“Servant HR is like Peanut Butter to my Jelly. They are masters of their domain and they love Jesus.”
August 6th, 2013 by Mike Yoder
Business owners have to take risks to grow, but not all risks are worth the gamble. When it comes to outsourcing HR services, as with all business decisions, smart entrepreneurs and owners take calculated risks — not leaps of faith.
Risks worth considering
The kind of risk business owners like and should be willing to take should feel more like opportunities to gain than to fail. A cost-benefit analysis should be applied to any situation from which you could lose. For example, insurance is a hedge against risk. You make payments to your provider so that you reduce liability for things such as property damage. Other such risks worth considering include things including
- moving into a new market
- purchasing new software
- changing processes or systems
- increasing your marketing budget
Risks to avoid — always
On the other hands, some risks are fraught with danger, with no benefits available. Anything in your business related to taxes or your company’s general welfare isn’t worth the gamble. If you don’t have general liability insurance, for example, serious company-killer risks can emerge. Simple errors and omissions can put your company at considerable risk.
HR Risk Management
If you are considering outsourcing HR services, the big questions to ask yourself are:
- What are my responsibilities and risks as an employer?
- What are my risks and responsibilities if I outsource?
From a HR professional’s perspective, employers carry three major areas of risk.
1. IRS/TAX COMPLIANCE. When issues of compliance and withholding funds for tax purposes come into play, there is no benefit to being risky. The short-term effects of mishandling tax issues include penalties and additional taxes. This is also where audits with employee classification come into place. If you have misclassified someone as an employee or contractor, you can owe back wages, benefits and taxes, and may be required to pay interest and penalties.
WHEN YOU OUTSOURCE: A full-service PEO collects and passes on payroll taxes, workers’ compensation payments and other IRS-related items so the employer doesn’t assume all of the risk involved. While you can’t outsource every aspect of IRS liability because you still have some control over your workers and workplace, you are receiving consulting advice on statutes, which helps you make smart HR decisions.
2. EMPLOYMENT LAW. Federal, state and local employment laws can be a hairy, complicated combination of rules and requirements. Compliance issues cover employee handbooks, required signage in workplaces — workers’ compensation, employee rights, minimum wage amounts, etc. — and processes related to hiring, disciplining and firing employees. If you aren’t diligent, you can end up with fines, penalties, lawsuits related to wage/hour issues or discrimination, attorney’s fees, lost business and opportunities. These are company-killer issues you don’t want to risk.
WHEN YOU OUTSOURCE: When you outsource these kinds of legal compliance items, you are obtaining access to the knowledge and experience to reduce your risks of legal liability.
3. COMPANY CULTURE AND RETENTION. If you choose to cultivate and manage your company’s culture and manage employee retention on your own, you should expect to spend a lot of time and money to do it well. You want to train your team to be their best, and you want to keep them on the payroll. A lot of studies show that replacing an employee is often as expensive as a full-year’s salary of that employee. Between ending a relationship with one employee, and recruiting, training and getting up to speed a new employee, you are losing precious time and opportunities — plus the financial burden of that process.
There’s a real financial cost to creating the right place to have the right talent. An engaged employee is going to be a more valuable employee. In fact, a Gallup poll of more than 17 million employees showed that engaged employees are more profitable, productive, customer focused and safer. If you aren’t doing everything right when it comes to support your company culture and retention rate, you are definitely carrying serious risk.
WHEN YOU OUTSOURCE: A PEO is a full-service human resources service provider, which means it doesn’t stop at legal compliance and payroll issues. It provides consulting and direction to ensure your company’s goals are being supported by a strong culture, and engaged employees are keys to that overall picture. If you outsource the risk related to building and maintaining a valuable culture, you are putting those responsibilities in the hands of professionals who know that the occasional ice cream social isn’t going to prevent employees from finding other employers.
What are your responsibilities and risks as an employer? What are your risks and responsibilities if you outsource? If you would like to learn more about how a PEO can reduce your risk, please contact me, Mike Yoder, at 317-585-1688.
June 11th, 2013 by Jeff Leffew
The wheels of health care reform are constantly turning, leading to new and revised requirements being rolled out on a rather irregular basis. What was market driven up to this point will be directed by federal government health care reform in the future. In the past, employers of at least 50 full-time or the equivalent of 50 full-time employees had a choice whether to offer insurance. In the future, the choice will be laden with costly consequences. Health care reform is another large government regulation that will have an impact similar to that of Cobra and the FMLA on businesses. It’s a game of play or pay.
