“Servant HR is like Peanut Butter to my Jelly. They are masters of their domain and they love Jesus.”
February 26th, 2013 by Scott Ingram
Many people look at human resources as one of those things you have to do in business. It’s just the way it is. Our clients understand that human resources isn’t just an obligation — which it is to a degree — but when it’s used strategically, it can be a means to unlock opportunities and grow your business. The bottom line is, when you use a PEO, you are being strategic.
Here are six ways a PEO helps you grow your business:
1. PEOs create the freedom for you to focus on your business. PEOs like Servant HR take projects off their clients’ plates. Administrative tasks are the obvious ones. For example, the State of Indiana requires you to report all new hires. This is one of the things that can easily slip through the cracks at businesses in growth mode. When you are focused on building your infrastructure, hiring the best people and moving into new markets, tasks like reporting a new hire can get lost — and get you in trouble. When you have someone else focusing on those things, you can keep growing your business. There’s no wasted time scrambling to figure what’s required and how to fulfill the requirement. A PEO simply does it, often without our clients even knowing it’s been done. Setting up workers’ compensation is another admin task that often goes overlooked — we just do it.
2. We can help minimize potential attorney fees and wasted time. You probably have an accountant, so when you have an accounting-related question, you call your accountant. In the same way, once business leaders understand their PEO’s areas of involvement, they begin to contact them first when they are dealing with a sensitive HR-related issue.
Going directly to your PEO when you have an issue may help prevent you from wasting money on attorney fees or wasting time researching issues on your own. If we can handle the issue, we will. If we need to work with a client’s attorney to help, we will, and we will have the background information needed to inform our client’s attorney of the issue. In this way, a PEO can help look out for your bottom line.
3. PEOs work strategically with your business goals in mind. Your PEO knows your employee handbook from cover to cover – it probably helped you develop it. And it knows your company philosophy and priorities. When you are dealing with risk issues, such as a discipline challenge, business leaders can turn to their PEO to help them figure out the next steps, and those handbook details and understanding of your business play key roles in how you should strategically respond to risk-laden circumstances. PEOs advise their clients with a full understanding not only of your employee numbers but also an understanding of where you stand financially and other seemingly non-HR matters.
4. PEOs minimize risk. Entrepreneurs recognize the depth and breath of HR today. Healthcare reform helps greatly accentuate that point. All employers are intimately aware of opportunities and threats related to legislation and regulations. If you don’t follow the rules, you could conceivably lose your business in a matter of months. That doesn’t happen often, but it can happen. When you work with a PEO and have a process in place related to payroll, benefits, risk management, workers’ compensation, employee coaching and counseling services, you can keep your eye on the ball in your particular area without worrying about potential penalties or threats related to HR legislation. It’s like using an FDIC-insured bank, as a PEO assumes some of the risk related to HR issues.
Take payroll for example, if you withheld moneys for taxes and didn’t submit them to the government, it’s a federal offense. I’ve seen this happen often. Most of the time, I believe it happens by accident, but there isn’t a risk of this happening when you work with an effective PEO. As another example, you might not know about some FMLA rules that you inadvertently ignored. An employee who bears the brunt of your ignorance might bring a suit against you for failing to comply. A PEO helps take on some of the risk related to these types of issues.
5. A PEO’s process adds value in the eyes of investors. When investors are shopping for opportunities, their due diligence process is thorough. When they see that you work with a PEO, you are demonstrating that you are focused on growing your business (not HR admin tasks) and you don’t have any HR skeletons in your closet. Having a PEO’s input as a third party also can appear as more reliable than information submitted to a potential investor directly from the business seeking funds.
6. Having a PEO in place is impressive for prospective employees. For businesses that want to grow, seeking out and hiring top employees is key. When a potential hire sees that you have health care plans, direct deposit, an employee handbook and other HR-related items in place, they regard you as credible. They can see that you have your house in order as it relates to one of the most important aspects of your business – your people. A PEO helps put that internal structure in place.
