Beware of PEO Tactics

Recently, we released our own e-book, Get More Done with a PEO, which goes into detail about what a PEO is and how it can help your business. In last week’s blog,we discussed the costs of a PEO and why transparency is so important. Transparency is a key to making sure our customers know what services they will be receiving and paying for. 

After working with and talking to several different companies about their HR needs and current PEOs, our CEO, Mike Kelly, has identified 4 PEO Tactics to be aware of when deciding which PEO is right for your company. 

1. Mark up on the taxes you pay each month.

The government has outlined how much you should withhold monthly for employees, and when you work with a PEO, they ensure the proper amount of taxes are paid.

However, unless you are familiar with the tax rates and scrutinize your bill, you may end up paying more per employee. Some PEOs may add 1 to 2 percent to the tax rate to pad the amount, hoping that you, the business owner, never notice.

2. Minimum Contract Requirements

Some PEOs require their salespeople to obtain a minimum contract amount per client. Therefore, companies with fewer than ten employees seeking the PEO’s assistance may be quoted a high price per employee to hit that minimum amount. Be sure to ask up front if there is a contract minimum in order to engage the PEO, and if so, shop around to find a company who doesn’t have one to make it more economical for you.

3. Percentage of Payroll vs. Fixed Rate

If you have a small team of high-income employees, you need to be aware of how your PEO fees are calculated. If your PEO charges a percentage of payroll, rather than a fixed fee per employee, then you may be paying too much for PEO services.

4. Unclear Billing

Many PEOs offer bundled services for one price, so when the invoice comes, you’ll see a bill without any details or explanation of exactly what you are paying for. How will you know if you’re overpaying for a service, or paying for one that you don’t need? Ask for an itemized bill to make sure your costs line up to what you discussed.

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We believe transparency is incredibly important when working with different companies and clients. We wanted to highlight these different tactics so that you are aware and educated when trying to make an investment in your company, such as using a PEO. 

Find more information about PEOs and why FullStack might be the right PEO for you in our e-book, Get More Done with a PEO. 

Invest in a PEO

Recently, we released our own eBook, Get More Done with a PEO, which goes into detail about how a PEO can help your business grow. In last week’s blog, we discussed how outsourcing your HR needs to a PEO will help your company save time, reduce risk, and create a better employee experience. 

Utilizing a PEO is an investment in your company and your employees. Is it an investment that your company is ready to make? 

How much is it going to cost to use a PEO?

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There are some expenses, such as worker’s compensation and unemployment taxes, that you would have to pay regardless of working with a PEO. So, besides those expenses, how much does it cost to work with a PEO? That depends on several factors, including the size of your company, which PEO model you use, and how transparent the PEO is with its fees.

We can help you uncover the costs of using a PEO. Schedule a call with us to find out the costs for your company to use a PEO.

How does the PEO Business Model Work?

There are two prevalent business models PEOs use. One is a percentage-based model, where you pay a percentage of your company’s payroll. Under this model, the costs you pay each month can vary, depending on your payroll.

The other model is a flat fee for each of your employees paid monthly or annually to provide HR services. Other services will be flat fee as well, including new employee setup. You know up front how much each employee will cost you and can budget accordingly.

In both models, you are responsible for the actual health care costs, taxes, etc., for your employees.

A few words from FullStack PEO COO, Dawn Lively. 

“Here at FullStack, we strive to be transparent with our clients and partners. Transparency can be a huge barrier to companies interested in learning more about PEOs and the services PEOs can provide. It is so important for companies to know what they are paying for and the services they will be offered. We believe that being transparent is just the right thing to do and we strive to work with each company closely and transparently.”

Utilizing a PEO is an investment in your company and your employees. It is an investment that will help your company save time, reduce risk, and create a better employee experience. This investment can help grow your business. Schedule a call with us to find out the costs for your company to use a PEO. Learn more about how using a PEO is a wise investment in your company by downloading our newest eBook, “Get More Done with a PEO.”

Gracen Perdue
Why should you outsource your HR needs and how will this help your business?

Last week we released our very own e-Book, Get More Done with a PEO, which goes into detail about how a PEO can help your business grow. In last week’s blog, we discussed what a PEO is and some of the tasks that are typically delegated to a PEO. You can find more information about those specific topics here:

Now that you know and understand what a PEO is, there are a few other questions to address when considering if outsourcing HR is the right choice for your company. 

Questions such as: Why should your outsource your HR to a PEO? How will it help your business? How will it help your employees? 

Let’s face it – running your company is time-consuming. You’ve got a lot on your plate, from scaling and marketing to figuring out product-market fit. Partnering with a PEO frees up time to focus on running and scaling your business.

When we interviewed Meredith Gradle, CEO of Iris Works recently, she said this best: “FullStack helps me to be a fulltime CEO and business owner as well as a full-time parent.  And honestly, I wouldn’t know how to do it without them. It gives me flexibility when I come home I can actually be at home and be present with my kids, and I don’t have to worry about all the things FullStack handles for me.”

You didn’t start your company to spend half your day dealing with HR issues. You started your tech company to solve a problem — to introduce an innovative approach to an established system.

PEOs handle the transactional HR items that are important for your business to run smoothly. A PEO can also work with your company’s existing advisors on your behalf, freeing up more of your valuable time. By doing so, your company can experience growth more quickly. The National Association of Professional Employment Organizations found that companies that use PEOs grow 7 percent to 9 percent faster than companies that don’t use PEOs.

Reclaim Valuable Time

When you start your own company, you don’t have the luxury of walking into an established corporate structure with support staff who can answer questions and explain income taxes or the difference in benefits packages. Chances are, you don’t know the first thing about mitigating employment risks or insurance. Why spend time researching information about complicated HR issues when you could work with an advisor that has helped companies just like yours?

