How Long Does It Take to Change Your PEO? A Practical Guide

I often get asked, "How long does it take to change our PEO?" Many companies reach a point where they're completely dissatisfied with their current PEO due to unresolved customer service issues or other challenges. If you're in this situation and thinking about making a change, here's a practical guide on how to do it effectively.

Realistic Timelines for Changing Your PEO

Changing your PEO isn't something that can typically happen overnight. While you might want to make the switch today, a realistic and smooth transition takes time. Here's a breakdown of the steps and the timeline you should consider:

Initial Planning and Quoting (15 Days)

• Getting Quotes: It usually takes about 5 to 10 business days to receive quotes from potential new PEOs. During this time, you'll go through demos and perform due diligence on their health plans, workers' compensation policies, and other offerings.
• Proper Diligence: Ensuring you fully understand and compare what each PEO offers is crucial. This initial phase should take at least 15 days if you're running a tight and efficient process.

Providing Notice to Your Current PEO (30 Days)

• Notice Period: Most PEO agreements include a 30-day out clause. You'll need to notify your current PEO of your intent to leave at least 30 days in advance unless your contract has special conditions like a rate lock or other negotiated terms.
• Contract Review: Review your contract to understand the notice requirements and any penalties or conditions that might apply.

Optimal Timeline: 60 to 90 Days

• Comprehensive Transition: Ideally, you should plan for a 60 to 90-day timeline to ensure a thorough and seamless transition. This allows ample time for all necessary steps, including planning, quoting, notice, and onboarding with the new PEO.

Expedited Process with Professional Help

• Brokerage Assistance: Working with a brokerage experienced in handling PEO transitions can significantly speed up the process. An expert can understand your needs quickly, make internal calls to expedite quotes, and push through any internal PEO processes that might cause delays.
• Time of Year Considerations: Be mindful that during busy periods like Q3 and Q4, quote timelines might extend due to increased demand. This could push the initial quoting phase from 5-10 days to 10-15 days.

Quick Start for New Companies (30 Days)

• Startups and New Businesses: If you're a startup or setting up a new company, transitioning to a PEO can be faster—typically within 30 days. This is because there are no existing contracts to terminate, and the process involves setting up new services rather than switching from an old provider.

Final Tips

• Plan Ahead: If you're planning to switch your PEO, start the process at least 45 days in advance to ensure you have enough time for due diligence and a smooth transition.
• Optimal Switch Dates: Aim to make the switch on the 1st or the 16th of the month for administrative convenience and to align with typical billing cycles.

Conclusion

Switching your PEO is a significant decision that requires careful planning and timing. By allowing a minimum of 45 days and preferably 60 to 90 days, you can ensure a smooth transition. Working with a professional brokerage can expedite the process and help you navigate the complexities more efficiently.

If you need more detailed advice or assistance with your PEO transition, feel free to schedule a 30-minute strategy session with us. We're here to help you make the best choice for your business.

About Us

At Thinq HR and Insurance Services, we specialize in providing comprehensive employee benefits and HR solutions tailored to meet the unique needs of businesses like yours. Our expertise ensures your employees receive the best possible support, allowing you to focus on growing your business. Contact us today to learn more about how we can help you succeed.

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