If you have questions about how a PEO relationship works, please contact me, Scott Ingram, at 317-585-1688.
January 8th, 2013 by Mike Yoder
Outsourcing human resources isn’t the right choice for everyone, but it is an option that all business owners should carefully consider as part of their overall growth strategy. If you’ve ever asked, “Should I outsource my HR?” following are six of the Twelve Identifiers we at Servant HR use to help prospective clients figure out whether they are a good fit for our PEO services. These indicators would be useful for any business owner considering working with a PEO. (To get the complete “Are You a Good Fit: Servant HR’s Twelve Identifiers” digital workbook, download it now for free.)
Human resources can be tricky. If you don’t make it a priority for your business, serious legal and financial repercussions can result. When an employee termination is bungled, a tax change isn’t heeded or payroll is mismanaged, that’s an HR issue. When you add a new employee, revise benefits or are faced with worker’s compensation issues, that’s HR too.
Not everyone needs to outsource their human resource services. If you own a small company that isn’t going to grow, and you don’t mind managing the paperwork and compliance issues that come with having employees, then you’re probably okay. If you don’t fit into that mold, read on to see if you identify with one or more of the following Twelve Identifiers.
Ask yourself these questions and — here’s the important part — answer each one honestly. If your answers show that you do relate to one or more of these scenarios, contact us. We would be happy to discuss your situation and see how we can help.
You aren’t spending as much time generating revenue as you should be. As a business owner, your energy is best spent carrying out revenue-generating tasks. Getting bigger and better requires focus and time. If you need to put more energy into capturing market share, increasing sales or flexing your marketing muscle, you may need Servant HR. Would product or service improvements make you bigger
and better? Would your people be more efficient and happier if you had time to dedicate to their development? If you know that you could be more effective and work more in depth with clients if you only had more hours in your workday, outsourcing your HR might be a good option for you.
What are you not doing to improve your business or your life because you’re taking care of HR tasks? List 3 things:
Were you able to list 3 things? If so, you should consider outsourcing your HR.
You have more risk than you bargained for. When you’re engaged with Servant HR, you get knowledge on demand. There are real deliverables, tangible tasks and constant access to HR resources and advice. There is also the peace of mind knowing that you aren’t solely responsible for all HR-related issues. As a “co-employer,” Servant HR partners with small and mid-sized companies through an administrative employment agreement. This arrangement makes Servant HR the coemployer of all of a company’s working staff. As a result, employment responsibilities are shared between Servant HR and the client. This allows the client to manage the work performed by employees and farm out the HR obligations. Servant HR assumes responsibility for a wide range of employer responsibilities and risks; pays and reports wages and employment taxes out of its own accounts; and administers clients’ benefits to employees. Are you taking unnecessary risks? Does co-employment sound smart to you?
1. Relying on your own knowledge to make wage and hour decisions?
2. Assuming job descriptions are not necessary?
3. Assuming your forms and documents are sufficient to reduce compliance risks?
4. Under the belief that your “good relationships” with employees are sufficient to eliminate risk of lawsuits?
If you answered “Yes” to any of these questions, you are assuming too much risk as an employer
You want to be a top employer. Your internal and external audiences know that you make a high-quality product and provide a great service, but what about your reputation as an employer? Take a look at how your employees characterize you and how current and potential clients describe you as a leader of your team. Is your business considered to be a great place to work? Managing administrative HR tasks by yourself can give the impression that you aren’t as professional as you should be. Correct that false impression.
What do others think about you as an employer? List 5 adjectives:
If these answers aren’t what you want to hear, you should consider outsourcing your HR services.
You manage multiple vendors who handle separate HR-related services. You’re proud that you are big enough to need all of this help, but managing relationships with more than one vendor isn’t worth the hassle. Streamlining not only simplifies the situation, but it also can help you identify areas that have been falling through the cracks.
What services and areas of expertise are my HR vendors providing?
If you can’t thoroughly and confidently answer this question, that’s a red flag.
