a PEO partnership. You can reassure them that reputable PEOs prioritize data protection through robust security measures, such as advanced encryption technologies, secure servers, and regular security audits.

Inform your clients about the PEO’s data protection policies, disaster recovery plans, and third-party certifications.

By addressing these concerns upfront, you help your clients feel confident that their company's data will be in trustworthy hands. This allows them to focus on the strategic advantages of the PEO transition without worrying about data security issues.

How BBSI Streamlines PEO Transitions

If you believe a PEO could be the right fit for your clients, you can help ensure a smooth transition by being prepared to address any questions they may have.

Partnering with an experienced PEO like BBSI is key to a seamless transition.

What sets BBSI apart from other PEOs is our personalized approach. We pair each business with a team of local professionals who take the time to understand the business, its goals, and how to provide the best possible support. This attention to detail ensures a smooth and positive PEO transition experience.

Learn more about how to become a BBSI referral partner and start offering streamlining, specialized PEO support to your clients.

Disclaimer: The contents of this white-paper/blog have been prepared for educational and information purposes only. Reference to any specific product, service, or company does not constitute or imply its endorsement, recommendation, or favoring by BBSI. This white-paper/blog may include links to external websites which are owned and operated by third parties with no affiliation to BBSI. BBSI does not endorse the content or operators of any linked websites, and does not guarantee the accuracy of information on external websites, nor is it responsible for reliance on such information. The content of this white-paper/blog does not provide legal advice or legal opinions on any specific matters. Transmission of this information is not intended to create, and receipt does not constitute, a lawyer-client relationship between BBSI, the author(s), or the publishers and you. You should not act or refrain from acting on any legal matter based on the content without seeking professional counsel.

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