Federal 2010 Budget Provisions Effect Employee Leasing and PEO Arrangements.

Bruce Silver
Employers Rx LLC

President Barak Obamas recently announced 2010 budget proposal contains some payroll-related provisions that will have a major impact on the way that payroll taxes are reported after December 31, 2009.
Currently, there is uncertainty as to whether the employee leasing company or its client is liable for unpaid federal employment taxes arising with respect to wages paid to the client’s workers. When an employee leasing company or professional employer organization files employment tax returns using its own name and employer identification number, but fails to pay some or all of the taxes due, or when no returns are filed with respect to wages paid by a taxpayer that uses an employee leasing company, there can be confusion as to how federal employment taxes are assessed and collected.

The proposal establishes standards for holding employee leasing companies jointly and severally liable with their clients for federal employment taxes. The proposal also sets standards which will place responsibility for, and hold employee leasing companies and PEOs solely liable, for payment of taxes in some cases. The provision would be effective for employment tax returns required to be filed with respect to wages paid after December 31, 2009.

Employers Rx Among Odesk.com's 100 Best Outsourcing Blogs

HR Outsourcing consulting firm Employers Rx LLC, is proud to announce that their blog, HR Outsourcing Solutions, was included among the top blogs in the HRO and PEO field. The blog was recently named by Odesk.com as one of their 100 Best Outsourcing and Offshoring Blogs, and was recognized as one of only four in the category of Human Resources. Odesk.com’s Tamara Rice observed “Of course, Employers Rx is not just offering their services, but advice for HRO agents too. Go straight to this HR outsourcing archive and start reading–not all articles are original content, but all are relevant.”. Also honored were blogs from HR Outsourcing, Outsourcing-HR, and industry-leading professional employer organization TriNet HR.

The popular blog, HR Outsourcing Solutions, has been an informative online resource from it’s first entry in July 2007. On an early Sunday morning, company founder Bruce Silver sat down at his computer. “I had just finished reading an article on Bnet.com about Google’s website Blogger. I came up with the crazy idea that I could do that too. The result wasn’t pretty, but it was a start” he said. From that time forward the blog has provided it’s readers with helpful tips for small business owners and entrepreneurs. Topics have included saving on group health insurance, HR compliance, payroll, workers compensation, and how to shop for an employee leasing company or professional employer organization.

HR Outsourcing Solutions will be incorporated into their newly redesigned Employers Rx LLC website, which is scheduled for launch next month. Make sure to visit us by bookmarking our website: http://www.employers-Rx.com.

A Day In The Life Of A HRO PEO Consultant

Bruce Silver
Employers Rx LLC

On any given week, Employers Rx LLC has between five and ten accounts in various stages of our (RFP) request for proposal process. If you have personally shopped for an employee leasing company or professional employer organization, then you know first hand, what a daunting experience it can be. You’re aware of all the questions they ask, the forms you have to complete, the company and employee information they require, the emails, phone calls, reams of paperwork they create, all the time wasted and productivity lost.

Now imagine dealing with six sometimes eight different HR companies, responding to questions from underwriters, risk managers, sales managers, all wanting in depth information about your company, in a certain format, on their forms, and the list goes on. If that is not enough, imagine what it can be like when you are doing this for eight or ten clients a week. Welcome to my world.

Our clients this week include an intimate apparel company with locations in NYC, PA, and Bentonville, AR, a 5 state property management company based in Chicago, a public company who provides medical staffing nationwide, a manufacturer of ATV accessories in IA, a publisher in Stuart, FL, a medical supply company in Rochester, NY, and 2 more. These accounts represent almost 400 full and part time employees with over $25 million in annual payroll. Our first goal is secure the most competitive rates for our clients, bona fide offers the first time,without any conditions, additional fees or hidden costs.

A typical day starts around 5:30am, after walking the dogs, I sit down with my first cup for freshly ground coffee and check the batch of overnight emails. I am greeted by a message from one of the “Big 3” PEO’s complaining that our client’s RFP has their health statement filled out on a competitor’s form, and that his underwriter would not accept it. As with many of our clients, providing affordable health insurance coverage for their employees is a major problem. In this case, the client has been happy with Aetna for years. Usually, we send out our own generic health questionnaire. Since this client’s RFP will only be submitted to PEO’s that have a master plan from Aetna, we opted for an “official” Aetna group health statement. Never again.

Unfortunately, this was only half of the complaint. The “Big 3” PEO also requested the client’s most recent payroll run. Our client has some seasonal employees, and was thorough enough to provide us with a breakdown by state and code of their expected annual payroll. This was in addition to providing the last quarterly report. Because it wasn’t their last weekly payroll run. My rep would have to call his VP for an exception. After a flurry of emails, phone calls, and even a personal visit by their executive VP, I am happy to report that exceptions were made, and our client has finally received a competitive proposal.

My next email was from another professional employer who I call “Big 5”. He too is complaining that our client provided information on a competitors form, but was willing to make an exception. However, he had issues with another client’s RFP. Once again, group health insurance is a primary concern. Our client has 5 former employees covered under COBRA, and the “Big 5” underwriter wants birth dates and termination dates before they can make a firm offer with set rates. It has only taken us six weeks to get to this point, another few days won’t make a difference? NOT.

What frustrates us the most is trying to get all of the required information from our clients. Very often we are working directly with the business owner who is wearing so many hats, they rarely have the time to compile the payroll, workers compensation, and health insurance documentation we need. Even when dealing with a company’s HR Director, comptroller or office manager, getting all the forms completed and returned in a timely manner, despite all the technology, still remains our greatest challenge.

We welcome any and all suggestions, and if you’re a prospective client, we appreciate your cooperation in assisting us to do the very best job we can, for you and for your organization. Thanks again for the opportunity.

Employers cannot prematurely claim COBRA credit

Bruce Silver
Employers Rx LLC

The American Recovery and Reinvestment Act of 2009 has added to the already complex and overwhelming administrative burden that employers are responsible to comply with. COBRA regulations are just another example of the patchwork of regulations designed to plug the holes in our corporate for-profit health insurance system. Notice! I did not say "healthcare" system.

Notice! I did not say "Healthcare" system.

A "Healthcare" system addresses the actual delivery of health care services. Insurance companies have nothing to do with providing services, they are simply put .... a funding mechanism. These companies, indeed institutions, have developed and implemented a convoluted system for transferring payments from "consumers" to service providers while wasting billions of dollars on claims administration, legal, lobbying, marketing, sales and underwriting expenses. This doesn't account for billions more in executive salaries and stock options, and billions more expended by doctors, labs, hospitals, and pharmacies in order to navigate their systems.

