Should My Company Begin Investigating a Possible PEO Change in 2026? Some Springtime Guidance for CFOs

Effective business financial planning requires frequent consideration of company costs. And of course, one significant, yet critical cost for many small enterprises is staffing, which often includes professional employer organization fees. 

At the same time, the number of PEO options continues to expand. According to the National Association of Professional Employer Organizations (NAPEO), there are currently 523 PEOs within the United States. 

So how do you know if your current HR partner is the right one with so many services to choose from? Additionally, what should a company leader consider when deciding whether to make a switch at the start of the next calendar year or even sooner? Here’s a little springtime guidance for CFOs to help you make a fully informed decision over the next few months.

Prioritize Your Needs

All businesses are different. With that being the case, what’s the most important factor for you? Do you primarily require select core services, such as payroll and benefits or do you need additional HR and business assistance? A good first step is to prioritize your needs to ensure your current PEO still aligns with those company priorities.  

The importance of Reducing Costs

Of course, one of the primary considerations for any CFO within a small business is value for money. For this reason, cost may be at the top of your previously mentioned list of priorities. Every company that has a multiple-year PEO contract should regularly assess current rates. If your costs are rising, as they often do, we encourage an investigation to look at other possible options. You may be surprised by how much money you can save.

Business Sector Considerations

With hundreds of PEO providers in the marketplace, it should come as no surprise that there’s a significant amount of specialization. For example, there are PEO’s dedicated to serving the construction industry, meaning they are deeply familiar with all that sector’s unique attributes. There are also PEOs that cater to high tech companies. If you work in a major industry, consider whether you would benefit from a partner with a deeper level of expertise in your distinct business area.

Medical Insurance Considerations

Of course, many companies hire a PEO in order to provide affordable healthcare for their employees. Therefore, company leaders are frequently worried that a PEO change will also require a significant alteration of staff insurance options, leading to employee angst and perhaps even company departures. This is where a PEO broker can really help out. A good broker can help prioritize a relatively seamless health benefits transition for staff, allowing employees to maintain the same or comparable coverage.

Where Are the Gaps?        

Do you need help with certain aspects of your business that your PEO doesn’t currently provide? Perhaps you require assistance with state and federal compliance issues? Or maybe your entire staff works remotely, meaning their needs vary from companies where employees are on site daily.

Technology Considerations

When it comes to HR-focused technology needs, there are plenty of options. For organizations with employees that are fully connected and highly mobile, some PEO’s offer phone applications for payroll, timekeeping and other critical functions. In other cases, companies may prefer the ability for employees to call a service center to address their specific needs.

Clearly, there are a lot of things to consider when determining whether to locate a new PEO partner to fulfill your HR needs or stick with your current provider. But one thing is for certain, shopping for a new PEO is no easy task and all companies can benefit from a little expertise and assistance in locating the best fit for you.