Ball and chain: Is your PEO dragging down your company culture?

by Mike Gazzano

When you first latched on to a PEO some years ago, it may have seemed like a great solution to your HR infrastructure.

After all, PEOs can come in very handy when your organization is rapidly growing and you lack the time and resources to keep up with all the regulations and innovations in the HR realm.

At this point, however, your PEO may have become more trouble than it’s worth. As companies grow and improve, they often find the firm they’ve chosen to handle their HR is exerting too much control, being too inflexible, overcharging for services or otherwise impeding company progress.

Do you suspect that your PEO has overstayed its welcome?

Here are 6 signs it may be having a negative influence on your company culture.

    1. Your employees are grumbling about HR practices. 
      Yes, it’s human nature to sometimes complain about work. But your people may have valid points about unreasonable policies, old-fashioned standards or excessively expensive insurance rates. That’s the last thing you want in this increasingly competitive labor market.

    2. No one knows what’s going on.
      PEO's that don’t communicate clearly and frequently can cause confusion and uncertainty in your workplace. That can be problematic since today’s employees, especially millennials, value transparency in all workplace affairs. “With transparency becoming a make-or-break factor for both brands and businesses, the practice of ‘repackaging’ and restricting information to employees is being shown to be outdated and ultimately counterproductive,” writes Charles Towers-Clark in Forbes. “Giving employees access to all relevant information about the company is logical, and the sooner employers realize this the better their employee retention, productivity and profits will be.”

    3. You’re dealing with high employee turnover.
      Thanks to the labor shortage, your best talent isn’t going to stick around if your HR practices, salaries and benefit packages aren’t top notch. While some PEOs will continually review and try to improve their offerings on behalf of your employees, others will be driven more by their own interests.

    4. You’re struggling with multiple HR issues. 
      If your PEO isn’t offering support for employee relations issues such as employee conflicts, attendance policy violations and workplace safety infractions, those situations may be going largely unaddressed. That lack of attention can have a huge effect on both productivity and employee morale.

    5. No one likes your PEO's tech tools.
      Convoluted tools and platforms that slow down workflow can be a major source of frustration for busy employees, but you’ll likely have to muddle through if they’re the systems of choice for your PEO.

    6. The future of your HR program seems unclear. 
      Often, PEOs are too entrenched in the nuts and bolts of HR to help you make long-range plans for your staffing success. However, your company culture will suffer significantly if current and future employees don’t see your recruiting and retention efforts as proactive and progressive.

Being shackled to the wrong PEO (or in some cases, to any PEO) can be a major roadblock in your efforts to maintain a positive company culture. It may be time to take a good hard look at whether your current PEO is still working to your full advantage.

In partnership with Lockton Companies, Mike Gazzano can help you objectively evaluate your future options for optimal HR benefits. Call him at 303.621.5020 or email him at for a free, no-obligation consultation.

Breaking down PEO complexities to keep you in-the-know and up-to-speed on key PEO issues (employee insurance and benefits, news & current events, and more) and arming you with strategic solutions to your PEO problems.

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