We "Can" Do Better!!!

Until then, read the latest from the Department of Labor and the Internal Revenue Service.

Employers cannot claim the new COBRA premium assistance credit until they receive the 35% payment from the former employee, Treasury Department and IRS officials said on April 6. Additionally, being called up to military duty may be an involuntary termination triggering eligibility for the credit, they clarified. The Treasury and IRS officials spoke during a webcast about COBRA premium assistance sponsored by the Department of Labor (DOL).

Premium reduction. Individuals who are involuntarily separated from employment between September 1, 2008, and December 31, 2009, may be eligible for temporary COBRA premium assistance. The American Recovery and Reinvestment Act of 2009 (P.L. 111-5) (2009 Recovery Act) allows dislocated workers to pay 35% of their COBRA continuation premium and be treated as paying the full premium. Employers will pay the remaining 65%.

The 2009 Recovery Act also provides a limited second-chance window to elect COBRA coverage. The subsidy is generally available for nine months.

The IRS and the DOL have posted frequently asked questions (FAQs) and other information about the COBRA subsidy on their websites The IRS issued formal guidance on April 1, 2009. "We focused on issues we could reach quick consensus on," Russell Weinheimer, senior counsel, IRS Office of Chief Counsel, said.

Payroll tax credit. Employers will be reimbursed for their 65% COBRA premium assistance through a payroll tax credit, Patricia McDermott, special counsel, IRS Office of Chief Counsel, explained. However, the credit cannot be claimed until the employer receives the 35% payment from the covered individual, she cautioned.

In some cases, entities other than employers will claim the credit, McDermott explained. If the COBRA coverage is provided by a multiemployer plan, for example, the plan provides the subsidy and is reimbursed by taking a credit on Form 941.

Rather than claiming the credit, an employer may offset payroll tax deposits during the quarter by the amount of the premium, McDermott said. Additionally, the employer can elect to have any excess credit applied to next quarter liabilities, rather than accepting a refund from the IRS.

Military service. In March, Treasury Department and IRS officials indicated that being called to military duty is not an involuntary termination for the COBRA subsidy. Now, the government has revisited that position, Kevin Knopf, attorney-advisor, Treasury Office of Tax Policy, said. "We are going to consider (call up to military service) involuntary termination of employment."

Premiums. Generally, plans can charge 102% of the total cost of coverage. The employee's 35% share is calculated against the 102% amount, Weinheimer explained. "If the employer charges less (for COBRA continuation coverage) than the maximum amount allowed by law, the 35% reduction applies to that lower amount."

Notices. The 2009 Recovery Act requires employers to send a general notice to all qualified beneficiaries, whether they are currently enrolled in COBRA coverage or not, who have a qualifying event between September 1, 2008, and December 31, 2009. The general notice goes to qualified beneficiaries and not just covered employees, Amy Turner, senior advisor, Department of Labor, explained. A qualified beneficiary may be an individual whose qualifying event was divorce or aging out of dependent coverage.

A notice of the special second-chance COBRA election must be provided to any covered employee who did not elect COBRA coverage between September 1, 2008, and February 16, 2009. Individuals who elected but later discontinued COBRA coverage also must receive the second-chance notice. The notice of extended election must be provided by April 18, 2009. The DOL has posted model notices on its website.

Can HR outsourcing help companies endure the recession?

When The Going Gets Tough, The Tough Call For Help

By Livia Gershon
Worcester Business Journal

“I’m so excited about this year. It’s great.”

That’s a sentiment you won’t hear from many company presidents these days. But Ultan Feighery is in an unusual position. He’s the president and founder of The Human Resources Organization in Westborough, a human resources outsourcing company. And he says HRO has seen a 25 percent jump in new business in the first two months of 2009.

To Feighery, it makes sense that companies facing shortfalls would bring HR functions to an outside vendor to save money. But others in the field say it’s far from clear that business leaders want to take the jump into outsourced HR at a time when so much else is uncertain.

Cafeteria Options

The Human Resources Organization, which Feighery founded seven years ago, offers employers a variety of services to choose from. It can manage 401(k) plans, run payroll and offer on-site or on-call support. It also acts as an insurance agent, looking for good deals for clients without being commission-driven like traditional agents. Feighery said the company can help clients not just by replacing permanent HR staff but by figuring out better ways to deliver benefits.

“In 95 percent of cases we can find significant savings,” he said.

Bob Eubank, executive director of the NorthEast Human Resources Association, said there’s no doubt HR outsourcing has established itself as a viable industry over the past decade. But he said it’s not clear whether it’s become more or less prevalent since the economy went into decline. Sometimes the outsourcing possibility costs more initially for longer-term savings, and that may not be an attractive option right now,” he said.

Sandra L. Reynolds, executive vice president of The Employer’s Resource Group at the Associated Industries of Massachusetts, said she’s heard of increases in outsourcing only among businesses that feel they need to reduce their own staff. "We’re just starting to hear about companies that are kind of facing the realities that they either might or will have to do that,” she said.

Next Best Option

Reynolds said her group, which offers its own HR products, has definitely seen an increase in the use of its hotline. “When you have fewer internal resources you use external resources at a higher level,” she said. Mike S. Lanava, business resource manager at the Worcester Regional Chamber of Commerce, said he hasn’t noticed HR staffers being replaced by outsourcing in recent months. “I haven’t been so much aware that there have been layoffs of complete departments,” he said. Still, he said he does think the long-term trend is moving toward greater use of external HR resources.

Largely because government compliance rules are becoming more complicated, Lanava said, many companies are going to HR specialists for particular needs. The companies may help them develop a sexual harassment policy and provide training videos, write up a maternity leave plan or offer customized safety training.

While some law firms and a handful of large, national companies always provided those sorts of services, Lanava said, more small players have been emerging to offer them in recent years. “What I’m seeing is more smaller local things that are tailoring their packages to the local companies,” he said.

Still, there can be a backlash against the outsourcing of HR, especially if it’s not done well. Reynolds said some large companies that once outsourced HR functions are bringing them back in-house these days. “Some of them are finding that it solves some problems but it also creates some problems,” she said. Eubank said one big problem can come if employees don’t have a particular person they can go to with job-related issues. For that reason, he said, many companies use a mix of in-house and outsourced resources.

That’s just fine with Feighery. He said his company makes sure to let potential clients send them as large or as small a chunk of their HR operation as they want. After they try the company out, he said, they often decide they want to add more services.“Last year, 85 percent of our clients added more than 30 percent to the products that they bought,” he said. “You put your toe in the water.”

From the Editor.

