Case Study: A Successful PEO Exit with OutSail's Expert Guidance

Discover how Tech Solutions Inc. successfully exited their PEO with OutSail's expertise, overcoming regulatory, data security, and benefits challenges.

Brett Ungashick
OutSail HRIS Advisor
October 24, 2023
Flowchart depicting the successful transition process from a PEO with expert guidance

Exiting a Professional Employer Organization (PEO) is a significant milestone in a company's journey. It's a complex process that can be fraught with challenges and risks. In this case study, we delve into a real-life example of a company's successful PEO exit with the expert guidance of OutSail. Discover how OutSail's intervention transformed the company's transition and consider how their experience can be a beacon of hope for businesses navigating similar waters.

The Company Background

Our case study begins with a glimpse into the company that embarked on this transformative journey. We'll refer to this company as "Tech Solutions Inc." (a fictional name) for privacy.

Tech Solutions Inc. is a medium-sized tech company that has been utilizing a PEO for its HR, payroll, and benefits functions for several years. While the PEO had served them well initially, as the company grew, they began to face specific challenges that prompted them to consider a PEO exit.

The challenges Tech Solutions Inc. faced were diverse and significant. Let's explore these challenges in more detail.

Challenges Faced

1. Regulatory Compliance

Tech Solutions Inc. expanded into different states and encountered a complex web of employment regulations. Ensuring compliance with varying federal, state, and local laws became increasingly challenging. The risk of legal issues and penalties was a constant concern.

2. Data Security

Tech Solutions Inc. managed sensitive employee data, and the PEO's data handling practices fell short of their expectations. Data security was paramount, and Tech Solutions Inc. feared that a breach could jeopardize their operations and harm their reputation.

3. Benefits Transition

The company's PEO handled employee benefits, and Tech Solutions Inc. desired a more tailored approach. They wanted to ensure that their employees continued to receive competitive benefits, especially retirement plans, without any hiccups during the transition.

4. Contractual Agreements

Tech Solutions Inc. had complex contractual obligations with their PEO. Navigating these agreements while smoothly exiting the PEO without legal disputes was a significant concern. Breaching these contracts could lead to costly legal battles.

5. Employee Communication

Maintaining clear and compliant communication with employees was of utmost importance to Tech Solutions Inc. Mismanaging this could result in confusion, mistrust, and potential legal issues. Compliance included notifying employees about changes and ensuring they received the benefits they were entitled to.

OutSail’s Intervention

Tech Solutions Inc. turned to OutSail during these challenges for expert guidance on their PEO exit. Here's how OutSail intervened and provided solutions, step by step:

1. Comprehensive Analysis

OutSail initiated the process by comprehensively analyzing Tech Solutions Inc.'s unique situation. This involved an in-depth examination of their regulatory compliance, data handling practices, benefits structure, and contractual obligations.

2. Regulatory Expertise

OutSail's team of experts guides adhering to the intricate web of federal, state, and local regulations. They formulated a compliance strategy to ensure Tech Solutions Inc. met all legal requirements.

3. Data Security Assurance

OutSail focused on data security during the transition. They ensured that sensitive employee data was transferred securely, in compliance with relevant data privacy laws. This meticulous approach minimizes data-related risks.

4. Benefits Transition Support

OutSail guided Tech Solutions Inc. through transferring employee benefits, emphasizing ERISA compliance to ensure that retirement and benefits plans were preserved without disruption.

5. Legal and Contractual Assistance

OutSail provided legal support to Tech Solutions Inc., helping them understand their contractual obligations and ensuring their exit plan adhered to their agreements with the PEO. This careful handling mitigated the risk of legal disputes.

6. Employee Communication

OutSail assisted in crafting clear, compliant communications for Tech Solutions Inc. These communications kept employees informed and maintained their trust and goodwill throughout the transition.

Results and Feedback

Tech Solutions Inc.'s journey with OutSail was a resounding success. Let's take a look at the outcomes and feedback:

Regulatory Compliance

With OutSail's guidance, Tech Solutions Inc. achieved full regulatory compliance across all the states they operated in. They no longer feared legal issues or penalties, and the company could operate confidently within the boundaries of employment laws.

