Tag Archives: compliance

Article on the cost of payroll-only services

This is a pretty concise overview on the cost of payroll services for small businesses. 

http://www.choicevendor.com/blog/2010/03/how-much-does-payroll-cost-we-compare-4-top-providers/comment-page-1/#comment-1129

Of course, if you bundle in additional HR services like software, benefits, compliance and workers comp, there are greater savings to be seen.  That is why for small businesses, we recommend PEO and other total HR outsourcing solutions to gain economies of scale so the payroll is basically free.

Does HR Outsourcing save Money?

A better question would be, is time = money?
 

If you recognize that time is money, then a company that engages a PEO or ASO or other HR outsourcing solutions will definitely save money.  In particular, there are areas where a company employs staff to handle time consuming hr functions.  This time can be freed up with a PEO or ASO, allowing more time on strategic functions or revenue generating areas of the business.
 

A PEO or ASO will save a company time by writing employment policies and producing employee handbooks, researching medical insurance plans, implementing a loss control program, providing HR and compliance training for managers and supervisors, benefits administration, vacation and sick leave tracking, responding to unemployment claims, records administration, and many other hr functions.
 

In addition, you will possibly see hard dollar savings by consolidating your current hr functions to one provider.  For instance, instead of separate payroll provider, 401(k) administrator, workers’ compensation and unemployment claims management, Section 125 administration, insurance plans, COBRA administration, etc., and paying fees for these services as a small business to multiple vendors, with a PEO or ASO, you are paying one vendor.  Thus, eliminating margins to various vendors and saving money. 

Free HR Services for Manufacturing companies

I just completed a conference call with a manufacturing company with more than 400 employees.  The savings from the PEO on the workers comp and benefits pay for the hr services…payroll, benefits admin, hr consulting, compliance. 

I am amazed sometimes at why more companies, especially those with high mod’s (modifier rating) do not explore this opportunity for their companies. 

My calculation, and this is hard dollar savings, is more than $300,000 annually.  That is more than $700 per employee per year.  Every year.  That does not include the savings of having a separate 401k and other benefits.