The story never changes. When times are good, business owners seem to think that little is broken within their organization or operations. When times become challenging and budgets tighten, many managers and executives look for innovative ways of cutting costs without sacrificing service or quality.

Send us your HR outsourcing success stories to hrsolutions@employers-Rx.com or contact us directly at (877) PEO-CURE or (877) 736-2873.

Survey Finds Nearly 20 Percent of Employers Plan to Drop Health Benefits

Nineteen percent of employers responding to a new Hewitt Associates survey are planning to stop offering health benefits over the next three to five years, nearly five times as many as the 4 percent that said they were planning an exit strategy last year.

For those employers planning to continue to provide health benefits, keeping employees healthy has become the primary workforce issue in 2009, up from the No. 2 position in 2008, according to Lincolnshire, Illinois-based Hewitt’s survey, “The Road Ahead: Emerging Health Trends 2009.”

“Promoting employee accountability” was ranked the chief health and prevention component of employers’ health care strategies in 2009, followed by “offering competitive benefits” and “managing health risk.” In 2008, employers selected “offering competitive benefits” as their chief objective, followed by “promoting accountability” and “tightly managing health care cost trends.”

“In today’s environment, employers are under pressure to cut health care expenses, but they realize that short-term cost-management tactics do not address the underlying drivers of health care cost,” Jim Winkler, head of Hewitt’s North America health management consulting practice, said in a statement. “This leaves them with two options: making a long-term commitment to improving the health of employees and their families, or exiting health care altogether.”

Among other survey findings:

• More employers are targeting specific health conditions within their employee populations than in previous years. Specifically, employers are targeting asthma, cardiovascular disease, depression and diabetes.

• When employers were asked to what extent health care reform proposals outlined by the Barack Obama administration would affect their current health care strategies, 51 percent said they would have some impact, while 44 percent said it would have no impact.

• While one-third of executives think the Obama administration and Congress should address health reform in the president’s first year in office, 63 percent believe it will take place in Obama’s first term.

• Moreover, 60 percent of executive said the federal government should take the lead, while 33 percent said the federal government and the states should share responsibility.

A total of 343 benefits executives from a broad spectrum of industries responded to the survey, which was conducted from December 2008 to January 2009.

For more information about the survey, contact Maureen Mersch at maureen.mersch@hewitt.com or Mary Ann Armatys at maarmatys@hewitt.com.

Staffing - The New Growth Industry?

Bruce Silver
Employers Rx LLC

Employment agencies and staffing companies across the country are announcing a "pick-up" in volume. Of course many are admitting that it is due to the record number of layoffs, as well as an increase in applicants who are willing to accept part-time or temporary positions, while waiting for better times ahead.

Indeed, many industry observers like Jack Rainer, owner of Career Personnel Services in Montgomery, Alabama expect that it can' last. He predicted there would be some hiring rebound before the economy begins to recover. Some firms will find they have cut too deeply in layoffs and will need to replace lost staff, he said. It will take time for people to digest what is going on, but they still have needs".

What I find valuable in this Montgomery Advertiser article written by Cosby Woodruff are the observations of Anna Doeren, a stafffing specialist at Career Personnel. She recognized that job cuts have progressed beyond those in purely clerical jobs to more senior positions. "It is lower-level administration to middle managers, a lot of that has been cut."

"One area where they are seeing more demand from companies is in providing outsourcing of human resources functions. People are contracting us to be the human resources manager. Many of them have cut out their HR departments."

What Anna and Jack may not be aware of, is the increasing trend by many of the most successful and innovative companies in their industry to provide a full range of services for employees from "hire to retire". I am referring to the fastest growing industry in the gamut of HR services commonly referred to as "RPO" or Recruitment Process Outsourcing.

Recruitment Process Outsourcing refers to a business service where an employment or staffing agency not only finds a suitable applicant for a particular position at a client's worksite, it also can include training, payroll, group health benefits and workers compensation coverage. In effect, it is the recruiter who is employing the worker, and is responsible for HR compliance and adhering to Federal, State and local employment regulations.

PEOs - The Outsourcer's Resource

With few exceptions, these functions are being outsourced to companies who actually do this work. Let's face it. Most successful employment agencies and staffing companies are owned and managed by individuals who are very good at finding and placing suitable candidates for their clients. Many are great at developing relationships with employers and HR managers, but lack then administrative and insurance background to tackle all the areas involved. Only the largest firms have the resources to invest in the infrastructure and technology platforms required to efficiently support an full service RPO effort.

While the majority of employee leasing companies and professional employer organizations refuse to accept employment agencies and staffing companies as clients (many have incurred significant workers compensation claims ) there are handful of quality PEOs who have established a working partnership within the staffing and RPO industry. These firms have developed a "niche" by better understanding the unique challenges, products and services that enhance an agency's ability to compete and succeed in these demanding times.

Employers Rx has many staffing clients who have developed successful long term relationships with their PEO partners. If you own or manage an employment agency or staffing company and are considering making the leap into the "RPO" Recruitment Process Outsourcing marketplace, our experienced professionals are available to discuss your options and opportunities.

Health benefit costs continue to rise, survey shows

Bruce Silver

Employers Rx LLC

After over 25 years of trying to help small business owners and entrepreneurs to provide affordable, quality health insurance coverage for their employees, it seems that with all the changes and industry "innovations", very little has actually changed.

Health insurance still remains problem number 1 or 2 for the average business regardless of size.

I have a saying that often evokes laughter, unfortunately, being able provide and afford quality health insurance is not funny, especially if you have a sick child who needs care.

"If you want to make an enemy, sell them health insurance."

Bruce Silver, Founder, Employers Rx LLC

Why do I say this? It's because you are always delivering bad news. Year after year at renewal time , you inform your clients that their premiums have been increased. Some years, it's only 10% or 15%, lately their increases have ranged from 20% to 50%. Where are the regulators?

The bad news does not stop there. Most employers cannot afford to absorb the increase so they look to you (me) to FIX it. But how? Well the only way is to reduce coverage and decimate the benefits that employees receive. So the doctors office copay goes from $10 to $20 and today most plans have $25 and $35 co-pays. If you are going to see a specialist, you can expect to have a $50 co-pay or higher.

But that is only one side of the coin. Not only are employees paying more for everything from doctors visits, diagnostic tests, medications, and heaven forbid - inpatient stays, but they are paying a higher share of premiums as well. The system is clearly broken.

Here is another attempt by industry insiders trying to put a positive spin on more bad news from Employee Benefit Adviser

Health benefit costs continue to rise, survey shows

New data by Towers Perrin suggests that employers will pay, on average, $9,552 per employee for health benefits in 2009, a jump of 6% from 2008. Yet some employers will buck the trend because they proactively manage their benefit programs.