While there are still many unknowns, we do know several big changes business owners can prepare to see come to pass in 2014. Here are three ways you can prepare for health care reform in 2014 and one overarching “Bottom Line” choice to consider.
1. In light of the individual mandate, take a hard look at insurance benefits for employees.
The biggest thing to happen in 2014 will be the individual mandate. In 2014, virtually every American will have the “choice” to obtain health insurance coverage through one means or another. If they choose not to obtain health insurance, they will be subject to a related tax. Under this individual mandate, individuals will be able to purchase coverage on their own or through their employers.
If they don’t carry insurance, they will have to pay a tax. For example, if a 20-year-old male in excellent health chooses not to purchase insurance, he will have to pay a punitive tax. Other likely candidates who will choose to or have to pay this penalty include the superrich and the poor.
At this time, if you want to find private insurance, you have to go through a broker, which, some argue, is typically a rather clumsy process. As a result, the federal government is creating exchanges. These exchanges are essentially online sellers of insurance.
Unfortunately, creating a more transparent, fluid marketplace for insurance will not have the same effect this same approach has had on online sellers such as Travelocity and Amazon. The math needed to lower the cost of insurance simply doesn’t add up. The risk carriers take on is simply too high and unpredictable. In fact, projections are that insurance rates will go up as a result of the individual mandate. As insurance becomes more regulated, competition will likely go down.
2. Better understand upcoming market reforms so you can make smart decisions.
Another major change related to health insurance is market reform, which includes a number of changes. The Patient’s Bill of Rights falls under market reform and is designed to, among other things, protect children (and eventually everyone) from obtaining coverage if they have a pre-existing medical condition. The market reforms going into effect in 2014 also prevents annual dollar limits from being set on annual medical coverage of essential benefits such as hospital, physicians and pharmacy benefits.
Under the law, if a plan includes children, a parent can cover children on their health insurance plan until the child turns 26 years old. Prevention regulations in 2014 will require new private health plans to cover certain evidence-based preventive services. Rate reviews will be put in place to improve insurer accountability and transparency.
These are just few of the reforms coming down the pipeline for employers. It is important to familiarize yourself with these upcoming changes, as your employees will have questions about how these changes will affect them. Be prepared to help them understand why costs are going up and where the blame lies so you don’t feel the brunt of it.
3. Budget now to pay new taxes in 2014.
There are a number of new federally imposed taxes that will begin in 2014. These are being put into place to offset insurance premiums, which are projected to go up across the board.
- Reinsurance Assessment fee — A flat fee to be paid 2014-2016 that applies to both insurance and self-insured plans that provide major medical coverage
- The Health Insurance Industry fee — Created to help offset cost-generating provisions of health care reform
- Patient Centered Outcomes Research Institute (PCORI) fee — Designed to fund research that will compare different medical treatments and interventions to determine what is most effective
- Federally Facilitated Exchange User fee — Put in place to pay for access to exchanges facilitated by the federal government
Employers can’t avoid having to pay these taxes. It doesn’t matter how healthy your team is or how robust your wellness programs are, these new taxes need to be in your budget in 2014.
BOTTOM LINE: Decide who you are in your marketplace.
The most far-reaching, strategic action that business owners can take regarding health care reform is to think about what role they want to play and what impact they want to make in this new group benefits world and then act accordingly. Look at who you are in your marketplace and what you’re trying to be for your people. Ask yourself what all of this means from an employee retention and morale standpoint. What should you do in order to recruit and keep valuable employees?
If your business is small (49 employees or fewer), you have a real choice whether to offer insurance. If you choose to offer it, something else in your business will have to give to pay for the future pay increases that are inevitable. Perks such as gym memberships and paid parking spaces might become things of the past. If you’re a large group (50 or more employees) and you don’t want to offer insurance, you will be liable for a significant tax.
Aside from advocating change, business owners need to know how to handle the changes. Having a partner such as a PEO professional who can help them navigate these choppy waters is critical.
I can offer much more insight into how health care reform will affect your business. Please contact Servant HR more for a free consultation.
