The Professional Employer

  Matthew Bandyk of U.S. News & World Report offers this advice to small buisnesses preparing for a recession:

Spend more time talking to your customers and less time listening to the talking heads on television. Don’t be afraid of the future—take charge of it by asking your customers what’s going on. This economy is not going to shut down. If we’re in a recession, it doesn’t matter. People are still going to buy stuff. It’s our job to give our customers the maximum opportunities to pay from us. That might mean we’ve got to work a little bit harder. We’ve got to manage our businesses a little more efficiently.

One way a small business can become more efficient is to outsource payroll and employment compliance inssues to a Professional Employment Organization (PEO).  Payroll and HR functions do not generate profit.  They are simply time consuming liabilities.  By outsourcing these functions small businesses avoid potential budget-busting payroll & compliance errors.  Plus relieving your business of these responsibilities frees you to concentrate on increasing sales and improving customer satisfaction.

  Termination is always painful, even when the cause is a slumping economy. An employee’s first reaction to the news of a lay off is fear of loss, and fear is always followed by protective anger. Some employees act out their anger with violent action and others with legal action.

Of course, you can try to ease the pain by handing out generous severance packages, outplacement benefits and counseling. Give out written information about the support the company will give and let employees know you are providing cushions, even though you aren’t legally required to. But don’t expect these provisions to satisfy all distraught ex-employees.

The most secure provision for a business is to never be forced to terminate a worker. This is possible through some Professional Employment Organizations (PEO) by a special agreement known as ”worker leasing“.  In a worker leasing agreement all workers are employed by the PEO. The PEO leases the workers back to the business, which continues to make all personnel and operating decisions. If the economy slumps or a worker fails to perform to the business’ satisfaction, the worker is released back to the PEO which will reassign the worker elsewhere.

Through worker leasing no one is laid off or fired therefore workers are less likely to experience the feeling of loss and the subsequent anger. And in the event a worker objects and is upset by reassignment process the PEO will provide counceling and settle any disputes without disrupting the business. The bottom line is Worker Leasing = No Terminations.

  YAHOO! SMALL BUSINESS has a good article for entrepreneurs who are considering bringing on employees. In it they offer tips such as:

Recruit “Superstars” Only
With great people in each position, your odds of success go way up. You don’t have a cushion of extra time or leftover resources so it’s essential that every employee be an extremely capable “superstar” at what he or she does and be well coordinated with the rest of the team activities.

Make a Recruitment List
Always keep your feelers out, and make a target list of the twelve most valuable superstars you would like to recruit and continuously work those relationships. We actually found some of our best employees through other small business contacts. That’s why it’s a good idea to regularly attend networking events, and ask for referrals from customers, business associates, competitors, and current staff members.

Review Your Plan with Candidates
Superstar people seek more than monetary compensation, such as being part of the team and taking pride in their achievements. That’s why it’s a good idea to walk through your business plan with candidates, but be sure to appeal to their goals, rather than just asking them to meet yours.

While these are wise tips YAHOO! SMALL BUSINESS has omitted a crucial tip. They start their article by stating “the most important” move an entrepreneur can make is to “realize your strengths and weaknesses.”  Coincidentally employment and payroll management is a major weakness for most entrepreneurs.  After identifying your weakness they then advise entrepreneurs to “find high-quality people to fill in the gaps”.  That’s true, but they fail to mention that a Professional Employer (an expert in employment strategies) is one of the best options for filling those gaps.  By outsourcing HR responsibilities to a PEO an entrepreneur can save a lot of time and money and also avoid numerous legal pot-holes.

  Managing the payroll, benefits & HR issues of the employees that work for you is a chore. Putting extra time & worry into the claims of former employees is a burden. Professional Employment Organizations (PEO) can make sure you don’t have to worry about them anymore.  When you sign on with a PEO you and your staff will no longer be overwhelmed by unemployment and compensation paperwork. This service will save you money and create extra time for your business to focus on more profitable activities.

PEOs are considered the employer of record, therefore state unemployment taxes must be calculated and paid by the PEO. So you and your staff are alleviated from this tedious task. PEOs are HR experts, which means you can be sure unemployment taxes will always be correct and prepared on time. This will increase your productivity and eliminate costly errors.