In its 2009 Health Care Cost Survey, the HR consulting firm reveals that high-performing companies, those who rigorously track their health benefit objectives, will spend, on average, 12% less in annual health care premiums in 2009, compared to low-performing companies.

For example, high-performing firms report a per employee cost of $8,904, compared to $10,104 for low-performing companies. The cost variation fell even lower ($7,032) at high-performing companies utilizing consumer-driven health plans with health savings accounts.

The survey defined high performers as companies who not only had a strong commitment toward improving employee health and engagement, but who also aggressively managed their health plans and the delivery process.

###

Fortunately, our team at Employers Rx LLC has found an answer for many small business owners, HR executives, and entrepreneurs.

Check out my interview with David Weir of the South Florida Business Report to learn more. Click on the You-Tube link or contact us at (877) PEO-CURE.

Workers Compensation Savings with a PEO - How Employee Leasing and Professional Employment Companies Do It?

By Bruce Silver

Employers Rx LLC

Workers Compensation Savings with a PEO - How Employee Leasing and Professional Employment Companies Do It?

You have read all of the claims how employee leasing and professional employer organizations can reduce your workers compensation costs by 10% or 20%. If your company has developed a high experience mod rate as a result of a large "shock" claim, or claims that may be questionable, it is possible to receive rate reductions of over 25% from employee leasing companies that are competing for your business. Have you ever wondered how this is possible? How do PEOs do it?

The Rule of Large Numbers

All employee leasing companies carry workers compensation coverage just as any small business is required to do (except Texas). However, because they are "pooling the risk" of hundreds of companies and thousands of employees, they have the ability to "self insure" the risk up to a certain amount, the deductible. Some PEOs purchase workers compensation policies that pay only after the first $250,000 of a claim, others are responsible for the first $500,00.

Skin In The Game

What does this mean for the small business owner who is with a PEO or employee leasing company? Because PEOs really have "skin in the game" when your employees submit a claim, and claims paid come from reserves that will be returned as profits, it is much more likely that claims will be vigorously investigated and contested than in the standard markets.

Some employee leasing companies have more flexibility than others. They can offer small employers unique WC programs containing a claims "cost sharing" arrangement that can further reduce your rates and improve cash flow. Your company assumes more of the risk, but shares in the rewards of maintaining a safety conscience and healthy workplace. Workers compensation programs like this and others, are not available to small and midsize companies because of insufficient premium. Entrepreneurs and business owners who take advantage of the benefit's of using a PEO, now have the ability to compete, and beat a larger company when bidding for that "prize" contract.

Caveat Emptor - Let The Buyer Beware

You've learned how most large employee leasing companies and PEOs essentially "self -insure" their workers compensation risk. It is equally important to understand that the ratings of the insurance carrier hardly matter because they will only be responsible for expenses that exceed the plan deductible. Since only the most traumatic claims with extensive medical bills and long term disability will be covered, it much more important to know the financial soundness of the employee leasing company or professional employer organization.

Below is a press release from Gevity, a leading professional employer based in Bradenton, FL.

Gevity Announces 2009 Workers' Compensation Insurance Renewal

BRADENTON, Fla., Dec. 30, 2008 (GLOBE NEWSWIRE) -- Gevity (Nasdaq:GVHR), a leading professional employer organization (PEO) that provides HR services to businesses nationwide, today announced that the Company has renewed its 2009 workers' compensation insurance agreement with member companies of American International Group (AIG) Commercial Insurance.

Consistent with 2008, Gevity will maintain a $1 million per occurrence deductible and will make monthly payments to AIG for program costs and estimated future claims costs in the form of loss collateral funds, which will be approximately $17 million lower in 2009. Garry J. Welsh, Chief Financial Officer, commented that "We are very pleased with the terms and conditions of our renewal for 2009. Moreover, we are encouraged that our effective risk management practices and continuing favorable trends in claims costs have resulted in lower loss collateral funding requirements from AIG."

Another Professional Employer Organization Horror Story

By Bruce Silver
Employers Rx LLC

Another Professional Employer Organization Horror Story

I came across an interesting website developed by Mr. Ed Shull called Filthy Lucre. Ed owns and operates USWeb LLC, a small online marketing and website development company based in Henderson, Nevada. Ed's website Filty Lucre not only is a showcase for his talented firm's programming capabilities and techniques, but he created a thought provoking community where visitors and members can post and exchange photos, videos and join in the "conversation".

From: "You Can't Make This Up" Department

The website has many interesting articles on a wide range of subject matters, including Health and Medicine, Lifestyle, Money and Community. While checking out some of the articles and comments, I came across a section aptly entitled The Working Affluent. The next thing to catch my eye is the headline - Complaints about TriNet HR Services.

Ed had recently signed on with TriNet HR Services for his small company at the relatively small fee of $1,860 per employee. Almost twice the average industry rate of $1,000 - $1,200 per employee.

Like I said, you can't make this up.







By Ed Shull, CEO USWeb LLC

I’m not a paperwork guy. As the CEO of a small business, with a few contractors (that really felt more like employees after a while), I decided that if I was going to take the step to have employees, I would need to do it right. I wanted to make sure I offered a competitive compensation package that included 401k, health insurance, life insurance, etc…

So I started to search around for ways solutions I came across a company that was referred to me a few years ago, Trinet. Trinet offers HR services as a PEO (professional employment organization). People often refer to this as employee leasing. Think of it as hiring whoever you want through a temp agency like Kelly Services. They take care of all the tax and insurance paperwork, and you just pay the agency a fee as a vendor. The fee was relatively small at $1,860 per employee, per year, so I decided that this would be the best of both worlds.

The Sign Up Process for Trinet

I have to say that of all the vendors I have ever worked with, none seemed so utterly incompetent as Trinet when it came to the sign up process. They would send over documents without instructions, or that were dated wrong. They would lose stuff I sent. The best part is that I would go through long spurts of not hearing from them, after confirming that everything was ready to go, and then all of sudden get a flurry of emails from them marked as urgent, saying they needed more paperwork from me.

Once, and I swear this is true, I was told weeks before that we were truly ready to go. There would be no further delays. A couple days before the payroll date, I contacted my rep there to ask about the amount they would be taking out. I didn’t hear back. But then , a day or two before payday, I get around 3 - 4 emails, all marked urgent, saying I need to call them right away. I happened to be out of town, so I didn’t get these messages until around 2pm. I called the main rep, she wasn’t around. So I called another rep I had dealt with, who had also emailed me saying I needed to call him and that it was urgent. When I got a hold of him and asked what they needed, he said, I and I swear this is true, he didn’t know. So they had spent most of the morning trying to reach me, but didn’t know why. I asked him if my payroll was going to go out. He didn’t know.

