SIX CONSIDERATIONS WHEN EVALUATING YOUR COMPENSATION STRATEGY

Employees are vital to your organization and a significant investment for most businesses, typically averaging 70 percent of operating expenses. This essential business asset deserves a well-crafted strategy. While compensation is only one factor to consider for recruiting and retaining talent, it is critical to your overall HR strategy. Whether initiating or updating your compensation strategy and philosophy, the following best practices may help guide your process and decisions.

• HR & BENEFITS
• PAYROLL

TRINET: THE GREAT RE-EVALUATION & THE NEW WORLD OF WORK

Few now dispute that the American workforce underwent systemic changes due to the COVID pandemic. Remote work is more prominent than ever, employees feel more empowered in their roles, and businesses face new hurdles in supply chain disruptions and public health mandates. The pandemic has ushered in a new era in the workforce that employers who hope to remain successful must adjust to. As the president and CEO of one of the industry’s largest PEOs, TriNet’s Burton M. Goldfield has seen small and medium-size businesses (SMBs) across the country grapple with these changes, and he’s also confronting this new reality himself as he leads TriNet’s more than 3,000-person internal workforce.

• PEO PROFILES

ALPHASTAFF

Cristina Bouchard leads Sunrise, Florida-based AlphaStaff, with a deep passion for serving clients and a relentless commitment to exceeding expectations. A self-described hands-on executive, she wants to know everything happening in her company: strengths, weaknesses, pain points, and areas for growth. She responds to every single client testimonial herself and lets all clients know they have access to her leadership and her management teams at any time. Cristina is in her second stint leading the company, but now as a significant equity owner, she’s in a position to drive change, innovate, and build for the future. She has big plans about where to take her company, and she’s not afraid to defy the status quo to get there.

• PEO PROFILES

BRAND TOUCHPOINTS ARE CHANGING

The pandemic forced a lot of changes. Gone are the days of opening night for blockbuster movies at the theater, frequent in-person meetings, and late-night, large-party dining. Nearly every restaurant now has an app and offers curbside. Zoom fatigue is real, and people are looking for alternatives such as Volley. Movie releases can now be seen at home on apps such as Disney+ and HBO. Safe to say our industry has also seen its fair share of shake-ups and changes.

• SALES & MARKETING

HOW DEI & B IS THE KEY TO WINNING THE WAR ON TALENT

Uber. Netflix. Airbnb. They all took business-as-usual ideas—taxis, video rentals, hotel stays—and turned them on their heads. They were all disruptions we welcomed because they fixed friction in our lives, unless of course you were a taxi driver, Blockbuster, or hotel chain. Disrupt or die became a critical shift for all industries, and it became crystal clear that digitally enabled, diverse experiences were the future.

• HR & BENEFITS

PAT & NAPEO: PERFECT TOGETHER

December 5, 2021, marked 10 years at the helm for NAPEO President & CEO Pat Cleary. The industry has seen tremendous growth and gained much more recognition over those 10 years. One of Pat’s greatest strengths as a leader has been in securing NAPEO’s seat at the table within the larger community here in Washington, D.C. Through outreach and partnerships with organizations such as the U.S. Chamber and the American Benefits Council, and by managing positive relationships with lawmakers, the media, regulatory agencies, and other associations, Pat has helped educate the larger universe about the value PEOs bring to U.S. businesses.

Q3 PEO PULSE SURVEY RESULTS

NAPEO’s PEO Pulse Survey from the third quarter of 2021 shows that PEOs entered the fourth quarter of 2021 with confidence, as all revenue, profit, and employee metrics improved.

SHIFTING FEDERAL REGULATION IN THE WORKPLACE

As employers begin transitioning away from pandemic mode and toward management mode, they also are trying to navigate the changes to the legal landscape governing the workplace. The government has made this all the more difficult with its ever-shifting rules designed to both address the pandemic and reflect the changes in philosophy in transitioning from the Trump to the Biden administrations. Below are just a few of the recent changes that PEOs should be aware of to better service their clients.

• LEGAL & LEGISLATIVE
• RISK

10 WAYS MARKETING & SALES CAN TEAM UP TO BUILD A ROBUST SALES PIPELINE

Traditionally, many PEOs have relied on their sales teams to generate leads and build sales pipelines to support company revenue growth objectives. Many organizations are finding that this model isn’t sustainable in this challenging post-COVID business environment. The sales team’s prospecting efforts are yielding fewer and fewer meetings with new prospects. This results in fewer proposals being presented, fewer deals closed, and ultimately, anemic (or even flat) revenue growth.

• SALES & MARKETING

FEDERAL APPEALS COURT PUTS FINAL NAIL IN COFFIN FOR BUSINESS-FRIENDLY JOINT EMPLOYER RULE

Laying to rest any doubt that employers would continue to enjoy a business-friendly interpretation of the standard to determine joint employment status, a federal appeals court recently put the final nail in the coffin of the Trump-era attempt to shield businesses from being considered joint employers in a wide spectrum of circumstances. This move clears the way for the current administration to cement into place a broad standard that captures a wide swath of business arrangements into the “joint employer” category.

• LEGAL & LEGISLATIVE

News & Statistics

HEALTHCARE BENEFITS • JOB STRESS • HAPPY ANNIVERSARY! • CENTRAL STAFF SERVICES • VACCINE MANDATE • WHAT POTENTIAL EMPLOYEES WANT

RISK MANAGEMENT & INSURANCE ISSUES

At the end of 2020, management consulting firm McKinsey & Company surveyed 899 C-suite executives about the impacts of the pandemic on business operations. One of their conclusions was that the pandemic had accelerated the adoption of digital processes by three to seven years, with B2B firms like those in the PEO space on the higher end of the spectrum.

