Moving Away from a PEO – a Case Study in Saving $150,000 the first year

by | Aug 18, 2020 | Human Resources Consulting

  • Integrity HR

Moving Away from a PEO – a Case Study in Saving $150,000 the first year

Recently, a client located in Georgia came to Integrity HR with what seemed to be a simple request:

Would you help us determine if ADP Total Source was the right HR outsourcing model for our business?

Why did they come to us? Well, this business had been using ADP’s Total Source service for human resources consulting, workers compensation, employee benefits, and payroll for well over 10 years. And as their Company grew, the service cost seemed to only increase year over year. The Company wasn’t sure how much they were paying for each service, and wasn’t confident they knew what services they should be receiving, because this program with ADP was “all bundled together.”

For this business, it was clear that exploring how to “move away from a PEO” (Professional Employer Organization) was part of the question. That’s why they came to Integrity HR for help.

Determining the Value of HR Services from a PEO

Unbundling a PEO isn’t so simple, and learning about service levels for human resources consulting servicesoutsourced human resources, employee benefits, and the likes takes some time to really evaluate.

Over a 45-day period, Integrity HR’s consultants were able to conduct a needs analysis for the client, review the client’s current services, then take all the bundling of the PEO services, unbundle them, and save this Company $150,000 in the first year, according to the CFO. Integrity HR helped this client find all the right vendors, giving them control over decisions, costs, and maybe most important – removing the “co-employer” relationship.

This is just one case study of numerous migrations away from a PEO service, where businesses turned to Integrity HR to help make informed decisions about HR costs, value, and spending. In this case, Integrity HR was able to identify significant opportunities to add a substantial savings to the bottom line.

In this example, in the end, the client successfully migrated from a PEO to an “unbundled” service model with vendors they trust and minimal disruption to the organization. Once the transition was complete, we trained employees on the new systems, updated the employee handbook based on new policies and procedures, and continue to manage the ongoing relationships with each service provider – while Integrity HR served as the “full service” HR Department.

By taking a detailed and complex problem and applying a simple but thorough solution, Integrity HR unbundled and ultimately did what was best for their team and the people they serve.

Is Unbundling from a PEO Right For Your business?

There are many different reasons companies choose to move away from a PEO.

Many PEO’s focus on compliance and risk—and sometimes not people, employee engagement, or company missions and goals. They may be ideal for small organizations with less than 10 employees, but businesses with larger workforces may need a more customized solution than what a PEO provides.

Depending on your industry, customer service expectations, and personalized service, carefully evaluating what a PEO gives you is important.

In some cases, keeping your HR, benefits, workers comp, and payroll all bundled together and “sharing” employment responsibilities may make sense financially and from a service standpoint. However, knowing what you’re paying for, and being able to measure your costs and service expectations is important for the savvy and prudent business professional.

Just remember, if you’re using a PEO, or thinking about it, it is critical to look at the bigger picture, be sure to work with a professional team who can put together a detailed transition plan that covers tasks that aren’t even on your radar.

HR isn’t “one size fits all” for every organization, so don’t expect that unbundling from a PEO will initially fall into a nice, neat, and organized fashion – that’s why working with experienced HR consultants to create a solid migration plan is critical for your success.

Our HR consulting team creates customized HR programs, evaluates benefit strategy and spending, and brings partners to you with great packages … so that when unbundling makes sense, HR can provide a great end user and employee experience.

Are you ready to determine if your PEO is really working for your business? Let Integrity HR be your partner! Get the conversation started by filling out this form.

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