You and your employees gain access through a PEO to an experienced HR staff that is knowledgeable on local, state, and federal taxes and regulations. The PEO will make sure that the proper amount of money is withheld from your employees’ paychecks each pay period.

Avoid HR Headaches

Are you familiar with federal anti-discrimination laws that apply to prospective and current employees? What about safety laws or wages laws? Chances are, you’re not. You know the tech industry, not issues that fall under the HR umbrella. But a PEO knows how to comply with these laws and others that impact your company and employees.

Create a Better Employee Experience

Working with a PEO that specializes in your industry and marketplace benefits both you and your employees. You save time both up front and during your partnership because the PEO already understands what challenges a small, tech company in the Midwest faces. A PEO in the tech industry has experience working with various early-stage companies and the people needed to scale those companies. It will already know what benefits you’ll need to offer to attract and retain top talent.

Do you want to reclaim valuable time, avoid HR headaches, and create a better employee experience? 

If this sounds like you, then a PEO might be the right option for your company and employees. Find more information about how a PEO can save your company time, reduce risk, and create a better employee experience in our e-book, “Get More Done with a PEO.”

E-Book Release!

We are excited for the release of our e-book, “Get More Done with a PEO,” which you can download here:  In conjunction with the release, we are going to be highlighting particular focus areas each week in June & July.  It all starts with these two questions:

What’s holding your business back from growth? Are you spending time on the right things for growth - or the administrative tasks of your company’s HR and operations?

If this sounds familiar, you know you need to make a change. It’s time to turn to a trusted adviser to remove the burden of transactional HR and free your time to focus on revenue.

As the tech scene is exploding in Indiana, companies need to find a way to attract and retain talent. What does the workforce want when it comes to choosing where to work and why to stay there? They want a strong company culture, opportunities for growth and development, and traditional benefits.

Here at FullStack, we want small business owners to know their options and understand just how a PEO can help their business grow. We believe that when companies can outsource their administrative HR needs to a PEO, that company is able to focus more on bringing their ideas to market and generating revenue.

What is a PEO?

A PEO is an HR outsourcing firm that enters into an agreement with a company to share responsibility and liability for its employees in the areas of Compliance, Employee Relationship Payroll and Benefits Administration, Workers’ Compensation, and Risk Management. The arrangement allows small companies to be able to offer highly sought-after benefits, such as 401(k) and health care benefits, to employees at costs much lower than if the company were to obtain them independently.

The demand for tech talent is continuing to flourish in Indiana and the Midwest. Companies that offer benefits make themselves more attractive to current and prospective employees. Working with a PEO can help you affordably offer these lucrative benefits that otherwise may have been cost-prohibitive for your company.

What do I delegate to a PEO?

At a minimum, the PEO will monitor and administer payroll, benefits, workers compensation, 401(k), compliance regarding taxes, employment law and other HR matters, as well as drug testing and background checks.

You decide who to hire and what benefits to offer. The PEO then handles the onboarding process or working with benefits providers. This process frees up the much-needed time for company leaders to focus on growing the business.

Do you want to spend more time focusing on bringing ideas to market instead of HR or administrative tasks? Do you want your company to grow?

If this sounds like you, then a PEO might be the right option for your company. You can find more information about what PEO is and how it can help improve your business, in our eBook, “Get More Done with a PEO.”

A Reflection on Mental Health for Entrepreneurs

May was Mental Health Awareness month, and below I reference a few articles we have posted on social media for further reading. Our goal in calling awareness to mental health challenges for entrepreneurs is threefold:

1) Destigmatize Mental Health Challenges

2) Create Openness & Transparency

3) Empower People to Seek Help

As an entrepreneur myself and working with entrepreneurial organizations for the entirety of my career, I have had to face my own anxiety, be open and transparent with safe others to help me find solutions, and be empowered to prioritize my own mental health and take care of myself.  How I practice this is through embodied practices in nature, like walking, hiking, running, biking, and taking deep breaths. I also like meditation and sing with the Indy Choral Artisans.


I had the chance to ask several colleagues about why they believe mental health practices for entrepreneurs are important, and first from our Co-Founder/COO Dawn Lively:

“Entrepreneurs face stress from every possible direction of their lives, and there’s an inherent amount of stress with starting and sustaining a business that isn’t often discussed openly. For me, I take time for at least one self-care activity a week, whether that’s a massage, a pedicure, or an appointment with a therapist, depending on what is occurring in my life at that time. I also walk as often as I can as I’ve found it to be the most effective for me to clear my head.  This is what entrepreneurs need to find for themselves - activities that give them a refreshed outlook. Maybe marathons, maybe binging Netflix - no judgment!”

From our Marketing Intern, Gracen Perdue:

“As a perfectionist, I have such a strong desire to make sure everything is perfect all the time, and this is not good for my mental health.  I’ve met a number of entrepreneurs who are similar. Here is what I do to challenge perfectionism:

  1. Make the unknown, known.

  2. Accept the “uncontrollables”

  3. Have confidence in my skills and abilities

  4. Give myself grace when I make mistakes

When I need to prioritize my mental health, I try to spend time with people who I know support and love me no matter what is going on in my life. By surrounding myself with people who remind me of my value, I find that my confidence is lifted and I am more encouraged to continue challenging perfectionism.”



How do you prioritize your mental health as an entrepreneur?  We’d love to hear from you.

At FullStack, we believe and our clients tell us that our work is not just about saving entrepreneurs time and money on figuring out HR & Benefits, but it’s also about freeing up their time and headspace to prioritize their mental & physical health and spend time with their loved ones.

Check out some of these other resources for further reading about Mental Health Awareness.