• RISK

SELLING A PEO

Investment bankers sell companies by running a “sales process.” This process includes becoming knowledgeable about a company’s business, finances, and operations followed by analyzing that information, preparing marketing information, evaluating and contacting the buyer market, reviewing and negotiating offers, conducting due diligence, and negotiating the transaction documents. And then the transaction closes.

• FINANCE & OPERATIONS

TEAMWORK HR

A passion for growing businesses, helping people, and serving the community are the bedrock principles of Redding, California-based Teamwork HR. Heidi Corrigan leads this 26-person team with an energy and enthusiasm that keeps her team motivated to excel and serve clients.

• PEO PROFILES

UNUSUAL LABOR MARKET FLATTENS PEO INDEX AGAINST GDP

The PEO Employment Index comprises 149 PEOs, 2,000 PEO worksites, and 160,000 worksite employees. It measures the expansion or contraction of PEO worksites through the bi-weekly census data that is collected through the 401(k)-contribution process. Unlike many economic reports that consist of survey data and consequently can be somewhat subjective, the PEO Index is real-time data of actual hiring and terminations at the worksite level. 

AVOID POTENTIAL LANDMINES WHEN MAKING CLAIMS IN PEO PROMOTIONAL CAMPAIGNS

Getting word-of-mouth referrals can set your clients (and company) up for success when you accurately describe your goods and services. According to NAPEO, the number of worksite employees employed in the PEO industry grew at an impressive compounded annual rate of 7.6 percent; however, the PEO industry’s clients still represent only 15.3 percent of all employers with 10 to 99 employees, which means that there is an untapped market of more than 84 percent.

BEING A CHAMPION FOR THE INDUSTRY

Bruce Cornutt is the president & CEO of Florence, Alabama-based Lyons HR. He was elected to the position of chair of NAPEO’s Board of Directors on September 28 during NAPEO’s annual member meeting in San Antonio, Texas. He had previously served as vice chair and is the recipient of the 2017 Michaeline A. Doyle Award, the industry’s highest honor. He recently spoke with PEO Insider to share a little about his professional background, where he sees the industry headed, and how he hopes to guide the association.

COMMON CONCERNS FOR BUSINESSES RETURNING TO WORK

2020 has changed the workplace environment entirely—and the transition isn’t over. The pandemic has created hurdles that proved the need for ongoing agility at the workplace and in company leadership. These new challenges include returning to work, gauging vaccination concerns, developing hiring plans, and navigating the unique hybrid workplace dynamic. While it won’t be an easy feat, HR leaders must consider responding to the ebb and flow with care while managing employee concerns. Below are a few key takeaways based on our work with several employers that successfully navigated through the unprecedented challenges of the last two years.

CONDUCTING EFFECTIVE VIRTUAL MEETINGS

Just when we thought things were back to normal, we are reminded that change is constant. The PEO sales world is constantly changing and we have to continually look for ways to innovate and that includes conducting virtual meetings.

HIGHLIGHTS OF NAPEO’S 2021 FINANCIAL RATIO & OPERATING STATISTICS SURVEY

The revenue growth rate for all respondents in NAPEO’s 2021 Financial Ratio & Operating Statistics Survey (FROS) was 1.9 percent for FY2020, down from 8.3 percent in FY2019. The operating income per worksite employee was $199 for FY2020, also down slightly from $242 in FY2019. Despite these results, client retention remained strong and gross profit per worksite employee and productivity improved.

MANDATORY VACCINATIONS

Many employers are on the fence about whether to reopen offices, and if so, whether to mandate vaccinations. We now know that employers can mandate that employees be vaccinated to return to offices.

NAPEO GIVES BACK TO SOLDIERS’ ANGELS

The generosity of the PEO industry was on full display at NAPEO’s 2021 Annual Conference & Marketplace in San Antonio last month through NAPEO Gives Back. NAPEO Gives Back’s mission is to leverage the “Power of Many” and leave a local charity in our conference city better than when we came. This year’s benefactor of NAPEO Gives Back was a San Antonio-based veterans’ support organization, Soldiers’ Angels. Soldiers’ Angels provides aid, comfort, and resources to service members, veterans, and their families through the Veteran’s Administration Hospital in San Antonio.

THE EVOLVING EMPLOYEE HANDBOOK

As COVID vaccines become more widely available and individuals reach full vaccination status, guidance and regulations continue to change from a broad patchwork of authorities, including federal, state, and local governments, the U.S. Centers for Disease Control and Prevention (CDC), and the Occupational Safety and Health Administration (OSHA). With these changes, more employees are gradually returning to work in person. Therefore, now is an ideal time for employers to review their employee handbooks and update policies to evolve with workplace changes prompted by COVID and the post-vaccine world.

10 THINGS I USED TO BELIEVE ABOUT SELLING PEO

I got a call a few weeks ago from a salesperson I first met back in 1999. He’s a really nice guy, a little too salesy for me, and he always pursued higher workers’ compensation risk, low-margin business. But still a nice guy. Our conversation went from the usual “How have you been since we last spoke 15 years ago” to the agenda of how could this salesperson get a PEO to write a prospect with a high workers’ comp modifier and save the prospect money. It was a fairly short conversation about the subject, the details too long for this article. However, when we hung up the phone, I realized that this guy was stuck in 1987.