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Need advice on new PEO

Bola Sogade's Profile

Can someone please advise me on a PEO to join. My company has used ADP Total Source. We joined with a total staff strength of 51 employees and had a very very bad experience especially with the ADP Total Source employees. The products promised were just not delivered. I think the PEO model works but having people that actually work with you is very important. Thank you.

Answers

Topic Expert
Keith Perry
Title: Consulting CFO and Business Operations A..
Company: Growth Accelerator
(Consulting CFO and Business Operations Advisor, Growth Accelerator) |

Bola,

Are you looking for a true PEO, or just an integrated services provider? With 51 employees, some of the benefits of doing the PEO route are diltuted, and it becomes pretty expensive (my personal cut-off for going in house is around 20 people).

That being said, Tri-Net is the big dog in the game. There are smaller regionals (basically accountants who have moved up). I was associated with TeamWorks in the bay area that does such stuff, and I'm sure that there are some local to you where you'll get the personal touch.

Finally, there are the newer services like Emplicity and NetPEO that seem more competitive...although I can't comment on their service vs. ADP.

Cheers,

KP

Topic Expert
Doug Devlin
Title: Doug Devlin (CEO at Zuman) expert
Company: Zuman
(Doug Devlin (CEO at Zuman) expert, Zuman) |

Bola,

While some in the PEO industry do have larger clients, the average, when I was chairman of the industry accounting practices committee, was 22 employees. That gives you an idea of the size (and sophistication) of clients that are using the service. No doubt they add value especially for small companies. The economics of the PEO's model are also partially driven by the fact that they can not unbundle HR compliance due to their being a co-employer. As a result the model typically doesn't work for larger employers especially for those over 50 employees. You may want to consider providers that can provide the infrastructure you need without the co-employment model.

Bests,

Doug

Ken Niewald
Title: Interim/Project CFO
Company: Various
(Interim/Project CFO, Various) |

Bola,

Adding to Doug Devlin's point, consider bringing your staff in house and outsourcing the HR functions. This will give you more control and flexibility as you grow. I worked with a top line firm in the SF Bay Area (Centricity-Solutions.com). Excellent outsourcing service in this function requires that you have a local contact for site visits, so I would look for a similar firm in your geographic.

Best,

Ken

Virginia Clarke
Title: Director of Finance
Company: The Intelligence Group, LLC
(Director of Finance, The Intelligence Group, LLC) |

My company also did not have a good experience with ADP TotalSource, they absolutely oversold and under delivered. We have recently partnered with Insperity and we are off to an excellent start, I highly recommend you add them to your search. www.insperity.com

James Smith
Title: CFO
Company: MOGL
(CFO, MOGL) |

Bola: We have used 3 different PEOs at our company (45-65staff), including Totalsource which was a nightmare.

Typically I just read these boards and don't participate but I feel so strongly that the PEO model is broken that I wanted to share that with you.

For 50 employees your looking at 60-80K a year in additional fees which is way more than you would pay a part time HR consultant. You can probably get cheaper benefits too by going through a good insurance broker.

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