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Choosing a Human Resources Consultant for Your Small Business

October 7th, 2021

The employment landscape is evolving more rapidly than ever. Tax laws, employment laws and healthcare requirements are constantly changing. In addition, the COVID-19 pandemic has shifted many companies into a remote working culture, creating new challenges to navigate. For many small businesses, it makes sense to work with a third-party human resources consultant who can ensure you think through all important considerations and remain compliant with the latest laws in your state.

Not all professional employer organizations (PEOs) provide comparable services. It’s important to do your research and make sure you find the PEO company that is the right fit for your small business. Make sure you consider the following factors when choosing a human resources consultant to partner with.

Experience Level of Your HR Consultant

Are you choosing an HR consultant whose team members are experts in their fields? Do they have the qualifications, background and experience to serve the specific needs of your business? When vetting the experience of a PEO company, it’s crucial to make sure they have the background to adequately handle the HR requirements associated with your company’s size and industry.

Make sure you choose an HR consultant that is familiar with the employment laws governing the states and cities where you do business. Without this specific knowledge and experience, the PEO company may not be able to provide you with the proper guidance you need.

Commitment to Customer Service

When comparing PEO companies, make sure you find one that offers the appropriate level of support that your business requires. Some companies are strictly web-based, delivering all of their services through an online portal. This may meet the needs of a company that simply requires a platform to manage the services and benefits they provide for their employees, but most businesses will need a greater level of support to adequately address their needs.

For HR consulting companies that provide greater levels of personal support, it’s still important to ask what this entails. Will you be charged extra to speak with a live agent, will you be directed to a call center when you have questions, or will you have a dedicated HR consultant assigned to your business who is available to assist you at any time?

One effective way to evaluate the level of customer service you’ll receive is to look at the PEO company’s staff support ratio. This refers to the number of team members the PEO company employs compared to the number of worksite employees it serves. Choosing an HR consultant that has one team member for every 2500 client employees will most likely have less time to address your needs than a company that has one team member for every 100 client employees.

Benefit Plan Options Offered

employee healthcare benefits offered by an HR consulting firmDoes the PEO company only offer health insurance plans from state-specific carriers? This may be fine if all your employees live in the same state and you have no plans to expand into other locations. However, if you have offices in multiple states or remote employees who live out of state, you need to make sure you work with an HR consultant that can provide you with access to health insurance carriers that cover individuals in every location where your team resides.

How Are Employee Benefits Funded?

It’s important to understand how health insurance benefits will be funded by the PEO company you choose. There are two different ways insurance plans are typically funded:

  • Fully insured group health plan – You pay a fixed premium to the insurance provider, and the insurance carrier is responsible for the payment of all claims. In this situation, the only financial obligation your company has is to pay the premiums for your employees.
  • Self-funded plan – Your company takes on the role of the insurance carrier, and you are responsible for the payment of all claims. In most instances, self-funded plans will have third-party administrators (TPAs) who oversee the plan administration functions typically handled by the insurance carrier when there is a fully insured plan.

There are two important considerations associated with self-funded plans. First, your business is taking on considerably more financial risk since you will be responsible for paying any claims. Second, you’ll need to make sure the TPA is authorized to do business in your state. If not, the PEO may not be able to adequately address the insurance needs of your employees.

Does the PEO Offer Employment Practices Liability Insurance (EPLI)?

Employment practices liability insurance (EPLI) is an important way to protect your business from serious financial damage in the event of an employment-related lawsuit. A wrongful termination claim or a lawsuit for failing to comply with laws such as the Americans with Disabilities Act can have devastating consequences to your business. EPLI coverage can mitigate that damage and ensure your business can survive the lawsuit.

Many PEO firms will offer EPLI coverage as part of their services. When comparing companies, make sure to ask about EPLI insurance, including how much coverage they provide. This will help you compare risk management benefits of the different PEO companies you’re considering.

HR Consulting Services Tailored to the Needs of Your Business

The services you need from an HR consultant are diverse, and they have a significant impact on the success of your business. It’s crucial that you choose a partner that can meet your needs. At Premier Employer Services, we customized our solutions to provide the specific support your business requires.

Our exclusive Elevated Engagement Plus Approach™ has been created with your needs in mind. Our HR consultants will spend time learning about your business in order to understand the specific challenges you face and identify the unique needs of your employees. We’ll collaborate with you to create a customized plan that addresses all of your HR needs. We can provide a wide range of services, including:

At Premier Employer Services, we understand the importance of prompt, proactive communication. We will always respond to you in a timely manner and help you navigate any HR issues as they arise. In addition, we can help ensure your HR policies evolve to address the changing laws and employment environment over time.

Contact us today to schedule a consultation. We serve small businesses in Denver and throughout Colorado.