April 5th, 2013 by Website Editor
When Jeff Leffew launched Servant HR in 2003, he knew that as a business leader, he wanted to be held accountable to live out his faith in his professional life as well as his personal one. This part of his mission led him to Truth@Work in 2003. Jeff has been an active member ever since, one of hundreds around the country, and Truth@Work became a client of Servant HR in 2005.
Truth@Work is a nonprofit organization based in Indianapolis cofounded by Ray Hilbert, whose career path tested his ability to run a business on biblical principles versus worldly values. A man of strong conviction and bold vision, Ray and the Truth@Work team serve business leaders by hosting Christian Roundtables to integrate Christian faith into businesses’ daily operations. Products, programs and services help entrepreneurs, CEOs and executives develop and share technologies, achieve personal-spiritual-business “life integration” and balance, and experience a safe place to share issues and challenges.
Ray cofounded Truth@Work with fellow businessman Matt Peelen in 1998. At the time, they weren’t sure exactly how the new organization would function on a daily basis or precisely what this new model would look like. What they did know is they were searching for the next chapter in their lives and that the Lord would direct their steps.
In April 2000, Truth@Work had a roster of nine members. Slowly and organically, the Indianapolis organization grew. When a few people in other cities reached out with an interest in expanding Truth@Work to their cities, Ray said he wasn’t surprised.
“Since our inception, we felt it would happen. We didn’t know how or when. We just wanted to build the best things we could right now so we would be ready if and when it presented itself,” he says.
They ran beta tests in other cities for three years, 2007-2010, to see if the Truth@Work model was repeatable. The answer was yes. In 2010, Ray and his team decided to really scale and grow to other chapters. Since 2010, Truth@Work has moved into to about 30 cities.
“A very realistic plan is that by the end of 2014, we will be up to 100 cities. Five years from there, we will be in 200 markets,” Ray says. He calls it the “proverbial flywheel.” His team is totally focused on the job at hand. All systems are on go. They aren’t distracted by tasks that wouldn’t help them grow or risks they shouldn’t carry, so they are all going in the direction they want to go.
“The big takeaway of our value and relationship with Servant HR is it allows us to focus on what we do, which is grow and serve and build our Roundtable program,” Ray says. “We have peace of mind knowing our HR and payroll and all those pain-in-the-neck issues are off our plate so we can grow and build and sustain our organization.”
Truth@Work has seven full-time employees. To carry out the organization’s functions across the country, Ray and his team certify chapter presidents who are independent of the company payroll. Servant HR helped counsel Ray regarding why that would be a good structure.
From the start, Ray and Matt also made two critical decisions that have influenced the current growth. First, they wanted to be structured as a nonprofit.
“Because business owners and high-level executives are our audience, the nonprofit route has allowed us to stay very focused on what we do and to have very trusting relationships. There is no alternative agenda to make money,” Ray says.
Second, related to scalability, the Anderson University marketing graduate says Truth@Work didn’t make itself visible or findable on the web for its first several years. They didn’t want phone calls and emails without the infrastructure in place to be able to deliver on what they wanted to provide.
“We had the vision, but we intentionally didn’t position ourselves for fast, rapid growth that we couldn’t handle. So in beginning, we sent out a few letters sharing the concept and invited people to come to informational meetings regarding the Roundtable,” Ray says. Truth@Work is now highly visible on the web.
A major advantage of partnering with a PEO is to reduce risk. Asked how Servant HR helps him avoid unnecessary HR risks, Ray answers, “This the most intriguing question. My view and perspective on this is that they are doing their job right, so I don’t even know about the risks I’m avoiding.”
Most recently, Ray says Servant HR is helping Truth@Work navigate the real-world implications and impact of the Patient Protection and Affordable Care Act, helping them understand how different choices might impact or affect the organization and its employees.
Servant HR has also helped on a number of occasions when Truth@Work has had to terminate employees by putting together solid exit plans to help them maintain friendships and a healthy culture. Handling those situations with honor, dignity and respect was important.
“Servant HR has been a great fit for us because they are also very family and values oriented. Christian faith is their No. 1 priority for them like it is for us. This is all a natural extension,” Ray says.
For more information about Truth@Work, visit the website. Contact Servant HR to find out how we can help your organization stay focused.
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.