Payroll didn’t go out that week, so once again I had to scramble to cut checks myself. This went of for literally months. The best part is, they charged me retroactively for this time with the insurance. Insurance my employees weren’t aware they had. We had received no ID cards or selected any plans yet. But of course I had to pay for it.

The ongoing problems with Trinet

Since we worked out those initial issues, I would love to say things have gotten better, but I cannot. Each pay period is an exercise in patients, and comes with it’s own little set of grief. I have asked Trinet on numerous occasions to send me an email letting me know the exact dollar amount they attend on deducting. I set up a bank account specifically for payroll, and I need to transfer the funds into that account. Each time I ask, I’m assured that invoices are sent out ahead of time. The closest this has come unsolicited was last pay period when I got a notice after 3:30pm that funds would be taken out the next day. I got a follow up email from Trinet the next morning that they were unable to get the funds. So despite me asking for several days notice, I couldn’t even get a 24 hour notice.

One of the documents I filled out was to my bank, allowing Trinet to request a funds transfer. I had this hand walked into my banker, as well as got Trinet a copy in case of any issues. My bank has done things like this for me in the past without incident. And there have been no incident on the money transfer issue until this past payment. All of a sudden, after 3 - 4 consecutive successful transfers, Trinet is reporting my bank will not honor the request. They tell me this on Christmas eve and they want me to go to the bank “right away” to wire the fund manually. I explained to them that I was on vacation with my family and that they needed to work this out with the bank directly (that’s why they have a copy of that document), but for some reason it was determined that the easiest way for this to be handled was to have me go down to the bank on Christmas Eve. By the time we went back and forth on this, it was late enough that going to the bank was not an option. So they said I could cut my vacation short and go on the 26th.

Trinet had not real response to my question about why my bank would not honor the document I gave them. They just decided that it was too much trouble I guess. So as of now, employees checks have not been cut.

For the sake of not rambling on forever, I have actually not gone into other issues I have encountered with Trinet. I have not gone into the fact that none of the amounts they deduct make a lot of sense. But they are so screwed up, I know that if I open that can of worms, it will never be solved.

I do have to say that the main rep I deal with there, Angela, is quite nice. I feel genuinely bad when I start bitching about things to her because she clearly doesn’t control any of it. But she doesn’t strike me as overly surprised with all these issues. I get the feeling this must happen a lot.

There have also been issue with their website when trying to make changes for employees, or anything else. They brag that their technology is based around Peoplesoft. As someone who has worked with Peoplesoft, I know that’s not something to brag about. I have never seen a successful Peoplesoft implementation. And I don’t believe Trinet has either. It’s a crap system, and is likely the cause to much of Trinet’s issues.

So if you’re looking for something to make Hr a little more simple, I would not look at Trinet. I spend an obscene amount of time dealing with their issues, and apologizing to employees, which is exactly the opposite of what they are supposed to be doing. You’re better off looking to your bank or other places. I’m not saying that PEO’s or employee leasing is a bad model, I’m just saying that Trinet is not a company I would recommend trusting with your business.

A Sign of the Times - Recruiting Website Cuts 15% of Workforce

Bruce Silver, Founder
Employers Rx LLC
December 12, 2008

Report: CareerBuilder Slashes Jobs

Another ominous headline. This one from the Washington Business Journal. Simply a sign of the times. It feels very much like the early 80's. Do you remember the oil embargo, odd and even days, rationing? Jimmy Carter was out, Ronald Reagan was in. Reagan broke the backs of the unions when he fired the air controllers. He brought in Paul Volker to wring out inflation, partially caused by high oil prices. He did it by ratcheting up interest rates which sent a slowing economy into a tailspin.

The saying then was "if you had a job you were in a recession, if not, it felt like the depression".

Washington Business Journal

by Jeff Clabaugh Staff Reporter

Hundreds of jobs have been cut at a company that is supposed to help people find jobs.

Job posting Web site CareerBuilder has slashed 300 jobs, or about 15 percent of its workforce, according to the Chicago Tribune. The cuts were across the board, but mostly in its small business segment, the Tribune reports, citing chief marketing officer Richard Castellini.

The cuts took place last week, the newspaper reported. (Happy Holidays)

CareerBuilder is majority-owned by Gannett Co. Inc. and Tribune Co., both companies that have struggled with dropping advertising revenue at their publishing businesses. Gannett has responded by cutting hundreds of jobs this year. Tribune this week filed for Chapter 11 bankruptcy protection.

“When we forecast our business for 2009, the growth rates we had anticipated weren’t going to be in line with where we were currently seeing the business,” The Tribune quoated Castellini as saying about the job cuts at CareerBuilder.

Gannett (NYSE: GCI) upped its stake in CareerBuilder earlier this year to 50.8 percent, buying part of Tribune’s interest for $135 million. Tribune still holds a 30.8 percent stake. Publisher McClatchy Co. (NYSE: MNI) and Microsoft (NASDAQ: MSFT) are minority owners.

Administaff - An Employee's Prospective

By Bruce Silver, Founder

Employers Rx LLC

December 6, 2008

Administaff - An Employee's Prospective

I came across an interesting website this morning. It is aptly named JobVent.com .

The purpose of this website appears to be just that.

JobVent is the web site for anyone who has ever said 'I hate my job', or 'I love my job'. JobVent is the web site for people who are about to start a new job, and want to see what other people think of working there.

Topping the list for most hated employer was the Progressive Insurance Company, who scored a resounding minus -7708 from no less than 1181 reviewers. Coming in second place was, of all companies, the worlds leading human resource management and outsourcing organization, Hewitt Associates with a score of minus -4331.  There were 269 Hewitt employees who took the time to let their feelings be known. By doing the math, I calculate that the level of dissatisfaction among Hewitt's employees is much greater than at Progressive.

Guess you might call this a case of the blind leading the blind.

While were on the topic. I was surprised to find a posting from an employee who apparently works for Administaff, a leading professional employer organization based in Kingwood, Texas. I say apparently because all postings on JobVent are anonymous. Here is one insiders view of Administaff, another HR outsourcing company who claims to be an employee management expert.

You be the judge.

