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4 Things to Consider when Leaving a PEO

Many businesses utilize Professional Employer Organizations (PEO) when starting out to gain HR services such as benefits and payroll. However, many businesses have found themselves outgrowing the PEO model and are looking for a more customized solution.

If you’re outgrowing or are frustrated with your current PEO and ready to look for alternatives, there are several things to consider up-front so you’re prepared for the change.

1. When To Start Looking for Alternatives

Leaving a PEO is time-sensitive and not something to take lightly. Because organizations find themselves dependent on the PEO, you want to give yourself adequate time to properly vet and find your new partners or develop internal systems. It is recommended to begin the search 3-6 months prior to your desired effective date. Luckily, with 19:21 Consultants and 19:21 HR, we are here to help you handle your benefits transition and HR support needs.

2. Insurance Effective Dates

As you begin to discuss PEO alternatives with other HR outsourcing companies and benefits brokers, it is important to ensure you and your employees won't experience a gap in coverage and services. With health insurance, it is key to ensure your employees do not go uninsured during the change. As you begin to work with insurance brokers, verify that they are able to install coverage the first of the month after leaving your current PEO.

Policies like Workers’ Compensation & Employers’ Practice Liability Insurance (EPLI) can be easy to forget but are vital to protecting the company. EPLI can be purchased voluntarily outside of a PEO and can be very useful.

3. Employee Impact

When changing things like onboarding processes and employee benefits administration, it is important to make sure that your team is aware of the changes. Without intentional communication, any change can be seen as a negative and cause disruption. With a move to a PEO alternative program, employees might also experience a change in insurance carriers. Choosing a partner that has experience with these transitions can make a large difference.

While leaving a PEO can be daunting, if you know that the model is no longer beneficial to your organization it is time to get out. However, you do not have to make the switch alone. 19:21 is here to help ensure the transition is smooth for both your business and your employees.

4. Slowing Down to Speed Up

Often what draws a business towards a PEO initially is its promise to be a one-stop shop for business solutions. As a result, it often takes time and energy to pull away the PEO model and establish processes in-house, in order to be more scalable.

In some cases, your business might have developed an in-house team to handle the majority of those needs. However, many businesses find themselves needing direction and guidance to ensure employee needs are met and compliance is intact.

Finding the Ideal Alternative

As you navigate through this transition, you must find a partnership that will help foster the growth of your business rather than keep you stationary like most PEOs do. Developing a strong relationship with a brokerage firm and/or HR consulting business can give you the leg up when leaving your PEO.

Over the years, 19:21 Consultants and 19:21 HR has been able to help many businesses navigate the transition with our PEO Alternative. 19:21 has also developed strong relationships with local 401(k) providers, payroll companies, and property and casualty insurance brokers to provide a true PEO alternative.

You don’t have to do this alone. 19:21 has a team of industry experts that are ready to help you save your business money and continue to grow.


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