NAPEO
The modern world is driven by convenience and customization, SMBs included. Digitization, remote-friendly roles, and a generational shift in the workforce all impact today’s employee experience. When this experience is lacking, it can be costly to companies in more ways than one.
General ledger reconciliation is a key control to help maintain timely and accurate financial statements in any business. If you speak to accounting or finance professionals in the PEO industry, they will agree that general ledger balance sheet reconciliations are the most telling and critical tools in analyzing a PEO’s fiscal position. Failure to reconcile balance sheet accounts timely and accurately can lead to material losses to the PEO. Let’s explore the 5 W’s of PEO ledger reconciliations.
A PEO is only as strong as its client relationships. From ownership to worksite employees, we need to be engaged at every level of our clients’ teams. Of course, strong connections between owners and executives build trust that is needed to develop successful relationships.
Quality content is the key to a successful marketing strategy. Content published online will extend a brand, position your business as subject matter experts, attract visitors to a website, and convert those visitors to qualified sales leads. But the role content plays in the sales process doesn’t end there. The same content that was created to support marketing’s objectives can also be used (or repurposed) to support the sales process and even help accelerate deals through the funnel. Salespeople engage with prospects at various stages of the buyer’s journey – Awareness, Consideration, and Decision-making.
As the PEO industry continues to grow across the country, one of the larger segments of untapped potential is the larger side of the SMB equation. I mean clients with 100 to 500 employees. As a PEO with several clients over 100 employees, there are certain things we have learned that make this marketplace desirable. Here are a few pointers to achieve success in this rewarding niche.
Hiring sales talent feels like diving into the shallow end. The pool of job-seeking sales business development executives is sparse. We have the new-to-PEO applicant that may demand high wages and bring minimal professional or sales experience. We have the tenured “retread” that applies to all of our postings, demands high wages, uses our offers against one another, and seems to be with a new PEO every 18 months.
In my last article, we covered the role of the salesperson in the underwriting process and the important documents we need to gain from prospective clients to effectively underwrite them for a proposal. In this article, we are going to talk about something very exciting – your proposal request form. Don’t go too crazy on me, because this is a very important document to effectively build your business case.
While the pandemic may have reinforced the benefits of marketing, savvy business and marketing leaders have always recognized the importance of marketing to establishing a company’s image, supporting sales strategy, delivering key insights and developing new prospects. The past several years have proven the ability of a strong, well-funded marketing department to accomplish four important objectives.
Over the summer, NAPEO commissioned Povaddo to facilitate focus groups among business owners to determine what prevents and facilitates the using of PEOs. Three in-person focus groups were conducted in New York City in July, followed by eight additional online focus groups. Participants were divided into four categories: Large businesses with hourly employees; large businesses with salaried employees; small businesses with hourly employees; and small businesses with salaried employees. Large businesses were defined as having 36-150 full time employees, while small businesses were defined as having 11-35 full time employees. All focus group participants were either business owners or primary decision makers of hiring professional services.
Random acts of marketing are when a business is stuck in an endless cycle of short-term marketing experiments: an email blast is tried this month, a webinar next month, and social media ads the month after that. While random acts of kindness usually result in good feelings for both the performer and the recipient, the same can’t be said for random acts of marketing. Instead of good feelings, business leaders who are stuck on a “hamster wheel” of random acts of marketing find themselves disappointed and frustrated.
It’s time to come to terms with the biggest hurdle in marketing right now: people don’t trust you anymore. Don’t take too much offense — people don’t seem to really trust anyone these days, but the fact remains that they don’t trust you either. According to the Edelman 2022 “Trust Barometer” survey, 63% of people believe businesses are “purposely trying to mislead people by saying things they know are false or gross exaggerations.” So in an environment like this, how do you reach customers through marketing and advertising? In the past, the answer was simple: prove it. Providing data or showing statistics about the impact of having a PEO was enough to lend credibility to claims of benefiting small businesses. However, that moment is over. People are increasingly skeptical of the marquee numbers we’ve been using to tout PEOs for the past several years.
All these challenges can be met by PEOs. It may take some re-engineering of the model, but the PEO service could be central in the reordered economy and business environment in the years ahead. It is a time to be especially vigilant to customer wants and expectations, for many businesses will find it difficult to be profitable. This is where the PEO value proposition will be challenged most.
In the early days of the PEO industry, a PEO salesperson only had to submit a census of employee and payroll data, workers’ compensation codes and health plan participation to get a proposal/pricing. There was no underwriting or scrutiny of the prospect’s information, no credit check, no comparisons. Consequently, due to a failure to manage risk, some PEOs went out of business or lost their workers’ compensation insurance or health insurance plans. The PEO industry’s reputation took a hit in some markets.
Looking at this month’s PEO Index, it appears at first glance that gross domestic product (GDP) is taking off and the PEO Index is lagging. However, the unique employment environment of today belies first impressions.
The prospecting your team does today often doesn’t result in closed business for several weeks or months. How do you keep a prospect engaged for an extended sales cycle? How do you keep your qualified leads from going into a “black hole?” Longer sales cycles and shortened attention spans are often deal-breakers, but lead nurturing gives you an advantage when it comes to converting prospects and building trust.
I mentioned in a previous writing that NAPEO’s Board of Directors adopted the largest budget in terms of legislative affairs and marketing/communications in the history of the organization for 2022. With that budget, the association made clear that establishing effective, influential relationships on Capitol Hill and spreading the news about the value of PEO services are our primary objectives this year.
The PEO sale is a complex sale. To be successful at selling PEO, salespeople should have a real-world understanding of human resources practices, from hiring to retiring and all the drama in between. They should be knowledgeable about: • Employment regulations; • Workers’ compensation and regulations; • Risk management; • Employee benefits, administration, and regulations; • Payroll, payroll forms, payroll taxes, and regulations; • Time and attendance systems; and • HR technology.
Back in the late fall of 2008, when we started Premier Employer Services, Inc. here in Denver, Colorado, my partner at the time and I went back and forth trying to find the perfect name, with little luck. We finally settled on the name, but I must be honest with you—I never liked the name; it was too bland and way too long. We had nothing else, so we opened the doors and away we went. The name was never so bad that it rose to the top of the “important things to address” list. Every once in a while, someone would mention it and I would remark that I wanted to change it, but it was never an emergency. I continued to struggle with coming up with anything better.
Many regional PEOs are strategically modeled to be local providers, offering high-touch service to clients they can visit in person and really get to know. Depending on location, sometimes that might include a couple of surrounding states, but most clients have traditionally been in the same home state as the PEO.
What is a PEO’s value proposition to its clients? One may be tempted to answer this question by listing a PEO’s service and product offering. However, the service and product offering are not the value proposition of a PEO. The value proposition of a PEO is the material impact the PEO has on its clients. The PEO’s product and service suite serve as the framework to drive the value proposition. The execution of the product and service suite through the PEO’s staff is the delivery method of said value.
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.
An entrepreneur selling his or her business represents years of hard work, sacrifice, and financial and emotional investment, which can be a stressful and daunting task for any business owner. For a large proportion of owners, this is the first time they or their teams have been through an exit process. Anxiety and fear are common emotions when contemplating an exit, but most of this unease can be eliminated through educating yourself about the exit process. Even more important is preparing your company to both maximize the value at exit and minimize the chances of a false start or failed transaction.
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.