Posting on JobVent 12/06/2008 - Administaff

The pay is the most I've ever had and they can afford that because they charge more than any other PEO. The benefits are better than most, but not the best I've ever had. I'd like to have better, but honestly we're struggling in our economy. I rated the job security as 0, but that's because this company prides themselves on never having a layoff....however they will drive you to the point to where you quit or they'll make reasons to let you go. Work/life balance is pretty good. They are really involved in the community. The PTO is decent. Just a couple of people with a few loose screws that try to control when you take your time off and how. They preach how you can grow with the company, but all I've ever seen is friends of friends get promoted and praised. The few supervisors I've seen that weren't friends with anyone, ended up leaving. The location is good for me because I live so close, but that's with anyone who works around the corner from their job. My coworkers know their work, but this is all they know. They have never worked with real software or in a professional environment. This place is pretty similar to putting a bunch of hillbillies in suits and asking them to be pro's. The work environment is the worst. The management claims they don't want to micromanage, when they very well do. They walk around the work area to spy on you and see if you're at your desk. God forbid you have to use the rest room because they'll question where you have been.

It appears to me that Administaff knows how to "Talk the Talk", but do they really "Walk the Walk"?

Common Mistakes of Shopping for PEOs and Employee Leasing on the Web

By Bruce Silver, Founder

Employers Rx LLC 

Third of a three part series.

What is Behind Door Number # 1, 2 or 3? 

When searching the internet for a PEO, it is important for a busy executive to have some idea of what your needs are, and understand the process you are about to undertake, before starting on your virtual journey. We have identified three types of websites that Google and Yahoo link to when searching for employee leasing or professional employer organizations. The first type of website that visitors will encounter are “Provider” sites, next are “Leads” sites, and last but not least, websites of PEO “Brokers” or consultants.

Is your company among the thousands who are looking for affordable health insurance coverage? You probably have read that professional employer organizations can save business owners 20% to 30% on their health insurance premiums because of their large group health plan. While this claim may be slightly exaggerated, the fact is that less then 10% of all professional employer organizations actually have a master group health plan.

Door # 1 – Are You A PEO Provider?

So how do you know if the website you visit belongs to a true employee leasing or professional employer organization? Look for logos of national and local industry associations like NAPEO, ESAC, FAPEO and others. At the same time, logos from payroll or staffing associations may mean the company is not focused on providing comprehensive human resource services or the “Fortune 500” benefits plans you want.

The “About Us” section should identify the management, their background and expertise. Are you looking for a company that offers a true “master” group health plan? Click on the employee or benefits section to see what types of employee benefits programs are available. Don’t be fooled by insurance company logos. Linking to the websites of Aetna, Blue Cross, or any of the national or regional health plans networks, does not indicate that a company has a large group health plan to offer.

 

Many PEO’s claim to save you money because of their “large group purchasing power”. In reality, all you get is their insurance broker shopping the market. You may be better of with your own broker. It is important to read between the lines. Here are a few examples.

 

We offer customized, tailored benefits programs, suited to meet each of our clients’ needs, objectives, demands, and budget. We negotiate contract renewals or we handle receipt of carrier billing and payments.

Be prepared to ask tough questions when you contact the PEO or employee leasing company. Ask about renewals and underwriting. Remember that you will be speaking with someone who represents only that company, and it’s their job to “close the sale”.

Door # 2 – You’re Leading Me On?

Next stop on our virtual tour are the nefarious “Leads” websites. Many of these websites are very attractive, easy to navigate and usually feature information taken directly from websites of established companies (without their knowledge). A typical example is the website SmallBusinessExpo.com. Notice the last sentence at the bottom of the page. 

Are you Gevity? Call to customize this page at no charge. Contact us by phone or email.

Google links to obvious “Leads” websites like BuyerZone.com and Staffmarket.com. It is relatively easy to see that these sites collect your company information and sell it to the highest bidders. Many “Leads” websites provide visitors pages of information on topics relevant to employee leasing such as payroll processing and workers compensation. Often the articles are written offshore or copied from legitimate HR blogs and websites.

 

Websites carrying ads from Google is another clear sign to move on. Why would any employee leasing, PEO or HR company want a competitor advertising on their website. Beware of companies who consistently rank first or second place in Google or Yahoo. In a recent search of Google for employee leasing, first position linked to wiseGeek.com. wiseGeek is owned and operated by Conjecture Corporation of Sparks, Nevada who “creates and manages a portfolio of informational and entertaining consumer web sites”.

Door # 3 – PEO Broker, Who’s Side Are You On? 

Our last stop takes us to websites of “Brokers” or consultants specializing in employee leasing, HR outsourcing and the professional employer industry. You will find there are exceptional professionals across the country, many have years of industry experience, with backgrounds in accounting, banking, and insurance. But, how will you know if you have found a qualified consulting firm or PEO brokerage that will help you find and negotiate for a suitable provider? My best advice comes from President Ronald Reagan, who when dealing with the USSR on nuclear disarmament said; “trust but verify”. 

“Brokers” websites typically offer business owners and executives a choice of leasing firms and PEOs to select from. Some consultants specialize in a particular region of the country, or have experience with certain industries. The demands and requirements of a client in the trucking business is not the same as an IT company. An industry professional will know exactly which PEOs to contact for a proposal. Ask the firm for their years in business, background, industry experience and expertise, and how they are compensated?

Website testimonials may indicate client satisfaction, but it is always a good idea to ask for, and follow-up on references from both their clients, and the companies they work with. LinkedIn members can access groups dedicated to the PEO industry where you can ask industry professionals about a particular broker or consultant’s reputation. Buyer beware is the rule of the day when shopping for payroll, HR outsourcing and professional employer services.

Tell us if we removed some of the bumps on your road to finding the right employee leasing company or professional employer organization for your business.

Sexual Harassment in the Workplace: Don't Take it by Heather Huhman

By Bruce Silver, Founder

Employers Rx LLC

An excellent article written by Heather Huhman in the Carreers and workplace section of theTampa Bay Examiner.com. Her article covers several aspects of the number 1 problem in today's workplace - Sexual Harassment. She provides common examples of actions that are considered sexual harassment. And describes why some behaviors, while crude and repulsive, often are not.

Heather Huhman has been a mentor to individuals seeking entry-level positions, particularly in the public relations field, for many years. She has "been there, done that" when it comes to young careers. Heather may be contacted at entrylevelexaminer@gmail.com. 

As someone who has been sexually harassed in two different workplaces in my past, I feel it is important to outline what is and is not appropriate and provide the best course of action if you feel it is happening to you. 

The U.S. Equal Employment Opportunity Commission (EEOC) defines sexual harassment as “unwelcome sexual advances, requests for sexual favors and other verbal or physical conduct of a sexual nature…when submission to or rejection of this conduct explicitly or implicitly affects an individual's employment, unreasonably interferes with an individual's work performance or creates an intimidating, hostile or offensive work environment.” 

