National PEO or a Regional PEO – Which to Choose

Let’s face it: technology is unreliable. When our temperamental electronic devices break down, we are invariably forced to confront one of the two salient options available to the everyday consumer: call the toll-free “help hotline,” knowing full well that we might be forced to wait hours, even days, to speak with an outsourced foreign representative with an almost certainly limited English background; or hire a local neighborhood techie, garnering acceptable (even exceptional) customer service, but at the often unacceptable cost of a chunk of our wallet.

Enter the PEO, or professional employer organization, available at the regional PEO or national PEO level; all PEOs gear their business plans towards accommodating the small business owner by establishing a solid partnership with mutually beneficial priorities. The goal of the relationship is to let each individual party specialize in specific areas. A traditional co-employment relationship consists of the employer being responsible for worksite conditions, day-to-day operations, and determining the employee’s role. On the other hand, the professional employer organization on the regional or national level is held responsible for payroll taxes, rules and regulations, worker’s compensation, and in some cases the hiring and termination process. In any case, there comes a time when any respectable employer must stop and ask him or herself whether he or she should contract with a regional or national PEO.

Yes ladies and gentlemen, there is a difference. Think of the seemingly out-of-place first paragraph as an extended metaphor. The national PEO is like the overseas vendor - efficient, effective, and usually economical, but not necessarily personal. Like the municipal technology associate, the regional PEO provides convenient, helpful, and empirical service but charges for the added services rendered. However with the regional PEO you most likely will be able to call the PEO CEO directly, unlike the national PEO.

It is important to remember that PEOs are valuable for different reasons at these different levels. In terms of customer service and “personability” as discussed earlier, the capability of local offices to call or even visit the employer’s office is unmatched. Yet, many national PEO companies branch out and establish regional offices, thus, countering this advantage.

Due to their extensive size and resources, national PEO companies usually tend to have enhanced technology for benefits and payroll administration over the regional PEOs, as well as access to online training resources. Additionally, these vendors might have access to multiple benefit carriers like United Health Care, Blue Cross Blue Shield, or Aetna. The national PEO will tend to have more employees and capital available, so they are able to work on many different projects at once.

However, bigger is not always better. Local PEOs tend to be more up-to-date on state legislation and regulations than their national counterparts. Whereas the national PEO may have multiple states occupying their attention, the regional PEO have only one to consider.

In any case, there is no qualification, capability, or service that ennables one professional employer organization over another in the PEO ‘hierarchy’. The quality of any given PEO cannot be assessed according to an authoritative set of criterion; but rather its merit must be evaluated according to a case-by-case basis. A PEO is only as valuable as its ability to accommodate your small business needs. Because all businesses operate differently, it is important to do your homework to find the right PEO for you. The line between ‘national’ or ‘regional’ entities is blurred, for such general distinctions hold little import. Each business has different requisites – and there’s always a PEO for that!