50 Questions that can change your PEO



The right questions can make all the difference when in pursuit of organizational alignment and growth. Historically, our articles have provided insight, data, and guidance. However, this article will focus on questions a leadership team can ask to help guide the organization to future prosperity. The fifty questions (along with subset questions) are divided into business components, five per section, for easier use when reviewing your business.


Business Model


  1. What is our target client segmentation?
    • Are there other verticals we should be considering?
  2. Is our model designed appropriately for the selected client segmentation?
    • Does the current model afford desired profit margins?
    • What changes are needed today and tomorrow to better service our clientele?
  3. Is there any misalignment between what we feel is important versus what the client values?
    • Do we conduct client level case studies to better understand our client’s needs and adapt our model when needed?
    • Are we spending money on any part of our offering that is not considered valuable by our clientele?
  4. Does the current model have the ability to scale successfully?
    • What changes in the model will be necessary as the organization grows?
      • Organizational design
      • Service partners
      • Talent
  1. Is there anything within the model that is unique and gives us a competitive advantage in the market?
    • Does the uniqueness in the model help the PEO win when facing competition?
    • Does the revenue gain and retention increase justify the cost for the uniqueness within the model?


Service Partners


  1. Does our PEO have the best third-party service partners?
    • 3rd party examples: Insurance, technology, retirement, TPA, actuarial/underwriting.
    • Are the contracts with these third-party service providers favorable?
    • When can these terms be renegotiated and what is the renegotiation predicated upon (time, size, etc.)?
  2. Are our clients receiving appropriate service, commensurate with our PEO’s standards, when dealing directly with the third-party service providers?
  3. What alternative options to the current service providers are available?
    • Does utilizing an alternative create a competitive advantage?
  4. Are there any areas where the PEO can add new third-party services to the benefit of the PEO and its clientele?
    • What is the cost versus benefit?
    • Does it create a new profit pool?
  5. Has the PEO conducted peer comparisons to ensure it is receiving the best possible service and terms from third-party providers?




  1. What are the areas where the business can become more operationally efficient?
    • Does this require an infrastructure change?
  2. What financial impact would result in becoming more efficient?
    • Seek to quantify the financial impact prior to any changes.
  3. Is the operation structured to scale?
    • Are the current third-party providers still appropriate when the organization scales?
  4. Does the organization have appropriate controls to mitigate risk?
    • What potential outliers could have a financial impact if controls are not tight?
  5. Are the various operational departments communicative?
    • Do the company divisions operate in silos?
    • Would cross training strengthen the organization?



  1. Is the current go-to-market strategy appropriate for growth initiatives?
    • What type of additional entry points could the PEO entertain?
  2. Do we have the right business development talent?
    • Is the compensation structure appropriate for attracting and retaining performing talent?
  3. Is there formal training in place to ensure a consistency in messaging?
    • Is the value proposition being clearly illustrated during the sales process?
    • Are appropriate expectations being set during the sales process?
    • Are sales and operations aligned?
  4. Does the strength of the value proposition give the sales professional something to sell on?
    • Does your sales team consistently lose in the market because another PEO has a better value prop?
  5. Are client referrals being pursued?
    • Is there an emphasis on sourcing client referrals?
    • When does the team seek a client referral and how often?



  1. Does the technology meet our client’s needs?
    • Is it user friendly?
    • Does it have all the features our clients require?
    • Is it secure?
  2. Does the technology allow the PEO to scale efficiently?
    • Can the tech scale as the PEO grows?
  3. Does the technology allow the PEO to improve upon internal to WSE ratios?
    • Does the tech lessen the work for internal/external parties or does it increase the work?
  4. Does the current technology create additional challenges for systems integration?
    • Do systems speak to each other to avoid manual entry?
  5. Is the cost of the technology appropriate?
    • Is it time to renegotiate terms?



  1. What types of insurance should the PEO offer?
    • Example: Workers’ Comp, Health Insurance, EPLI, etc.
  2. Should the PEO take on risk with insurance vehicles?
    • Example: high deductible workers’ comp program, minimum premium health insurance plan.
  3. Does the PEO have a TPA that performs to expectations?
    • Are there TPAs in the market with better results?
  4. Should the PEO have an internal claims liaison or team?
    • Would having an internal claims team help close claims out more quickly?
  5. Should the PEO have multiple providers for each insurance offering?
    • Depending on regional presence, class of business, etc., should the PEO offer multiple insurance providers?

Executive Team


  1. Does the PEO have the right executive team in place?
    • Is there effective communication and interdepartmental collaboration?
    • Will this team still be the right players as the PEO grows?
  2. Does leadership have any blind spots?
    • Does the team seek internal and outside feedback?
  3. As the organization grows, is the Founder still the best person to lead the company?
    • Should a CEO be hired while the Founder transitions to the board?
  4. Does the leadership team set appropriate goals?
    • Are the achievable?
    • Are they effectively communicated throughout the organization?
  5. Is the leadership team consistent?
    • Does the team set the example for an appropriate company culture?
    • Does the team change directions too often?
    • Is there high turnover in leadership?



  1. Does the PEO have the right talent in every department?
    • Is compensation and benefits appropriate for securing and retaining talent?
  2. Does the PEO regularly provide training for its employees?
    • Does the PEO foster a continuous learning environment?
  3. What is the average tenure per department?
    • Is this number favorable? Why or why not?
  4. Is there fluid communication between departments?
    • Do your clients feel a level of disjointedness when dealing with different members of your service team?
  5. Is talent at all levels included in organizational change?
    • Is there a process where feedback is solicited from all levels?
    • Does the company reward employees for innovation and process improvement ideas?



  1. Are the financials where you would like them?
    • Are profit margins desirable?
    • Is cash flow from operations at a desired level?
    • Is the company balance sheet trending in a positive direction?
  2. What moves can be made to improve financials, while not disrupting business operations?
    • Will this change require an initial investment?
  3. Does the company focus simultaneously on top-line and bottom-line growth?
    • Is year over year profit increase percentages outpacing year over year revenue growth percentages?
  4. Is the company in debt?
    • How much debt should the company hold?
    • When will the company be out of debt?
  5. Is the company in a position to make strategic acquisitions?
    • Does the company have the requisite capital to make acquisitions or would it need to seek alternative funding (bank, PE, etc.)?



  1. What is the current valuation of the company?
    • What can be done to improve the valuation of the PEO?
    • How long will these changes take?
  2. Is the PEO looking to make strategic acquisitions?
    • What is the capital range for acquisitions?
    • What is the desirable business mix, geography, size, etc. for a potential acquisition?
  3. What is the PEO’s exit strategy?
    • Is it prepared for an exit now or is housecleaning still required?
  4. Would ownership still be involved if a sale was made?
    • How much equity would ownership be willing to roll over?
  5. Does the PEO prepare for an exit, even if it doesn’t intend to exit?
    • Preparing for an exit helps shine light on areas of improvement, even if the PEO has no plans of selling.




Some may view going through an exercise of this nature as daunting or may even perceive it as a waste of time. However, a PEO that can self-reflect will be in a better position to grow, become more efficient, and increase profit. The questions outlined in this article can be implemented section by section so that the operations are not disrupted during the process. Ultimately, a PEO that asks itself questions like these, then formulates answers with action, will experience better results than those that do not.


Author: Rob Comeau is the CEO of Business Resource Center, Inc., a business consulting and M&A advisory firm to the PEO and private equity industries. You may view BRC’s offering at www.biz-rc.com.