Posts Tagged ‘PEO’

Employee Training and Development – a Business Must-Have to Survive in 2010.

Tuesday, January 19th, 2010

Even now, in difficult economic times, while employers continue to look for ways to keep costs down and reduce overhead, owners and entrepreneurs see value in employee and management training. Employers realize that educational development and training is a crucial investment for a motivated workforce. An intelligent, well-trained workforce is central to worker productivity and key to a company’s success.

Surveys support the need for management training.

Ken Blanchard Companies recently conducted a poll of over 1,700 executives and managers in their “2009 Corporate Issues Survey”. In the survey, the executives were posed the question, amongst others: “What tactics will your firm implement to cope in a down economy?” The overwhelming response by close to 2/3 of respondents was “Invest in productivity and performance maximizing strategies”.  These businesses recognize that the most promising way to weather tough economic times is to have skilled talent help grow the organization. Additionally, numerous surveys directly link employee training with lower turnover, lower accidents, and increased performance and productivity. Successful companies embrace training as a central part of their philosophy.

Outsourcing training to a Professional Employer Organization

According to the American Society of Training and Development (ASTD) over $134 billion was spent on employee learning and development in 2008. In their 2009 State of the Industry Report, the ASTD reveals that over $45 billion was allocated to external services such as workshops, vendors and external events. Businesses recognize the value of accessing external resources to train and develop their staff, as opposed to creating and implementing these programs internally.

A Professional Employer Organization offers a wide range of employee training and management development courses, often built into their standard services, or for an additional nominal fee. This training goes  hand-in-hand with additional Human Resources support services, to round out a company’s corporate policies to ensure a safe, compliant, and positive work environment.

Robust Course Offering

PEOs offer a complete range of training, but the most common ones appear below. CPEhr provides over 40 customizable trainings that can be delivered via the internet, or live, on-site at the client’s workplace.

Courses typically offered can include:

•    Sexual Harassment    •    Workplace Safety   •    FMLA    •    Interviewing Skills   •    Progressive Steps of Discipline    •    Motivating Employees   •    Performance Appraisals    •    Effective Communication Skills   •    Principles of Time Management    •    Diversity in the Workplace   •    Preventing and Defusing Violence    •    Customer Service Training   •    Effective Business Writing    •    Managing Difficult Employees

FREE Webinar on the Value of Training

If you like to learn more about the benefits of training for your organization, please join on THIS THURSDAY, January 21, 2010 for a free webinar: The Business Value of Training. Register here.

PEOs Help Streamline Operations and Simplify Complex HR Administration

Thursday, January 14th, 2010

We continue our discussion on how Human Resources Outsourcing firms and Professional Employer Organizations can significantly reduce the labor costs for small and mid-sized employers. Last post discussed the concept of economies-of-scale. Today we will look at how PEOs can streamline the HR processes within an organization, and reduce redundant employment administration.

Streamlining Operations.

PEOs can help small employers stabilize operating costs is through streamlining their internal administrative operations. By joining a PEO, businesses are able to combine multiple vendors under one roof, thereby eliminating the need to maintain relationships with multiple vendors.

A full-service PEO can provide all of the following services, often at a reduced cost:

  1. Payroll processing
  2. Tax services
  3. Governmental form submissions
  4. Safety consulting
  5. Assistance with labor law compliance
  6. Creating and reviewing employee handbooks & policies
  7. Health insurance plans & administration
  8. 401 (k) and Cafeteria 125 Plans
  9. Workers’ Compensation insurance
  10. Management Training
  11. Recruiting services
  12. Assistance with unemployment administration

Eliminate Multiple “Point People”
From the personnel and management perspective, these services result in a reduction of duplicated efforts between departments and enables them focus their time on core business functions. Often, only one “point person” is required within the client’s organization, replacing multiple positions in multiple departments.

Some companies experience such a drastic reduction in administrative functions they are able to reduce headcount. Others find more valuable, revenue-generating tasks for these employees to fill. The most successful companies will be those that focus on the core business rather than spend money and use staff resources to manage non-revenue generating tasks, such as benefits and retirement plans administration, managing HR compliance regulations, or processing payroll and taxes.

From the business-owners’ perspective, reports indicate that once HR and other operations are outsourced, employers are better positioned to focus on their core operations.

HR Outsourcing and PEOs Enable Small Businesses to Reduce HR Costs

Tuesday, January 12th, 2010

Continuing our discussion on small business employment priorities, we will discuss the first priority mentioned in the last post, stabilizing operating costs, and how an HR Outsourcing firm or Professional Employer Organization can help to reduce those costs.

Stabilizing operating costs

As employment costs continue to grow, employers must review their primary HR-related expenses. These areas can include: health insurance premiums, workers’ compensation costs, employment compliance, payroll/tax costs, salaries and overhead relating to employee administration. An HR Outsourcing firm can help small employers successfully reduce costs in all of these areas accessing the HRO or PEO firm’s Economies-of-Scale.

Economies-of-Scale.

Economies-of-scale is the primary method through which an HRO firm can reduce a business’ operational costs. Small employers with minimal payrolls and fewer than 500 employees are often limited in the variety of health insurance plans they can offer, have limited buying-power for workers’ compensation, and overall, have less flexibility in administering these plans. In contrast, by pooling hundreds, and even thousands of businesses, HRO firms aggregate health benefit plans, retirement plans, workers’ compensation insurance, and legal expertise. The HRO firm establishes relationships with large regional insurance companies and can offer better plan selections with lower premiums.

