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?

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

By Bruce Silver, Founder

Employers Rx LLC

First of a three part series.

Web Shopping for Employee Leasing and PEOs can be Tricky.

Where can a Busy Executive Turn to for Help?

Your a small business owner who is trying reduce costs because of the slowing economy. Your insurance broker just delivered your annual renewal rates. Workers compensation coverage increased another 20% because of a large claim you experieced 2 years ago. Your small group health insurance went up another 25%, and the only recommendation your broker has  ...... reduce the benefits again, and ask your employees to pay even more for less coverage.

Faced with this dilemma, many successful business owners will seek out solutions offered by an employee leasing company or PEO professional employer organization. Unfortunately, many executives have little experience shopping for employee leasing and HR outsourcing services. Some will ask an associate or their accountant for a recommendation, and others may let their fingers do the walking through the "Yellow Pages". 

Today, more and more busy executives are turning to the Internet for help. 

Look for the part two:

Never Judge a Book by it's Cover

7 Signs That Your Company May Be Ready for HR Outsourcing

A Note From the Editor
By Bruce Silver

HR World continues to be a valuable source of "Real World" information for busy executives, business owners and HR managers. John Edwards points out the signals that successful enterprises, large and small, should pay attention to.

We know that many readers of this blog operate small and mid-sized companies who do not have HR departments. That doesn't mean that your HR functions aren't being performed. Unfortunately, many firms lack employees well "versed" in employment rules and regulations.

John's article takes you on an enlightening tour from the boardroom to the mailroom . When will you know it's time to consider outsourcing your organization's HR administration and compliance functions? See how HR practices can effect the success of your business.

By John Edwards

There comes a time in the life of most successful businesses when a decision has to be made as to whether certain HR tasks are best handled in-house or by an HRO (human resources outsourcer). Making the right call at the right time isn't easy, but certain telltale signs can indicate when it's time to "pull the trigger" and call for help. This is what you should look for:

Spiraling Costs: Rapidly rising costs in payroll, benefit management and other key areas continue to be the primary driver for HR outsourcing. While cost reduction isn't the only reason for using an HRO — efficiency, quality and speed are other motivating factors — it's certainly a major consideration.

Missed Deadlines: If a growing number of employees are complaining that critical documents, ranging from paychecks to W-2 forms, are arriving late, it's a sign that something is broken. There's a good chance that the delays are being caused by an HR department that's stretched beyond its capabilities. An HRO can step in and help get critical work back on schedule without the need to hire new HR employees or upgrade facilities.

System Overloads: If HR tasks are beginning to overwhelm internal IT resources, it’s time to either invest in additional technology or turn at least some of the crippling workload over to a third party. HROs rely on their own IT systems, enabling in-house systems to focus on non-HR-related tasks. A cost/benefit analysis may show that it would be cheaper for your business to shift data-intensive and high-priority HR resources, such as employee databases and Web self-service operation, to an HRO rather than invest in new on-site technology.

Increasing Mistakes: No HR department is foolproof, but snowballing goofs are another sure sign that people and systems are being stretched beyond their limits. Assigning mistake-prone work to an HRO can lower the pressure on in-house staffers. The best part is that an HRO can be held accountable for supplying a basic level of accuracy in whatever work it handles. This is especially important in situations such as payroll where legal compliance is an issue.

Poor Quality Work: Mediocre or worse output over an extended period of time is a sign that an HR department is being overworked or — more ominously — simply isn't competent. While a business may wish to experiment with new managers and work procedures, it may be simpler to just outsource everything to a third party, either permanently or while a new HR department is being assembled.

Disgruntled HR Workers: Employee griping is as common as office football pools. But when the complaining begins drowning out normal discourse, it's time to start considering remedial action. An HRO can step in during busy seasons to take on the extra time-consuming tasks that drive up HR workloads and staff discontentment.

Competitors' Moves: Are many of your business' prime competitors shifting to HROs? If so, they might have spotted a need that you may not have yet detected or have been unwilling to acknowledge. Ask around and find out what benefits your rivals are gaining from outsourcing HR work. You may discover that these same issues apply to your organization.

Employers Rx Founder Bruce Silver is Featured on the South Florida Business Report

West Palm Beach, FL, October 17, 2008 -PR.com --- Bruce Silver, founder of employee management consulting firm Employers Rx LLC will be featured on this week’s edition of “The South Florida Business Report” airing on WPEC-CBS Channel 12. Bruce is interviewed by veteran television producer David Weir, who delves into the reasons for his founding of Employers Rx LLC, and the variety of areas that South Florida business owners and entrepreneurs can reduce costs in these challenging times.

The interview touches on the most troubling areas for companies operating in South Florida, and across the country. How can I provide affordable health care for my employees? How can I reduce my administrative costs? How do I stay ahead of HR compliance and employment regulations? Answers to these and other challenging problems are discussed. Bruce explains what a Professional Employer Organization (PEO) is, and the concept referred to as the co-employer relationship.

The South Florida Business Report is devoted exclusively to the local business community, delivering all the local business news, from the lemonade stand to the boardroom. The show, now in its 23rd year, has produced over 20,000 local business stories and nearly 2,500 interviews with local business people. Guests on the show have included Senator Phil Gramm, Senator Connie Mack, and Steve Forbes.

Join David Weir and PEO industry expert Bruce Silver to learn how a Professional Employer Organization can help small and midsize companies weather the storm and prepare for brighter days. The show is broadcast to over 775,000 homes on WPEC-CBS12. Viewers from Ft. Lauderdale to the Space Coast and west to counties surrounding Lake Okeechobee can watch the telecast on Saturday October 18th at 12:00 noon. The show will be rebroadcast Sunday morning at 5:30am on October 19th.

Additional information is available at http://employers-Rx.com, or contact Bruce Silver by email at bruce@employers-Rx.com or by telephone at (877) PEO-CURE.

Information about David Weir and the South Florida Business Report is available at: http://www.southfloridabusinessreport.com