In our role as PEO consultants, we are often asked how long it should take a company to fully evaluate and implement a PEO. In total, we recommend allowing as many as five months to go through the entire process. This isn’t to say that groups haven’t successfully completed this process in less time. However, we don’t recommend a hasty approach as it can lead to poor decisions and complications with implementation.

The time it takes to complete the evaluation portion of the process depends on how quickly your organization can gather information and make decisions. Ideally, you should allow yourself 60 to 90 days to comfortably navigate through the initial portion of this process. Average times for the evaluation are as follows:

  • Information gathering: 2 – 3 weeks
  • PEO underwriting: 2 weeks
  • Proposal review: 1 week
  • Due diligence (technology demos, references, etc.): 2 – 3 weeks
  • Decision & contract negotiation: 2 – 3 weeks

Once you have chosen a professional employer organization, it is now time for implementation. It is advisable to begin the process at least 45 days before the effective date (extend that timeline out to 60 days for a January 1st start). This gives both the PEO’s staff, as well as your own, enough time to execute this crucial phase as employees take vacations, unexpected projects arise, and illnesses occur. The more time you allow for implementation, the better the transition will be for you and your employees. Below are typical onboarding milestones and the average time for each:

  • Introduction to onboarding team: 1 week
  • Transferring information to PEO platform: 2 – 3 weeks
  • Employee orientation & benefits enrollment: 2 – 3 weeks
  • Technology training: 1 week
  • Processing first payroll: 1 week

The success of your PEO experience can ultimately be traced back to the commitment of time you’ve given to the process of evaluation and implementation.

For more insight into the professional employer organization industry, sign up for the free eBook “The Truth About PEOs”.