Jacksonville, FL 6/4/2012 11:48:33 PM
News / Business

Compare PEO companies before partnering with one

Review PEO Quotes at PEOComparison.com

Professional Employer Organizations, or PEOs, came into being in the 1980s when the economy revived from the stagflation of the late 1970s and started a long expansion. Companies large and small were feeling their oats and readily signed on when PEOs called and promised to relieve them of some management headaches. Today, several hundred—an estimated 700—PEOs operate in the U.S.



This year and next could be a shake-out period for the industry as health care issues continue to evolve. If the Affordable Care Act is deemed unconstitutional, the organizations will have to re-adjust their approach to handling health insurance as Washington wrestles with a successor policy. If the Justices uphold the health care law, PEOs still face a difficult period as the law is phased in and companies come to grips with rising costs associated with it.


So how does a firm looking for a management partner compare PEO companies in a period of flux? The answer is, the same way choices are made any time: by scrutinizing track records, evaluating services offered, and contacting executive offices of clients for unfiltered feedback. The goal should be to find a good match for a business because, while professional employer organizations are essentially the same, they differ considerably in specialization and expertise.



A Florida PEO might be the option for your firm, but there are so man choices. The industry handled some $25 billion in payroll in the state in 2010 for some 69,000 companies. Those are impressive numbers, almost as impressive as the growth in them from 2005, when the figures were $17 billion in payroll and 50,000 companies. According to the Florida Association of Professional Employer Organizations, 700,000 employees are overseen by PEOs in the state.


The major players in the industry have been around for more than two decades and operate in many states. They seem to thrive on serving small and medium-sized companies, so small business owners shouldn’t be shy about considering partnering with one. But owners should be smart about evaluating first and asking around for recommendations—and even checking with authorities for any record of poor business practices. A thorough effort to compare PEO companies can lead to a satisfying decision.