 

Approximately 12,500 charges of sexual harassment were brought to the EEOC in Fiscal Year 2007, 16 percent of which were filed by males. Yes, males can be sexually harassed, too. These numbers are likely well beneath actual occurrences because, like most charges of a sexual nature, many incidences go unreported.

 

Examples of Sexual Harassment

 

1. Quid pro quo. “The boss says, ‘sleep with me and you'll get a raise’ or ‘if you don't sleep with me you'll get fired,’” said Scott I. Barer, a labor and employment law attorney at the Law Offices of Scott I. Barer.

 

2. Hostile work environment. “For example, a workplace that regularly plays a radio program featuring frequent vulgar references to sexual activities, sex acts and body parts can be a hostile environment,” said Andrew Milne, a senior counsel with Garson Claxton LLC. “In April of this year, a woman successfully sued her employer based on her daily exposure to such a radio show, despite her repeated requests that the program not be played in her workplace. The court concluded that the offensive comments were unwanted, sexual in nature and offensive to women generally, and the daily broadcast of the show in her workplace made the offensive conduct pervasive enough to be sexual harassment.”

 

There are many other examples of a hostile work environment. For example, says Roberta Chinsky Matuson, president of Human Resource Solutions, telling unwelcomed jokes of a sexual nature. “If the other person finds the joke offensive, and it makes the work environment uncomfortable, then this would be considered creating a hostile work environment.”

 

Examples of Behavior Often Mistaken for Sexual Harassment

 

1. Consensual dating, joking and touching. “Only unwelcome conduct can be sexual harassment,” said Matuson. “However, it should be noted that often times things start out one way and end up another. For example, you may decide it is okay if you date your boss and he or she touches you at work. If the relationship should end, you may no longer feel it is okay for this behavior to continue. If you ask the person to stop, and they continue to do so, then you are being sexually harassed. Of course it is more difficult to prove this if you have already had a consensual relationship. That is why it is advisable to resist the temptation of dating your boss.”

 

2. “You look nice today.” “The boss says to his assistant, ‘You look nice today. That's a great outfit.’ There, he has not acted unreasonably by complimenting his assistant. But, the boss should not take it to an extreme and say something like, ‘That's a great outfit. It really makes your legs look sexy.’ Also, the boss should not compliment the employee so often so as to make her feel uncomfortable. But, an occasional compliment would be permitted, and maybe even welcomed by his assistant,” said Barer. “If the boss makes even a single, innocuous compliment, and the employee asks him to stop, he should do as requested.”

 

3. Open criticism. “For example, if a male supervisor yells at a female subordinate in front of other people in the office for poor performance, and the female employee gets embarrassed, that is not harassment,” said Beth Hinsdale, a partner with Fox Rothschild in the labor and employment practice group.

 

4. Crude language. “Swearing in the workplace is not harassment,” said Anne Caldwell, president of Outsourcing Solutions.

 

5. Isolated or infrequent vulgar acts. “Isolated comments and infrequent touching, even if unwanted, may not be unlawful sexual harassment,” said Milne. “In one recent case, the court decided sixteen instances of offensive conduct in four years was not severe or pervasive. It did not matter that the offensive conduct included several instances of unwanted touching and three unwanted attempts to kiss the victim. Should such conduct be reported to an employer? Absolutely, and the employer should take steps to stop it. But, hostile environment lawsuits are not easy, and not all offensive sexual conduct is going to result in successful court case for the victim.”

 

“Another example is someone asking you out, and you saying no. If it happens once, it is not harassment,” said Erica Pinsky, CHRP, B.A., M.Sc., CertConRes, principal consultant at Erica Pinsky Inc. “Or, if someone compliments you once, it is not sexual harassment. This is because, again, we usually are looking for a pattern of behavior that has consequences for the person at work.”

 

6. Asked to work late…in exchange for dinner. “Suppose a male supervisor asked a female employee to work late, and he told her that he would buy her dinner for her trouble. That is not sexual harassment,” said B. Allison Borkenheim, an attorney at Procopio, Cory, Hargreaves & Savitch LLP. “He has not requested sexual favors and conditioned the terms of her employment or employment opportunities on sexual favors. He simply offered to feed her as a thank you for her hard work.”

 

Action Steps

 

Don’t allow a supervisor or coworker sexually harass you – period. As I previously stated, I have been the victim of sexual harassment in two different workplaces. In one instance, I had to go to step six listed below in order to resolve the problem. In the other situation, I actually had to leave the organization because not enough was being done. Sexual harassment is typically about power. Don’t let these individuals have power over you.

 

1. Confront the offender. “Interns and entry-level employees, like all employees, should first try to resolve the matter directly with the offender,” saidLily M. Garcia, Esq., SPHR, a human resource professional and employment discrimination attorney.

 

2. Identify your allies. What if confrontation makes you extremely uncomfortable or you fear your job is at risk if you confront the offender?

 

“This is certainly a valid concern, and where HR or a sympathetic manager can help. Many members of management are sensitive to sexual harassment issues, and will take any such complaints very seriously. The employee should actively seek out a senior level member of the company – even if not in his or her department – and air the issues,” said Josh King, vice president of business development and general counsel for Avvo, Inc.

 

3. Put it in writing. “Keep a log of situations where you have felt harassed. Be sure to note time and dates along with your response to this behavior,” said Matuson.

 

4. Consult the organization’s sexual harassment policy. “Most policies provide for multiple avenues of recourse, including your immediate supervisor, senior members of management, the human resources department, and anonymous complaint hotlines,” said Garcia.

 

Milne adds, “If there is no written sexual harassment policy, then the company’s human resources department is the group most likely to understand the legal requirements in this area. An employee usually should involve his or her immediate supervisor in resolving sexual harassment, unless the supervisor is the source of the harassment, an active contributor to the ‘hostile environment’ or has clearly expressed or implied hostility toward sexual harassment claims.”

 

5. File a complaint. “Employees should use the complaint procedure offered by their employer's policies. If they do not, the employer will often have a defense to harassment complaints,” said Hinsdale.

 

6. Look for consultation outside the organization. “If an employer does not have an effective sexual harassment policy, or doesn’t actually follow their written policy or investigate allegations of sexual harassment, employees can seek guidance from the local offices of the EEOC, state agencies that handle employment discrimination matters and private attorneys,” said Milne.

Disappointed by your PEO or Employee Leasing Company?

By Bruce Silver, Founder
Employers Rx LLC

Have you been disappointed by an employee leasing company or professional employer organization? Was your PEO hired to help you with your employee administration, benefits and compliance tasks. Let's face it. Most PEO's claim to be comprehensive HR organizations who help small business save time and money.

Sometimes this isn't always the case.

