Am I outsourcing my Human Resources already?
Posted by Kristian Svindland on March 29th, 2011
Most likely you are…You just don’t realize it. Here’s a quick test to see if you are hr outsourcing.
If you answer false to any of these questions, then you outsource HR.
1. My company is self-funded for workers compensation
2. I handle all aspects of payroll internally, from collecting the hours to cutting the checks to quarterly and annual tax payments to w-2’s to setting up direct deposit for my employees
3. I do not offer any benefits to my employees
Not as easy as you think, is it?
Let’s start with number 1…workers compensation. The common misconception is that workers compensation insurance is a burdensome tax to business owners and that it is only in place to protect employees…quite the contrary. Workers compensation insurance is in place to protect owners’ businesses in the event of a work-related injury to an employee. A second misconception is that if all of the employees are 1099’ed, sub-contractors, then the business owner is held harmless. That is fine and well until a sub hires a sub and they end up with an injured employee. Who then is going to be the responsible party? Trust me, that stuff flows uphill. Bottom line…workers comp…gotta have it. If you don’t you’ll be paying off the lawyers and injured with the proceeds from the sale of your business.
Which takes us to number two, outsourcing your payroll. Everyone should be using this service. Your time is money and your money is money…don’t waste either by doing this function in-house. Plus, the related fines if you flog it up.
And then you have employee benefits. Who is managing that? Your office manager? That’s great, that’s a money saver, because they work for free, right? Again, you’re wasting their time, plus opening yourself up to labor law infractions as I’m sure your office manager/client service rep/admin assistant is up to speed on all federal and state regulatory labor laws. Here’s a quick test of that employee’s knowledge of human resources. Ask them what C.O.B.R.A. stands for…and how long an employee must be retained on your company’s healthcare plan once they leave your employ. (Answers: Consolidated Omnibus Budget Reconciliation Act…and 18 months.)
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How PEO helps businesses gain control
Posted by Kristian Svindland on March 7th, 2011
We are often perplexed by companies that come to us looking for a solution and seem to be under the misguided perception that PEO (professional employer organization), sometimes referred to as employee leasing, would mean a loss of control.
On the contrary, PEO allows business owners to know exactly, to the penny, how much their total labor burden is or will be.
Currently, their payroll processing, benefits costs and risk management are in differing departments or services. With PEO, it all comes together, neat and tidy. The rates charged, plus benefits, are already pre-negotiated. In addition, the employer risk is shifted entirely to the PEO. Meaning, if there is a workers comp claim or unemployment claim or workplace tort for harrasment or wrongful termination, that responsibility all falls upon the PEO.
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Suggestions for new Administaff name?
Posted by Kristian Svindland on February 28th, 2011
http://www.bizjournals.com/houston/news/2011/02/28/administaff-to-change-name-to-insperity.html
What’s in a name?
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Advantages of Professional Employer Organizations (PEO)
Posted by Kristian Svindland on October 15th, 2010
One of the immediate advantages of PEO or employee leasing is that management’s time that was previously spent on personnel management and accounting can now be directed toward activities that effect earnings and profit.
In addition, a company that arranges with a PEO will find immediate economies of scale in providing benefits, especially healthcare. Other benefits, such as cafeteria plans, life insurance, disability insurance and 401k plans, are not often offered by smaller companies, but through a PEO, they are all available at no additional costs.
Lastly, a PEO or employee leasing firm provides assistance in defining personnel policies and compiling employee handbooks as well as compiling and recording employee files.
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McDonalds to cancel healthcare for its employees?
Posted by Kristian Svindland on September 30th, 2010
Here is the report from the Wall Street Journal. Hmmm…wonder if they would be a good client for PEO?
http://online.wsj.com/video/088AC31E-1087-428F-AD84-62AA9E6D5EA6.html?mod=wsjcrmain
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CPA’s! Talking about PEO – are you with us or against us?
Posted by Kristian Svindland on August 27th, 2010
Very frustrating to have Certified Public Accountants (CPA’s) attempt to scare the business out of clients.
Recently, we had a local CPA, who lost the payroll business on a 4 man company (I estimate they were charging $200/week to process payroll…PAYROLL!!!) call the State Department of Employment Securities to let them know that they were closing their account with the State.
The DES sends a letter to the client to let them know that they no longer have an account and could face fines if they do not re-open their account ASAP.
Some CPA’s do not understand, nor do they want to take the time to understand how PEO (professional employer organizations) work.
Some CPA’s do understand, they see the overall cost and time savings their clients will receive via PEO and recommend going forward.
Anyone else have any scary CPA stories? Don’t get me going on lawyers…
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AON Consulting’s Survey of PEO on going paperless
Posted by Kristian Svindland on August 20th, 2010
Interesting report by AON regarding how PEO’s are going paperless.
http://www.aon.com/attachments/2010_PEO_Survey_Final.pdf
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Department of Labor to step up on misclassifications
Posted by Kristian Svindland on July 12th, 2010
The Department of Labor (DOL) has submitted its fiscal year 2011 budget to Congress. One of its main objectives is to penalize employers who misclassify employees as independent contractors.
Another reason for small businesses to outsource their human resources to a solution like PEO (professional employer organization). Once the DOL finds a company that has classification errors, the liability for back wages and overtime pay, as well as to DOL penalties, will start adding up and potentially put them out of business.
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Entrepreneur Magazine touches on HR outsourcing
Posted by Kristian Svindland on June 28th, 2010
Here is a link to an article in Entrepreneur Magazine that is at the heart of why small and mid-sized businesses should be outsourcing their HR, in particular, PEO is mentioned as a more cost-effective way of doing business.
http://www.entrepreneur.com/magazine/entrepreneur/2010/july/207170.html
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Good article about what insurance agents should do before recommending PEO
Posted by Kristian Svindland on June 18th, 2010
PEO is a great solution for small to mid-sized businesses that cannot afford a full time HR department.
Here is a good article aimed at insurance agents that may be contemplating offering PEO services along with their other lines of insurance/business.
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