You aren’t doing what you should when it comes to worker’s comp. This is a big one. If one of your employees gets hurt on the job, are you prepared? Do you want to carry all the risk if you aren’t completely sure of your preparedness? With a barrage of forms, compliance requirements and law changes, worker’s compensation management and reporting is best left to professionals.
What are you doing when it comes to worker’s comp?
If you can’t thoroughly and confidently answer this question, that’s a red flag.
You can’t answer your employees’ HR questions. As your company grows more sophisticated, so do your employees. Can you answer the questions they are asking, or are you wasting time tracking down answers that you’re only vaguely sure are accurate? Your workforce requires a more sophisticated process and sound HR knowledge.
1. What is the IRS’s differentiation between employee and independent contractor?
2. When is an employee appropriately considered salary and exempt from overtime?
3. What is enough documentary proof to terminate an employee with minimal legal risk?
4. What is the difference between PTO and vacation or sick time?
5. What criteria do you use to prioritize employee benefits decisions and compliance?
6. How do you remove a long-term employee with integrity?
7. What are employers’ federal, state and local reporting requirements?
8. How do you discipline employees without setting precedent that ties your hands in future situations?
If you can’t thoroughly and confidently answer these questions, that’s a red flag.
Congratulations! You are halfway through this self evaluation. Don’t lose your momentum. Download the complete “Are You a Good Fit: Servant HR’s Twelve Identifiers” digital workbook for free now.
January 4th, 2013 by Jayne Blazier
Is unemployment tax all doom, gloom and writing checks to the government? Staff Accountant Jayne Blazier offers up three positive aspects of unemployment tax and ways you may be able to decrease the amount you pay.
December 19th, 2012 by Scott Ingram
I am often asked what size company needs a PEO. Is it the right fit for startups as well as big corporations? When does it not make sense? Due to broad issues including health care reform and the nature of the modern workforce, my answer to that question is changing. Here is a by-the-numbers approach to sizing up a PEO for your business. But first, a little about healthcare reform.
What Healthcare Reform Means to the Numbers
In three words, the Affordable Care Act makes answering the question of what size company needs a PEO much more difficult. With healthcare legislation, the importance of a PEO grows as there is an additional layer of compliance related to health benefits. Compared to staff size, the more important question business owners need to ask themselves is: “Who is going to be my expert on healthcare reform?” With many changes on the horizon, businesses need to consider if it makes sense to use a PEO to handle all of those things an internal person doesn’t need to be learning and focusing on.
A PEO model makes a lot of sense for many startup companies with as few as 3-5 people on staff. These businesses are focused on providing a service or product that will help them get off the ground and grow. They aren’t resting on laurels or riding any easygoing waves of revenue growth. A PEO is a good fit because it allows entrepreneurs and small business owners to keep their eyes on the ball doing what they love instead of worrying about benefits, federal regulations and payroll.
Owners of emerging companies and startups typically can see the value of outsourcing their HR. PEOs are good at working with rapidly growing businesses that need to focus on raising money and reinvesting so they can grow. PEOs understand that. As the business grows, a PEO’s service to that business tends to grow as well.
This is a PEO’s sweet spot. When a business has 20-75 employees, a full-service PEO can do everything it is made to do for a client. The PEO can be fully engaged in every aspect of the client’s HR.
This is the kind of business that needs every part of a PEO: HR management, benefits, payroll, risk management and retirement services. They are big enough to feel the growing pains of having employees, yet they aren’t so big that a full-service PEO that carries many of the risks associated with having a staff isn’t the best fit. This category covers most of Servant HR’s current clients.
When a company has 75-200 employees, discussions usually start within its finance department to determine if it makes sense to go out and hire a full-time HR expert. This analysis is legitimate — but requires a complete analysis of the costs and benefits of such a decision.
A company must avoid the misconception that anyone with HR experience can do the job well. If you are going to keep your HR services in house, be sure your hire is a highly qualified expert. When you have an HR generalist or a less experienced person, you are losing out on a PEO’s experience solving HR challenges on a daily basis in many different industries. In many cases, this kind of hire isn’t economically feasible, which brings companies back to the PEO model.