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 14th, 2012 by Scott Ingram
When you have an annual checkup, your doctor gathers a lot of information. Height and weight are measured. Your blood pressure and pulse are taken. Blood may be drawn. You answer questions about family history, current diet and medications. The doctor checks your ears, mouth, neck, heart, lungs, stomach, joints, spine, muscles and skin.
You and your doctor know that these clues work together to determine your overall health. Your doctor also uses these clues to recommend changes in your lifestyle to keep you on the healthy track. You can’t separate your diet from your blood pressure from your weight. You have to have an understanding of how these parts work together to take the best care of yourself.
Human resources works the same way. You know that benefits, payroll and risk management are part of an employer’s HR responsibilities, but if they aren’t considered together to see how the parts affect one another, your business won’t be as healthy as it could be. If your HR service providers aren’t working together to diagnose HR problems and detect HR opportunities, your business suffers. A full-service PEO or Professional Employer Organization is like a doctor asking all those questions. Consider the many services and service providers who may be working on your HR from afar, never collaborating or sharing information to make your business healthier.
In small or medium-sized businesses, in-house staff people who wear multiple administrative hats are often the ones managing human resources. In these cases, the question becomes, “What level of training or expertise does your staff person have in dealing with tough HR matters?” It’s an important question to consider because human resources management isn’t as obvious or popular as other HR areas. All business owners know they have certain obligations associated with payroll and tax liability. But they might not realize there are actually more compliance issues related to HR management than payroll and tax. The reality is that a trained HR professional can help employers avoid costly missteps related to EEOC, DOL, FMLA, USERRA, PPACA, ERISA, GINA and the rest of the alphabet soup of HR compliance and risk.
HR management becomes more complicated as your business grows. With more employees comes more obligations. If your business has reached a certain level, you may choose to hire a professional with a PHR or SPHR certification. While this may be a smart choice for larger businesses, many small and medium-sized companies can’t afford to hire a full-time HR professional.
Most businesses work with a broker to handle the benefits part of their human resources. A broker offers the employer a choice of different insurance benefits. Typically, the broker passes along some numbers to an administrative person on a yearly basis, and that person is tasked with understanding the benefits and passing along that information to any new employees or current employees who have become eligible for benefits over the course of the year.
Ideally, a broker should have an understanding of the different benefits plans available and the level of quality of different carriers. A broker should also understand the culture of your business so he or she can match that with the available benefits. Your benefits should be attractive to employees and a good fit for your organization so that your business can use the options as recruitment and retention tools.
Unfortunately, things like benefits have become so commoditized that the opportunity to maximize what benefits can do for you and your business is being overlooked. Many brokers have tried to add services on the front end with increased communication and hand-holding at the employee level in order to compete in a marketplace that offers a more holistic approach, but they often fall short.
Most businesses use some sort of payroll service to make sure employees receive the correct amount of pay on time, and to make sure related tax issues are handled appropriately. When a company chooses to handle payroll in house, it’s often a control issue by the ownership in which someone doesn’t want any confidential information leaving the company. Another reason for handling payroll in house is in a situation where the accounting is atypically complex. For example, if a manufacturer does a lot of piecework, or an engineering or construction firm needs to track how an employee is spending his or her time on projects to determine their contribution to the bottom line, an in-house software program customized to a particular pay setup might be the smartest choice.
At Servant HR, we often hear the misunderstanding that risk management pertains to only worker’s compensation and liability insurance. Employers are often getting this impression from commercial insurance brokers who — you guessed it — provide worker’s compensation and liability insurance. Employers can mitigate risk on a much broader level, and a PEO can often help businesses recognize these opportunities.
Some risk management-related niches cater to certain industries such as construction and healthcare, which require property and casualty insurance coverage. There is often a discount available to employers when they bundle this coverage, so cost savings are a big motivator for employers who may view insurance coverage as a necessary evil.
But things can be done to manage risk without buying up more insurance or bundling policies. This is where a PEO can offer guidance. Safety training can help minimize accidents. General job training can help employers ensure their employees are doing their jobs correctly. Making sure individual employees are classified appropriately helps employers apply the correct insurance to that employee. (Employees such as landscapers go under a certain code. But clerical employees in the office of a landscaping company don’t require the same coverage. A PEO can help you see these cost-saving opportunities.) Employers can follow up with claims to be sure employees who claim they are hurt are indeed hurt. Having policies in place that protect you as an employer is the best way to manage risk, which requires the expertise of an HR professional.