Blogger Jonathan Kamens on his blog entitled Something Better To Do describes his experience as an employee of Advent Software, a small software company specializing in financial management systems.

Administaff disappoints

A little less than a year ago, my employer, Tamale Software (since acquired by Advent Software, in what I would happily classify as the fourth successful acquisition of the five in which I’ve been involved), decided to outsource its human resources function to the Professional Employer Organization (PEO) Administaff.

Administaff uses a “co-employment” model, wherein the employees of Administaff’s clients become employees of Administaff as well, and Administaff handles health insurance, payroll, recruiting, performance management, etc. Administaff clients don’t necessarily use all of Administaff’s services; it’s a menu from which they choose what they want. The biggest reason for a company to use Administaff is probably to reduce the cost of health insurance. Administaff can bargain with the insurance industry for lower rates than a small or medium-sized business can on its own, since they have a far larger employee pool.

Tamale has always had awesome benefits, including great health insurance with 100% of the premiums paid by the company. But the company and its employees got a little older and more mature (read “got married and/or started having babies;” I must confess that I’m a major contributor to this!), and at the same time the cost of health insurance skyrocketed across the board. It’s therefore not surprising that Tamale went looking for a way to reduce its costs, and perhaps switching to Administaff was a necessary evil.

Nonetheless, from the point of view of the employees, it was not a positive change. We went from having all of our HR needs seen to directly by an extremely competent, friendly Tamale employee in our office, to dealing over the phone or internet with nameless, faceless Administaff employees cut out of the “barely adequate customer service representative” mold.

Of course, the Administaff sales people sang the praises of their service team and spoke glowingly about how painless the transition would be. I’m sure it will come as no surprise that the reality did not live up to the hype. There were problems from the start, and the problems continued throughout our time with Administaff. A few examples:

1. When we filled out the HMO enrolment paperwork, we were given the option of specifying primary care physicians (PCPs) on the forms and told that they would be entered into the system with our initial enrolment. Many of us took the time to look up PCP ID numbers and include them on the form. Administaff did not bother to enter anyone’s PCPs into the system.
2. When our HR manager contacted Administaff about the fact that they had completely ignored everyone’s PCP designations, rather than immediately admitting the error and agreeing to rectify it, they told her that we would all have to call the insurance company directly to take care of it. Needless to say, she pushed back until they agreed to solve the problem.
3. With their commuter pass program, it was impossible to know from one month to the next which paycheck the cost of the pass would be deducted from. Some months it was the first paycheck, some months it was the second, and some months they completely forgot and had to deduct from both paychecks in the following month.
4. They charge a $2 fee per month for the commuter pass program. No employer I have ever worked for in my entire life has charged a fee for participating in a commuter program.
5. One month they simply failed to process the commuter passes on time, and we didn’t get them until after the beginning of the next month. We received a letter notifying us that our passes were going to be late and instructing us to buy “day passes” for the intervening days (what about people who live out in yachupitzville where nobody sells T passes?) and then to send in a form to be reimbursed for them. Wow, what a great time-saver!
6. It sometimes took Administaff as long as a week and a half to deposit 401k money withheld from paychecks into people’s 401k accounts. Yes, that means that Administaff was making money off of the float in the interim.
7. When we terminated our relationship with Administaff after the acquisition, I applied to have my Health-care Flexible Spending Account (FSA) continue under COBRA, because there was a lot of money remaining in the account and I needed more time to spend it. Two weeks after sending the premium check to Administaff to continue the FSA coverage, the check still hadn’t been cashed and the FSA provider still had my account marked closed and therefore was refusing to accept new claims.

Everybody makes mistakes, and occasional mistakes can and should be forgiven. But when there’s a pattern of mistakes, as in the odd-numbered items above, that a sign not only of a lack of quality, but of not caring about quality. And as for the even-numbered items above, they represent much more than simple mistakes; they represent conscious decisions that are detrimental to the customer.

I did a little research about Administaff and discovered that in addition to the “little” problems (not so little, really!) described above, they’ve had their share of Big Problems as well:

1. In October 2007, an Administaff laptop containing unecrypted personal data on 159,000 current and former employees managed by Administaff was stolen. Adam Breindel has a great takeon just what this incident says about Administaff (and it isn’t good).
2. Back in 2003, Administaff attempted to intimidate people out of saying negative things on their Yahoo! Finance message board by suing Yahoo! and demanding that they reveal the identities of the people making the comments. More information at The Center for Internet and Society at Stanford.

I understand that small and medium-sized businesses face incredible pressure to lower costs any way they can, and for some of them, going with a PEO like Administaff might be inevitable. But I urge any business considering such a move to evaluate carefully the impact on employee morale and the time employees will waste dealing problems like the ones described above, and I urge such businesses to evaluate not merely cost, but also quality of service when choosing which PEO to utilize.

Common Mistakes Made Shopping for PEOs and Employee Leasing on the Web

By Bruce Silver, Founder

Employers Rx LLC

Second of a three part series

Never Judge a Book by it's Cover

Search Google or Yahoo using the keywords employee leasing or professional employer organization and you will find hundreds of websites offering all variations of employee leasing, HR Outsourcing and PEO services. Many are legitimate websites for companies that actually provide employee leasing and HR services. These sites belong to "Providers", companies that are Professional Employer Organizations like ADP and Oasis Outsourcing.

Another type of website offers “quoting” services that will allow you to receive quotes from multiple companies. Very often these websites are designed to do nothing more than capture leads. These "Lead Generation" sites don’t offer professional services or expertise, but are simply taking your contact information and selling it. Often your company profile is stored in a database, and sold to 10 or more sales organizations that are foolish or desperate enough to pay $25 - $50 for your “lead”.

Still other websites offer employee leasing and PEO consulting services from professionals who will analyze your needs, introduce you to suitable partners, and assist you with the proposal and implementation process. As in any industry, it is sometimes difficult to tell who truly has the expertise and integrity worthy of your business.

The most important website for information about the industry is www.napeo.org, the National Association of Professional Employer Organizations. There you can learn about the co-employer concept, the history of the industry, statistics, and a list of member employee leasing companies, PEOs, as well as PEO brokers and consultants. The primary function of NAPEO is to promote the industry to business owners and government officials. Members pay NAPEO annual association dues based on their size to support these efforts.

Unfortunately, Google and Yahoo often list the NAPEO website on the second page. Usually people will click on the first few "paid" inclusions found at the top and side of the search page. These ads are sold to the highest bidder and it may indicate an organization that is more interested in putting their money into marketing, instead of delivering affordable quality service.

Look for part three:

What is Behind Door Number 1, 2, or 3?