As a company continues to grow, it may be able to pay a professional HR person to handle at least 20 hours of task-oriented HR work as well as more strategic recruitment and training. That makes sense. The question to answer is what happens as the company continues on the upswing and those necessary tasks become too much for one person — at least this highly qualified person you hired to handle all of your HR needs. Does the business owner want this person to focus on payroll and worker’s comp, which have to be done, or more strategic areas such as development and coaching? What is the priority? When this tipping point begins to happen, these are the sorts of things business owners need to consider and a PEO still remains of great value.
Once a company gets past 200 employees, it almost always has internal HR people. Different tax advantages for companies of this size also come in to play when considering whether a PEO is the right choice. Often, it makes sense to move from a PEO model into an ASO (Administrative Services Organization) model. What that means is the HR service provider meets the administrative and HR needs of the client while the client retains all employment-related risks and liabilities.
If you are asking yourself whether a PEO is a good fit for you, contact me, Scott Ingram, at 317-585-1688 to find out more.
November 27th, 2012 by Website Editor
Human resources isn’t what it used to be. If your HR relies on the traditional model, you’re probably missing opportunities for growth. Watch Mike Yoder, Chief Executive Officer at Servant HR, discuss 6 principles that a modern workforce should heed in this video.
- Engaged employees are the key to business success.
- Starting with a process to recruit, onboard, train and retain
- An HR focus on developing that talent…
November 7th, 2012 by Website Editor
If you’re a startup business, you have probably already experienced the stress of all of the details you have to manage. You didn’t go into business to become an expert in accounting, insurance or HR. When it comes to HR, there are three critical steps you need to focus on as a startup.
Watch Jeff Leffew, founder and president of Servant HR, deliver his three steps in this video. If you can’t see the video above, visit http://youtu.be/t9DFedWQQ0Q.
January 27th, 2012 by Jeff Leffew
By Jeff C. Leffew, Founder and President
It’s that fascinating time of the year when we start thinking about what we want to achieve in the coming year. Many of us go through the well-worn process of stating the weight we want to lose and how many more hours per week we want to spend with our families. On the business front, we talk about revenue goals and tightening up our belts on overhead expenses. More aggressive types may expound upon their plans for expansion. There is no end to what we may say is our focus for the coming year, perhaps even incorporating these into vision statements or business forecasts.
Semantics can get in the way of progress. Is it important to decide whether the door is scarlet, paprika or plain old red when all you need to do is open it? But when it comes to goals and resolutions, a better understanding of their meanings can be important
A goal is “the purpose toward which an endeavor is directed; an objective.” A resolution is something that you “make a firm decision about.” In other words, to set a goal is to purpose yourself to move in a certain direction, whereas to make a resolution is to decide your desired endeavor will come to pass because you will it to be. A resolution, by definition, is much more definitive than a goal. I think it is important to understand the difference between these terms before rattling off a list that will supposedly guide how you improve yourself and your business each year. Ask yourself whether you will be effective by setting a goal or by making a firm decision. The choice is yours.
My primary resource for developing my goals each year is the Bible, specifically Joshua 3:5 and Luke 14:28. I use these two verses to motivate and give me purpose behind why I set goals. They remind me that I need to be prepared to be used by God and to give my all to Him. Thinking about a new year, I also hearken back to Brian Tracy’s Eat That Frog!: 21 Great Ways to Stop Procrastinating and Get More Done in Less Time. This book always reminds me to get the “hard things” done sooner rather than later.
Regardless of whether you are a goals person or a resolution person, the more important issue is that you take time to evaluate, plan and prioritize what you hope to achieve in the coming year. Just wishing it will happen generally gets you to the same place you are now.
