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

Social Security Announces 5.8 Percent Benefit Increase for 2009

Monthly Social Security and Supplemental Security Income benefits for more than 55 million Americans will increase 5.8 percent in 2009, the Social Security Administration announced today. The 5.8 percent increase is the largest since 1982.

Social Security and Supplemental Security Income benefits increase automatically each year based on the rise in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), from the third quarter of the prior year to the corresponding period of the current year. This year's increase in the CPI-W was 5.8 percent.

The 5.8 percent Cost-of-Living Adjustment (COLA) will begin with benefits that over 50 million Social Security beneficiaries receive in January 2009. Increased payments to more than 7 million Supplemental Security Income beneficiaries will begin on December 31.

Some other changes that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $106,800 from $102,000. Of the estimated 164 million workers who will pay Social Security taxes in 2009, about 11 million will pay higher taxes as a result of the increase in the taxable maximum.

http://www.ssa.gov/pressoffice/pr/2009cola-pr.htm

Offsite HR versus Professional Employer Organization

Published by Bruce Silver
Employers Rx LLC
September 29, 2008

Many business owners have asked me to explain the difference between an Off-Site Human Resource Organization (HRO) and a Professional Employer Organization (PEO), also referred to as employee leasing companies. While most of my clients could care less what the solution is called, so long as we resolve their problem, there are clear differences between these two classifications.

When considering whether you should select an HR outsourcing provider or contracting with a Professional Employer Organization, it is extremely important for business owners and managers to identify the weak links with their employee management and human resource administration. Ask yourself, how can we make our company more competitive? What areas of employee administration can be delivered more efficiently? Are your human resource policies and procedures up-to-date. Are you protecting yourself from frivolous lawsuits by adhering to the myriad of federal, state, and local employment rules and regulations? Are you attracting the best employees by providing a competitive benefits program at affordable rates?

There are four key areas to examine when comparing which employee management solution is best suited for your small or mid-size company. The first area looks into the vendor relationship by examining the roles and the responsibilities of each party under each contract. The second area explores the different services you can expect to receive from each solution provider. Next, we will delve into the various service models, and the different ways that services are delivered, their flexibility, and ways it "touches" your management and employees. Finally, we examine market availability, suitability, and a range of costs or savings you could expect.

We will focus in on each of these four areas in detail with a series of posts to follow. The series will offer our insights on an HR Outsourcing industry that often uses confusing and contradictory definitions and terms to describe similar services. Return often to learn about industry leaders, what sets them apart, and why. We will identify the types and levels of professional services that are best suited for your company's size and budget.

We hope you will join us.

More information is available at Employers-Rx.com

Employers Rx Founder Bruce Silver is Featured PEO Expert for HR World Webinar

Bruce Silver, founder of employee management consulting firm Employers Rx LLC will be the featured guest speaker for a webinar presented by HR World.com on September 25th, 2008. Entitled “7 Ways to Effectively Run a Growing Company in a Slowing Economy” the webinar will focus on ways that small and midsize companies can survive the current economic downturn and prepare for the coming recovery. This informative webinar will look into specific areas where a Professional Employer Organization or PEO can help business owners and entrepreneurs to reduce costs and maximize their human capital investments.

Visitors joining the webinar will learn the top 7 ways to "take the headache" out of effectively running a growing company using a complete Professional Employer Organization (PEO) solution, including:

• Payroll Processing
• Health & Welfare Benefits Administration
• Workers compensation coverage
• Mitigating & Reducing Compliance Risk
• Outsourcing HR Administration - The Pros & Cons
• Improvements you can make to stabilize & control costs
• Plus much more...

Joining Bruce on the webinar will be HR World Editor and Senior Editorial Director Owen Linderholm and Doug Leonard, Vice President of Marketing for Gevity HR, one of the nation’s leading HR Outsourcing companies who is sponsoring this event.

HR World is a leading resource for HR professionals. The site provides in-depth content that HR professionals at small, medium and large companies need to make key decisions. The site provides original content covering news, events and information relevant to HR professionals. HR World is a trusted source for human resource managers and buyers.

Join industry experts to see how a PEO can enable you and your company to focus on saving costs while boosting employee performance and satisfaction. Employers Rx is proud to be a part of this informative and timely subject. The webinar will enlighten HR managers and decision makers to the many ways that partnering with a Professional Employer Organization can help their small and midsize company weather the storm and prepare for brighter days. Attendees can register at the Employers Rx website by clicking on the link at http://employers-rx.com/solutions.php.

Aon Puts a Favorable Spin on Health Insurance Increases

Aon Corporation, the world's 2nd largest insurance broker released their latest survey on projected "health care" costs for 2009. An increase of only 10.6%. So what would you expect the headline to be.

HEALTH INSURANCE RATES GOING UP AGAIN.

Well not exactly. How about ....

HEALTH CARE COSTS TREND DOWN

Don't be fooled by the industry "Spin". Small business owners and mid-size companies should be prepared to experience another round of double digit rate increases again this year. Just like your experience last year, and the year before that, and the year before that.

