Each week, I speak with business owners from all over the country about Professional Employer Organizations (PEOs). Here are just a few recent conversations and how a PEO solution was able to impact several companies.
California Towing Company
This third-generation family business with 14 employees has been the dominant towing service in their community for over 30 years. They’re the common, but unfortunate example of having years of a great workers’ compensation claims history – only to have 3 large claims in the last 18 months. Those claims caused a large increase to their insurance rates. And if you run in business in California, you understand that increases are not small- and have a major impact on profitability.
The claims totaled over $250k, and would increase their annual premiums by $42k. The owners were unfamiliar with PEO services and were searching for options through their agent to minimize this increase. Their agent had limited knowledge of PEOs, but had heard they could be a viable option for her client and found our services online. After a nice conversation with the agent about her client’s history and frankly just bad luck of recent injuries, I confirmed the right PEO could be a great option for this group.
We started by reaching out to a PEO we’ve worked with that specializes in towing and transportation. The PEO reviewed their history and cause of the claims. Based on this information, along with their impressive, consistent efforts in safety training, the PEO company was able to eliminate $30k of this increase in workers’ comp premium through their master policy. Even better, the proposal included payroll and HR services that they had been outsourcing to a payroll company for a cost of $15k annually.
We were actually able to decrease their combined costs for workers’ comp and payroll, flipping what could have been a large increase in business costs - to a net savings of $3k annually.
Florida Assisted Living Home
The new owner of this existing business called us looking for help. He’s an entrepreneur, busy guy running several companies. He had used PEOs through the years for several of his businesses- helping him streamline services, reduce paperwork, and providing him with more time to work on making his investments more profitable.
The assisted living home he purchased was small, with only 3 employees. They had not had workers’ compensation insurance coverage before. Although they weren’t required to carry work comp, he wasn’t comfortable with the potential liability of not having coverage.
He originally reached out to a PEO he’s utilized in the past, but they required a minimum of 10 employees to help. We reached out to one of our PEO companies that specialize in the nursing home and the assisted living industry. What makes this PEO unique to others, is that they like new start-ups – where they have a fresh foundation to work with the owner on his goals and objectives.
The PEO provided a time and attendance system directly to their payroll platform, allowing the owner to review the payroll in minutes from anywhere at any time in the world and submit for processing. For the first time, his employees have direct deposit for their wages- and the owner has a simple, no touch process. Plus, they’re currently working together on creating a company manual that outlines job descriptions, earning of paid of time off and holiday pay.
Illinois Trucking Company
Also unfamiliar with PEO services, the owner of this company was referred to us by one of our current clients – and a friend of his in the trucking industry. He started the business 5 years ago with a few employees and has quickly increased business to 12 drivers. His main problem was accessing good employee benefits that have become a necessity in not only hiring new drivers, but keeping the ones he has.
We discussed his needs and budget for benefits with a PEO to implement a great package for his drivers, while adding some tax savings advantages for his company. The PEO provides annual MVR reviews, D.O.T. qualification files on employees, and a number of great safety services they knew needed to be implemented – but just hadn’t been able to find the time to make happen.
As our conversation about PEO services evolved, he became more excited about the relief of outsourcing payroll and HR issues, because his wife has been the one performing those tasks. Plus, the PEO was able to decrease their workers’ compensation costs helping to reduce their new annual employee benefit plans by 40%!
Every company has a different story and area(s) of their business they would like to improve on. Give us a call and let’s see how your business could benefit with the right PEO service.