July 25th, 2011 by Jeff Leffew
By Jeff C. Leffew, Founder and President
Renewal can mean a fresh start, self improvement, even the coming of spring. But if you’re a business owner or involved in human resources, renewal can also mean double-digit rate increases, tough questions and unwelcome legal surprises. Before you get in too deep in the healthcare plan renewal process this quarter, here are answers to some questions to make it a more positive experience — or at least a more informed one.
Will my rates increase from last year?
Unless you have three wishes from a magic genie, the answer is yes. So many factors go into determining how much your healthcare plan will be. But the bottom line is there is always an increase if you stick with your plan, supplying the same benefits to your employees year after year. It is our job at Servant HR to stay on top of benefits-related trends, canvassing carrier communications, CPA firm data, law firm releases and government information. All roads point to higher rates.
How will healthcare reform affect my renewal?
The effects of the Affordable Care Act are ongoing and will continue to be felt by employees and employers as changes roll out over the next few years. Not until a group goes through a renewal will it see the impact of those changes. There are many things that health care reform has done and will do. Four key elements for business owners include the following:
1. Dependent children can now be on their parents’ plans up to age 26. This can be good for a young adult but costly for a business owner. Adding more people onto a plan means actuaries have to try to figure out potential added risk.
2. Insurance companies no longer can recognize any preexisting conditions for anyone up to age 19. That means they can’t deny or modify coverage. Eventually, this rule will be applied to everyone. It can be an emotionally charged issue from any point of view. Under this new rule, the underwriter has to take on all risk on anyone up to age 19. For example, if a 16-year-old girl had back surgery, any sort of ongoing repercussions such as therapies or additional surgeries aren’t directly factored in when an actuary is estimating the financial impact of insuring the girl. For the girl and her family, that can be a big relief. On the other hand, one result is that the actuary will factor in a cushion to help cover any potential risk not directly divulged by an individual. As you can see, that can lead to higher rates for all.
3. Preventative care is covered at no cost. Health screenings, vaccines and many other services are now part of a built-in mandatory cost. For folks who are taking responsibility for their own health, that’s a good thing. It’s also a win for employers who want their employees to be healthy — and working. One downside to this required cost is that many employees won’t take advantage of the benefits. They will miss annual checkups, skip tobacco cessation interventions and ignore medical recommendations. These people will affect healthcare costs because many of them will need care down the road for problems that could have been prevented.
4. There is no out-of-pocket maximum. Typically in the past, there was a limit on how much an individual could be required to pay out of pocket, usually a $2 million or $5 million lifetime cap. That cap is now gone. Lifetime dollar limits are now removed on essential health benefits so underwriters are estimating real risk with no limits.
In a nutshell, these new requirements and mandated coverage areas are causing premiums to increase because new coverage is required. During your renewal period, this will become more evident when you see your rate increases.
How do I stack up against other employers?
Across the United States and right here in Indiana, employer contributions to group health programs are decreasing. The poor state of the economy is the main culprit. Employers are required to pay at least 50 percent of the a plan’s employee-only portion or premium, but only the unhealthiest employees will sign up for a program in which 50 percent is paid.
Employers can decide how much beyond the 50 percent they want to contribute, but they are getting so squeezed that contributions are falling. Employees are also dealing with higher deductibles as well. All of this leads to decreased participation.
What does decreasing participation mean for me?
When employees don’t take advantage of health insurance, they are willing to risk it. They assume they will just figure out what they need to do when the time comes. It isn’t uncommon for young, healthy, single males to fall into this category. They think they are invincible. Others who don’t enroll in some sort of benefits program may consider it too expensive. As premiums go up, healthy people are willing to risk it. When a smaller group of people are paying in, premiums go up. It’s a bad cycle.
This sounds like a big headache. What is Servant HR doing to make sure I am making smart decisions during renewal season?
The previous Q-&-A covers the main factors employers will be hearing about increased rates from their insurance companies this fall. Here at Servant HR, we are in the throes of renewal season, and if you’re a client of ours, rest assured that we are doing our due diligence to be sure they are in the best possible position during renewal time.
