The Four Questions to Ask when Exiting a PEO

When a company feels they've outgrown their PEO, seen substantial rate increases, or lack promised services, they often become paralyzed with the notion of exiting. Learn the key questions to ask when considering a PEO exit.

1. What is the True Cost of Your PEO?

Understanding your total PEO cost is crucial for making an informed decision. Consider:

• Administrative fees (typically 2-3% of payroll)
• Benefit plan costs and markups
• Workers' compensation premiums
• Hidden fees and charges

2. What Services Do You Actually Need?

Not every company needs all PEO services. Evaluate:

• HR support requirements
• Payroll processing needs
• Benefits administration complexity
• Risk management requirements

3. Can You Get Better Benefits Elsewhere?

PEOs often limit benefit options. Consider:

• Current employee satisfaction with benefits
• Market alternatives for health insurance
• Flexibility in plan design
• Network adequacy for your workforce

4. What's Your Timeline and Transition Plan?

A successful exit requires careful planning:

• Contract review and termination requirements
• Employee communication strategy
• New vendor implementation timeline
• Data transfer and system setup needs

Making the Decision

After answering these questions, you'll be better equipped to decide if exiting your PEO is the right move. Remember that timing is crucial - many companies choose to transition at the start of a new year or during their benefits renewal period.

"The key to a successful PEO exit is thorough planning and partner selection. Companies often find they can achieve better service and significant savings with the right transition strategy."

— Brian Allen, President of EVCO Insurance Services

Next Steps

If you're considering leaving your PEO, EVCO can help you evaluate your options and develop a transition plan. Our team has helped numerous companies successfully navigate this process while improving their benefits and reducing costs.