When most employers think about retirement services, the first things that to mind are 401(k) plans and the less popular pension plan. Companies typically use financial advisors to manage 401(k)s. These relationships often start on an individual level, with the business owner using a financial advisor for personal reasons. As the business grows and the need for retirement services arises, the business owner may turn to this same person to recommend a plan for employees.
The challenge in this way of approaching a 401(k) plan for your employees is the owner’s priorities might not line up with the business goals. The owner is looking for a way to get as much of his or her income sheltered from tax, but that shouldn’t be the only motivation. You must also consider that employees across many earning levels should enjoy the rewards of the plan. It is imperative to have someone in place who understands not only how a 401(k) plan works but also how your company is organized. Who is the best person to assume responsibility for the performance of the plan, for example? Is a 401(k) the best choice or is a business better suited to use an SRP (simple retirement plan)?
HR Management + Benefits + Payroll + Risk Management + Retirement Services
Part of the beauty of a full-service PEO such as Servant HR is that a PEO looks at all of these parts of your human resources together so that your business can be as healthy as possible. We aren’t individuals working on services in silos. PEOs connect the dots of businesses’ HR issues. PEOs are set up to take care of employees from “birth to death,” or from the job application to the retirement party. Through the coemployment model, full-service PEOs also assume some of the risk associated with having employees.
The HR services PEOs provide are getting done in any size business in some way, shape or form with or without a PEO. Payroll has to get done, worker’s compensation matters have to be dealt with, and retirement benefits have to at least be considered. In many cases, businesses rely on some combination of different vendors and often in-house staff to carry out these tasks. While this may be an effective process in some situations, it’s not always the best direction for managing a company’s HR needs.
To find out if a PEO is right for your business, download our guide “Are You a Good Fit?”
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.
April 12th, 2012 by Website Editor
In 1960, Hayley Boling’s grandfather Dr. Richard Boling had a staff of five working at his Elkhart ophthalmology practice. His son, Dr. Richard Boling II, joined him in 1986, which moved the practice forward to two doctors and about 10 staff members. Due primarily to a major push in 2004, Boling Vision Center now employs 60 staff members and six doctors. The healthcare practice includes two locations in Indiana and an ambulatory surgery center.
“He stuck a shingle on the side of the building and thought patients would come, and we have been fortunate that we have had regular business ever since,” says Hayley Boling of her grandfather.
Hayley joined the team in 2009 as CEO after earning her MBA from Taylor University. Her grandfather and father had built a successful business out of caring for eyes, and Hayley has strengthened that success as a leader within Boling Vision Center.
Hayley met Mike Yoder, Servant HR’s CEO, during a post-graduate business class at Taylor University in 2008. During this year, she was wrapping up her studies and carrying out a hands-on orientation to become the CEO of Boling Vision Center. Her father developed the process, which called for Hayley to spend a few months in every single position in the practice.
“I spent time working alongside people, to see the value of our people and their challenges. I was also pinpointing vulnerabilities and strengths,” Hayley says. “It was important to see different elements of the practice and build credibility with other people in the practice.”
With a list of HR challenges that included a growing staff, plans for future expansion and policies that needed improving, Hayley reached out to Mike to see if Servant HR could help. A business’s human resources strategy should complement and support its goals. Boling Vision Center had lofty ones, and Servant HR has served as its trusted partner during some big changes.
“Servant HR helped us completely restructure our organizational chart. This was a huge undertaking for us,” Hayley says. The new chart is based on skill-set value versus longevity. “People were inappropriately placed, and Servant HR helped me as a new leader to identify who needed to be repositioned. And if there wasn’t a position conducive to their skill set, Servant HR helped me dismiss those individuals appropriately. It was a tough situation, and it was good to have a legal perspective and a second set of eyes to support my decisions.”
Servant HR also helps Hayley navigate advances and changes in human resources and is just an email or phone call away if a sticky legal question arises. Hayley says the HR team helps Boling Vision Center stay as professional as possible and play it safe. But business risks aren’t something Hayley avoids when they are worth taking.
“In the next five years, we would like to have four locations. Our next step is moving toward the South Bend marketplace. And we are excited to partner with that community,” she says. Boling Vision is already the preferred ophthalmologist for Notre Dame, so they have luck on their side.