For each of our clients, we are evaluating their current plans and recommending any needed changes. We are analyzing where and how our clients are spending their dollars to see if they are using them in an equitable manner based on the company’s goals and values. For example, if a client wants to be considered a cream-of-the-crop employer, it has to have a high-quality health plan and pay in a lot to help its employees.
We are looking at plan designs to see if they are consistent with market trends. In the current market, the traditional $500 deductible is no longer standard. Now we’re seeing deductibles of at least $1,000. So a company moving from $500 to $750 would still make them a premium employer. If you are more concerned with saving money, we may recommend that you put less emphasis on the plan and more emphasis on saving money for employees’ health down the road, a concept commonly referred to as “consumerism” for health care dollars.
Other possible recommendations include going with a higher deductible so premiums are lower. Or we might take you to market, essentially taking your information to other carriers to check out better rates. Servant HR considers every angle that could affect a business before recommending a company renew of change plans. Healthcare benefits are not one-sided coin. Clients are confused and frustrated when it comes to health care plans. Rest assured SHR is positioning them in the best possible position in light of what we do know about health care reform.
For more information on our process, please contact us. For further research, visit HealthCare.gov, Anthem’s health care reform site at MakingHealthcarereformwork.com or its employee-focused site at healthychat.com.
May 11th, 2011 by Jeff Leffew
By Jeff C. Leffew, Founder and President
In the business world, what is focus? Is it important? Does better focus result in more success? Maybe you have asked yourself these same questions and have come to the same conclusions as I, or maybe it means something entirely different to you. Regardless of what “focus” you need to gain in your life, realize that the only way you will find it, is if you’re intentional about finding it.
As a perfectionist personality type, aka “anal-retentive,” sometimes I get caught up in trying to control every aspect of my business. Of course, this is not possible in today’s business climate. (Certainly not if you want to have more than just a self-made job!) Therefore, I realized that I need to gain more focus. I decided that I need to get rid of, or outsource my non-core, yet essential, operational functions.
This journey to excellence and better focus began with getting an outsourced or part-time controller. Thanks to Tim Garrison and his team at The Controllership Group, we have a second -to-none financial structure that we would have never gained on our own — not without an immense amount of stress and distraction from our core focus. Our next move was to outsource our marketing to Raquel Richardson and her team at Silver Square. These folks live and breathe marketing; not me, we are HR people! Let the experts shine, pay them what their worth and then capitalize on your newfound focus to capture more market share in your industry.
What are you focusing on? Certainly, the result of more focus can be more time, time to work on that “wish list” set of projects that seems to always elude you, but could have the potential to revolutionize your company for the future. More focus could mean you have the opportunity to be more intentional about what you do in your work — you know, having more days you control than they control you! Focus may mean a clearer mission and vision for your staff to embrace. Or, it can mean a clearer picture for your client prospects as they try to better understand what makes you distinctive in the marketplace. And for many, better focus might mean more time at home enjoying the truly important things in life, things we will be remembered for long after our businesses have disappeared.
At Servant HR, our tagline is “Creating Freedom to Focus.” We create this freedom by becoming a full-service outsourced human resource department for small to mid-sized companies. What we do is not rocket science, but it is essential and can yank you off the success ladder if not done right. The freedom we hope to create beyond just helping eliminate HR administration headaches is great. We free our clients from the off-the-charts stress that comes with limitless business risk. We gladly share some of that risk.
The freedom to focus concept understands that different people will value this in different ways. Some of our clients came to us because they wanted a single-source organization to manage all HR administration — eliminating their need to deal with the hassle of multiple vendors. Others were dealing with a specific need such as payroll or employee document management and now they enjoy a full-service solution. Still others bought HR administration and stay because of our HR coaching and counseling. Imagine if you had skilled HR people that understand entrepreneurship and the struggles of business, coaching you on how best to coach your staff to success, without paying extra! Many have told us that this is freedom to focus. Be sure you’re focusing on your top priorities. It’s the only way to grow.