Data Security

Data security was enhanced during the transition. Sensitive employee information was transferred securely, and Tech Solutions Inc. had peace of mind, knowing they wouldn't be risking data breaches or damage to their reputation.

Benefits Transition

Tech Solutions Inc. successfully transitioned employee benefits without disruption. Employees continued to receive their entitled benefits, and the company’s retirement plans remained intact, thanks to OutSail’s ERISA compliance expertise.

Legal and Contractual Resolution

Tech Solutions Inc. exited the PEO without any legal disputes. OutSail's legal support ensured they adhered to their contractual obligations, safeguarding the company's financial interests.

Employee Communication

Clear and compliant communication fostered trust among Tech Solutions Inc.'s employees. The transition was smooth and free of confusion or mistrust, with employees appreciating the transparency.

Tech Solutions Inc. was delighted with the results, and they provided positive feedback about their experience with OutSail. They felt that the expert guidance they received was invaluable in ensuring a seamless PEO exit.


Tech Solutions Inc.'s case study is a testament to the transformative power of expert guidance during a PEO exit. With OutSail’s comprehensive assistance, their journey showcases how a company can overcome many challenges, achieve regulatory compliance, enhance data security, ensure a smooth benefits transition, resolve contractual obligations, and maintain trust among their employees.

As your company considers a PEO exit, remember you don't have to navigate this complex terrain alone. OutSail's expertise can be the guiding light that leads you toward a successful transition. Their case study with Tech Solutions Inc. demonstrates expert guidance's profound impact, making your PEO exit a success story worth celebrating. Don't hesitate to contact them; your company's transformation could be the next remarkable case study.

What is a PEO exit, and why is it significant for companies?

A PEO exit refers to the process of transitioning away from a Professional Employer Organization (PEO) for HR, payroll, and benefits services. It's significant for companies seeking more control over their HR functions, regulatory compliance, and data security.

What are some common challenges companies face when exiting a PEO?

Common challenges include ensuring regulatory compliance across different states, maintaining data security during the transition, transferring employee benefits seamlessly, navigating contractual agreements with the PEO, and effectively communicating changes to employees.

How can OutSail assist companies in navigating a PEO exit?

OutSail provides comprehensive assistance tailored to each company's unique needs. Their services may include regulatory expertise, data security assurance, benefits transition support, legal and contractual assistance, and crafting clear employee communications.

What are the key benefits of working with a company like OutSail during a PEO exit?

Working with OutSail can help companies achieve regulatory compliance, enhance data security, ensure a smooth transition of employee benefits, resolve contractual obligations with the PEO, and maintain trust among employees through clear communication.

How does OutSail ensure regulatory compliance during a PEO exit?

OutSail's team of experts guides companies in adhering to federal, state, and local regulations, formulating a compliance strategy tailored to their specific situation. This includes addressing complex regulatory requirements across different states

2024 HRIS 
Landscape Report
Read OutSail's 2024 HRIS Report with write-ups on 30+ leading vendors
Thank you! You can download your report at this link
Oops! Something went wrong while submitting the form.
Unsure about your software needs?
Use our HRIS Requirements Builder to quickly identify your must-have & nice-to-haves
Brett Ungashick
OutSail HRIS Advisor
Accelerate your HRIS selection process with free support
Thank you! Our team will reach out to you shortly
Oops! Something went wrong while submitting the form.

Meet the Author

Brett Ungashick
OutSail HRIS Advisor
Brett Ungashick, the friendly face behind OutSail, started his career at LinkedIn, selling HR software. This experience sparked an idea, leading him to create OutSail in 2018. Based in Denver, OutSail simplifies the HR software selection process, and Brett's hands-on approach has already helped over 1,000 companies, including SalesLoft, Hudl and DoorDash. He's a go-to guy for all things HR Tech, supporting companies in every industry and across 20+ countries. When he's not demystifying HR tech, you'll find Brett enjoying a round of golf or skiing down Colorado's slopes, always happy to chat about work or play.

Subscribe to the HR Tech Download

Don't miss out on the latest HR Tech trends. Subscribe now to stay updated
By subscribing you agree to our Privacy Policy.
Thank you! You are now subscribed to the HR Tech Download!
Oops! Something went wrong while submitting the form.