Stabilizing insurance premiums.

Another benefit of working with an HRO firm is that it provides the insurance carriers greater stability by offering insurance coverage to employees in a broader employee base. The pooled employees come from different industries and geographic areas which stabilize the premiums over the long-term. This provides the HRO firm greater negotiating power at renewal, thus typically keeping renewal rates below market averages.

Proactive programs keep premiums down in future years.

Beyond rate negotiations, HROs possess the internal resources to support programs that can help maintain low insurance premiums into the future. In health insurance, many offer Work/Life balance programs, health and wellness incentives, or discounts to health clubs and gyms. A healthy lifestyle in and out of the workplace can make significant, positive impacts on the utilization and expense of future health insurance premiums. In regards to safety and workers’ compensation, the HRO firm conducts routine safety walk-throughs, creates effective injury and illness prevention plans, and offers safety incentives to reduce the frequency of workplace injuries. These programs ultimately result in fewer workers’ compensation losses and more competitive insurance premiums.

A more efficient system

Finally, the HRO firm can manage routine HR tasks more efficiently as the talent and infrastructure are already in place. When a small business joins the HRO firm, they simply access these existing programs at reduced rates and a minimal time investment.

What to Look for When Selecting a PEO Part 2 – NAPEO’s Guidelines

Thursday, November 26th, 2009

Our post yesterday provided an overview of Professional Employer Organizations, and the role they play in supporting small business. Today we will review the National Association of PEO’s (NAPEO) recommended guidelines in working with a PEO.

NAPEO Guidelines

NAPEO, in particular, provides prospective clients with a few guidelines to help them seek out the services of a PEO. Some of these guidelines include:

a) Assess the needs of your company first. Since there are now several PEO companies specializing in different branches, it is imperative that you know exactly what your company needs so that you will not have to pay for services that you don’t really need. Determine your HR and risk management needs, and try to compare the services being offered by the PEO companies.

b) Meet every potential PEO provider. Although there seems to be a lot of PEO companies that are willing to provide you with internet based communication, it will be best that you try to meet these people so that you can gauge their legitimacy and their capability to perform the tasks you need. Other gauges of legitimacy may include:

i. Professional references from clients and colleagues

ii. PEO background – you can check whether the PEO has a history of business competency, actual business certification, permit to operate in the state or country they are based, affiliation to the NAPEO or ESAC, etc.

c) Review the written agreement thoroughly, and preferably have the company’s retained lawyer give you a read-through. There is a difference between a verbal agreement and a written contract. Make sure that you know exactly what you are signing, and if you have any questions about certain policies or feel that the contract should be giving you more, then ask your lawyer (or the PEO) company.

A professional employer organization can certainly be a boon to many companies, but only if yours really needs the services offered, and you have thoroughly checked the contract. Make sure that you are getting what you want and that there are no hidden costs that you are unaware of. If everything is fine, then PEOs can save you a lot of money in providing professional help in areas of employment in which you either lack the skills to carry out properly, or would cost you too much to set up a department to handle.

What to Look for When Selecting a PEO

Wednesday, November 25th, 2009

True to form, when an emerging business trend proves itself successful with lots of room for growth and improvement, there are many factions that eventually branch out as a result of that trend. A very concrete example of this is outsourcing, with PEO as the branching faction. The establishment of PEO, or professional employer organization, is one way of stabilizing the outsourcing industry through regulations and enforced compliance.

What is a PEO?

The PEO industry is a business model for outsourcing human resource services. PEOs, also known as employee leasing or staff leasing in some business circles, provide administrative services for tasks such as human resources, the handling of employee benefits, payroll, and workers’ compensations. The industry has consistently experienced 20% annual growth over the past decade as state and federal regulations continue to grow and become more complex. Particularly in specific states such as California, were labor laws are extremely complex and differ from federal guidelines, California PEO and California employee leasing firms have sustained consistent growth in the marketplace.

In a PEO relationship, the employees of the client worksite are “transferred” to the payroll of the PEO, which in turn reports all wages, taxes and benefits under its state tax identification number. In other words, a PEO firm hires a client company’s staff on paper, thereby making the PEO the employer of record, or Co-Employer, in all legal agreements or contracts. The PEO industry is currently estimated as a $51 billion industry serving an estimated 100,000 small to mid-sized businesses and 2 million to 3 million workers. With strong annual growth rates, about 700 authorized and recognized PEOs offering a wide array of employment services and benefits are operating in North America.

What to Consider When Looking at PEOs

Since its inception, there has been a series of abuses reported in regards to fraudulent PEOs or legal PEOs not performing the agreed services, such as non-payment of employee insurance premiums or misreporting taxes and workers’ compensation rates. In 1991, several laws were passed to protect workers from these abuses. At the same time, the development of such laws opened the doors for more global provisions to be made to ensure that prospective clients are not affected adversely at the other end of the spectrum.

As such, this led to the creation of trade associations that could deal with abuses from PEO companies; associations such as the National Association of Professional Employer Organizations or NAPEO, formerly known as National Staff Leasing Association or NSLA, and the Employer Services Assurance Corporation or ESAC. In our next post we will review the recommendations of NAPEO when selecting a Professional Employer Organization for your company.