Background and Business Challenges
This Woodland Hills, California-based real estate investment company was founded in 1980. It grew to 35 employees and focused on property development and management throughout Southern California. Shortly after joining the firm in 2007, their new CFO quickly identified four critical challenges within the organization which needed to be quickly addressed.
Payroll. The processing and production of payroll was being handled by an outside CPA firm. The CPA was charging exorbitant fees for the preparation of payroll, electronic tax deposits, quarterly tax returns, annual tax returns, and W2′s. Despite the excessive fees, the CPA firm had no system for tracking vacation, sick and other time off, and the organization constantly found itself requesting information that was unavailable.
Medical Benefits. Any questions, clarifications or employee health benefit issues needed to be handled through an outside broker or directly with the insurance company. All of the health plan administration was being managed through the organization’s accounting department. This process was extremely time consuming and did not provide them with accurate results. “The process caused a great deal of stress to myself, my department, and other employees within the company,” explains the CFO. “I knew we had to make a change”. Additionally, their benefit premiums were extremely expensive. It was one more reason they needed to look for alternative health care solutions.
Workers’ Compensation. While they did not face excessive workplace injuries, there were several incidents that required attention from the insurance company. They found that claims were not being addressed satisfactorily from their insurer, and as a result, faced increases to their workers’ compensation insurance premiums.
Employee Management. Lacking a dedicated personnel department, the company did not have proper Human Resources systems established. Employee termination issues were not handled properly, many employees’ exempt vs. non-exempt statuses were questionable, and employee personnel files were in disarray.
“There was no way we could continue managing our HR responsibilities as we were,” says the CFO. “We began researching alternative HR management options. After extensive research and interviewing five HR providers, we selected CPEhr to help us.”
HR Solutions
CPEhr conducted an initial consultation to determine which service package would best fit the needs of their company. While they offer a range of HR programs – from “A La Carte” consulting to a full HR Outsourcing solution – the CPEhr Consultant determined the client required the complete Co-Employment service model through the PEO (Professional Employer Organization). The PEO program includes payroll and tax administration, human resources management, workers’ compensation and safety services, and full range of medical and voluntary employee benefit packages.
The first step was to provide each employee with a new employment packet, including I9’s, W-4’s, general information sheet, and other mandatory state and federal documentation. The client’s management team then reviewed the benefit options with the CPEhr Benefits Representative, discussed options, and selected a variety of HMO and PPO plans to offer their staff. Finally, the Business Implementation team conducted an Employee Orientation with all their existing staff and assisted them in completing the paperwork and enrolling them in their new benefit programs.
Once on-board, CPEhr provided the client with a dedicated Human Resources Representative that acted as their primary liaison with all other CPEhr departments – Workers’ Compensation, Benefits, Payroll and HR. One by one, each employment challenge was addressed, and solved:
- Payroll was processed accurately and timely, and all paid-time-off benefits were tracked and managed;
- Health benefit premiums were significantly reduced;
- All employee benefit issues were managed by a CPEhr Benefits Representative who acted as the intermediary between the client and insurance carrier;
- Workers’ Compensation premiums were significantly reduced, and a Claims Manager was assigned to address all future workplace injuries;
- Employee files were updated and all exempt and non-exempt status questions were resolved.
Tangible HR Results
To cover the services provided, CPEhr charged a monthly administration fee as a percentage of payroll. “The administrative fee charged by CPEhr was most reasonable,” reflects the CFO. “It provided our company a significant cost savings in both hard and soft costs.”
Offsetting the fee were reductions in workers’ compensation, health and other benefit premiums, consolidated vendors under a single roof, streamlined employment processes, and a reduction in employment risk.
“Beyond the savings, CPEhr protected our company against making bad employment decisions and running inefficient HR systems. They provided exemplary advice on employee termination issues and kept us out of trouble on numerous occasions. Joining CPEhr was probably the best business decision our company ever made.“
We are very happy to announce that CPEhr’s Corporate Counsel Joshua Sable, Esq. was recently recognized as a finalist in the Los Angeles Business Journal’s first annual Corporate Counsel Award.
There is no doubt that adding a few percentage points back into your bottom line would come in handy around now. Sales remain at record lows and employers are still hesitant to hire back lost staff until the economic indicators stop bouncing like a yo-yo. Many employers are looking for new ways to help contain costs and reduce overhead.
As companies continue to find their footing in this slippery and unpredictable economy, you shouldn’t lose sight of the importance of solid HR practices in your company. Despite the desire to cut costs – and perhaps cut corners – solid HR is critical in protecting your company against lawsuits, and in weathering the economic storm. We ask our prospects the following five questions when considering, How does their HR bottom line look?
For the second consecutive year, we are proud to announce that CPEhr was named one of the ‘Best Places to Work” by the Los Angeles Business Journal. Thousands of businesses participate in the annal “Best Places to Work” competition.
We are already approaching the mid-point of 2010, and the economic forecast remains unclear. While pundits in the first quarter predicted an economic rebound, albeit with a few bumps along the way, the most recent economic indicators remain mixed, at best. Just this week, the ISM (Institute for Supply Management) reported that US supply sectors continued to grow in May, for the third consecutive month. At the same time, ADP released monthly employment figures well below analysts’ predictions.