Aon Consulting's U.S. Health & Benefits practice director, John Zern, said of the survey results: "While the medical trend rate is still more than twice the consumer price index, it is encouraging to see that health care cost rate increases are continuing to slow down. This is a step in the right direction for companies nationwide that continue to feel significant health care price pressures."

Bill Sharon, senior VP of Aon Consulting and director of the study attributes the decrease in the medical trend rate to more employers and employees taking advantage of wellness, health promotion and consumer driven programs.

"Unlike some other healthcare trend surveys, Aon Consulting's survey reports the expected future increase in employer-provided health plan claims cost before any plan changes, based on the opinions of health plan actuaries. We provide this trend data to help employers evaluate the competitiveness of health insurance premium renewals. For employers with self-funded health plans, this trend data helps them (and their actuaries) develop future claim estimates for budgeting purposes."

This is "double speak" for let us see where we can cut your benefits this year. Once again, the insurance company will pay less of the claim (if any), employees will pay more, and the employer still gets socked for an increase in premiums, only not as much as last year. Sound familiar?

If your a business owner, employer or manager and you want to escape the annual treadmill or health insurance rate increases .... than you should consider the services of a Professional Employer Organization

PEO-quote.com offers a free guide that helps entrepreneurs and busy executives find out about the many solutions that employee leasing, HR outsourcing, and professional employer organizations can provide the small and midsize company. Take the time to learn what some of the industry leaders can do for you. You owe it to yourself, and to your employees.

Too busy, then call on the services of a consultant that specializes in employee leasing, and the HRO and PEO industry. Business owners can have their questions about employee leasing and professional organizations answered by experienced professionals at Employers Rx LLC.

Employee Leasing Scams

Employee Leasing Scams - Buyer Beware.

This article highlights what can go wrong when signing up your small or midsize business with an employee leasing company or professional employer organization without doing your homework. The damage done (and potential liability) by not performing the proper due diligence can have a devastating effect

After almost 6 years, prosecutors are finally bringing to justice (after appeals) 3 more individuals whose audacity and greed ruined the lives of business owners and their employees in Florida, New Jersey, New York and the Midwest.

The Florida Times-Union
By Paul Pinkham

Judge sentences business men to prison

Three business owners who cheated millions of U.S. workers out of insurance benefits were sentenced to a total of 55 years in prison by a Jacksonville judge Thursday in what one investigator called Florida's biggest insurance fraud case. U.S. District Judge Virginia Hernandez Covington also ordered the men to forfeit $75 million in assets to the government to partially repay their victims. She said she was "repulsed" by the crimes and hopes the sentences send a message to the business community that fraud won't be tolerated.

Greed got the better of you," Covington told the defendants, all in their 50s.

In February, after a five-week trial, jurors convicted Donald Edward Touchet, Richard E. Standridge and Robert J. Jennings of mail fraud, wire fraud and money laundering. Prosecutors said the men used sham insurance companies to defraud tens of thousands of small business owners into paying premiums for nonexistent workers comp coverage. Five of the victimized businesses were in Jacksonville. As a result, millions of workers were left without insurance, and some suffered catastrophic financial setbacks, said Assistant U.S. Attorney Mark Devereaux. They included a Missouri man who lost both legs in a construction accident and was only able to get one replaced because the insurance, which he thought he had, never paid for the first one. Another victim, a Lake Butler trucker, suffered brain damage from a job accident but got no salary or hospitalization benefits. He lost his home and his marriage, according to trial testimony.

Covington sentenced Touchet, 54, of El Cajon, Calif., to 22 years in prison and ordered him to forfeit $35 million and property in San Diego County, Calif., to the government. Standridge, 59, a Tempe, Ariz., physician, was sentenced to 18 years in prison and ordered to forfeit $19 million, a $400,000 bank account and four vehicles. Jennings, 59, of Danville, Ill., was sentenced to 15 years and ordered to forfeit $21 million, property in Danville and a motor vehicle. He is dying of cancer, his lawyer said.

Fourteen people have been convicted in the insurance scam, which FBI Special Agent Doug Mathews called the biggest ever in Florida. A 15th defendant is at large in England, and another died while under investigation. Devereaux said prosecutors are proceeding with forfeiture against his New Jersey employee leasing company. The national FBI investigation spun out of the Jacksonville prosecution of Thomas King, president of the Jacksonville employee leasing firm Miralink Group, which collapsed in 2002. King is serving a 14-year sentence. Touchet owned a California employee leasing firm, Jennings ran an administrative services company and Standridge operated several medical corporations. They provided the administrative functions of the sham insurance that King and others purchased, Devereaux said.

In court Thursday, the three men claimed to have been victims themselves, but Covington didn't buy it. "I don't think this had to do with being naive," she said. "I think this had to do with being greedy." Although all three said they sympathized with the victims, Devereaux said their actions and testimony at trial show differently. "You don't get any more serious of a white-collar crime," he told Covington. "This is almost like an Enron where people's life savings are gone, and they [the defendants] just don't care. ... The amount of loss here is absolutely tremendous."

The defendants plan to appeal.