NAPEO
April 2020
THIS MONTH'S FOCUS: Small Business & Workforce Update
IMPLICATIONS FOR PEOS: LABOR MARKETS, STATE ENVIRONMENTS, INDUSTRY STRENGTH
The state of small business is always of vital importance to PEOs, for whom small businesses represent a primary market. Small businesses can be assessed across a variety of dimensions, including the labor market(s) within which they operate (including both availability of workers and wage levels of employees), their states’ policy and tax environments, and the current strength or weakness of various industries.
BY LAURIE BASSI AND DAN MCMURRER
April 2020CONTENTS
FEATURED
ISSUES WITH MAJOR BUSINESS IMPACT: MEDICARE FOR ALL PROPOSALS & RISING HEALTHCARE COSTS
The PEO industry is often challenges, but, ultimately, business is good. New PEOs are forming and existing PEOs are growing. Times are good, but what could derail current trends? What is the Black Swan Event that could cause a disruption to the PEO industry? The one that stands out to us is “Medicare for all,” or some variation of it. We are not predicting an implementation of Medicare for all, but healthcare reform promises to be a hot topic this election.
BY RON CORNWELL AND JD GUSTAFSON
April 2020ON THE FRONT LINES WITH SMALL BUSINESS: WHAT I’VE LEARNED FROM MY CLIENTS
After hearing the agreeable phrase, “I know, right?” 20 times, I became instantly annoyed. How about your teenage daughter shopping for (high-waisted) mom jeans? Just weird. And the high-fat keto diet everyone’s raving about? It’s turning everything I’ve known about nutrition upside down. Trends have their way of creeping under our skin—right before they take us shopping at the local mall (or online these days, to highlight yet another trend.)
BY VIC TANON
April 2020TECHNOLOGY & SMALL BUSINESS: ON THE TECH HIGHWAY, FINES ARE DOUBLED IN THE SLOW LANE
The state of small business is front and center in this season of political and social debate, as the presidential election is just months away. This is important not only in political terms, but it is squarely the target market for PEOs. According to Deloitte, small- and mid-size businesses (SMBs) with fewer than 500 employees number 29 million—99 percent of all firms. JP Morgan Chase finds that 88 percent of this number has 20 or fewer employees.
BY JOHN SLAVIC
April 2020THE EVOLUTION OF HEALTHCARE BENEFITS IN THE U.S.: OPTIONS FOR TODAY’S SMALL BUSINESS WORKFORCE
Why is the United States one of the only countries to have a healthcare system based on employer-sponsored health insurance plans? In 1942, there was a severe labor shortage with thousands of workers pressed into military service. Economists predicted that businesses would steadily raise salaries to compete for workers and inflation would spiral out of control as our economy came out of the Great Depression. President Roosevelt signed Executive Order 9250 to help prevent this, establishing the Office of Economic Stabilization, which froze wages. Business responded by using benefits to compete, offering more comprehensive healthcare benefits to attract workers.
BY TOM JACOBS, J.D., MBA AND MATTHEW WEAVER, J.D.
April 2020WHAT’S TRENDING? 2020 OFFERS BIG OPPORTUNITIES FOR PEOS
Every year brings the opportunity for PEOs to evaluate their impact and value. By understanding broader workforce trends, PEOs can adapt accordingly to ensure they evolve with the changing workforce. The tight labor market has provided the workforce with low unemployment, thus intensifying the competition for talent and putting an added focus on offerings. Increasing regulatory demands have forced companies to adapt to drive their businesses forward, which could be detrimental to a business if appropriate action isn’t taken.
BY BRIAN MICHAUD
April 2020TRACKS
One of the most important value propositions that a PEO offers to a small to mid-size business is technology. On a standalone basis, technology is often financially out of reach of clients in a PEO’s target market. PEOs take the small business technology experience to an entirely different level.
BY ANDREW LUBASH
April 2020Breaking News • Member News • Coronavirus • NAPEO Gives Back
Please visit our COVID-19 Resource Center (www.napeo.org/covid19) for the latest information and analysis from NAPEO as well as important information and guidance from agencies such as the Centers for Disease Control and Prevention (CDC) and the Occupational Safety and Health Administration (OSHA), as well as resources from many of our partners.
BY
April 2020HOW DO YOU CREATE A POSITIVE WORKPLACE CULTURE WITHIN YOUR PEO & CLIENT COMPANIES?
At Erigo, we try to practice what we preach and implement the advice we would give to similarly situated clients who want to build a strong workplace culture. First, we start with the goal of creating a culture that will allow the type of employee who will help the organization achieve its goals and thrive. We admit at the outset, to ourselves and to employees, that it may not be the right fit for everyone and some employees may find our workplace to be unfulfilling.
BY
April 2020As I write this, fears of the coronavirus are sweeping the nation and the world. I’m reminded of the old adage that truth is the first casualty of war. This war is against a virus, but it seems like fear has overtaken reason in many quarters. One co-worker said to me, “I’m not listening to anyone who isn’t a doctor.” Good advice.
BY PAT CLEARY
April 2020IMPACT OF STATE-RUN AUTO-IRA PROGRAMS STILL DIFFICULT TO DETERMINE
It’s been nearly three years since Oregon became the first state to launch an IRA program that requires private-sector employers to automatically enroll employees in the program unless they already offer retirement plans. By the end of 2019, six states (California, Connecticut, Illinois, New Jersey, Maryland, and Oregon) had some form of a so-called mandatory auto-IRA program on their books, and three of those programs (OregonSaves, Illinois Secure Choice, and CalSavers) had reached the implementation stage.
BY COURTNEY A. ZINTER, ESQ.
April 2020IMPROVING THE BUDGETING PROCESS
Budgeting. Some love it and some loathe it. One thing we can all agree on, though, is that budgeting and continually benchmarking your budget performance against your goals is smart for business. Not only will it allow you to project revenue, expenses and earnings before interest, taxes, depreciation, and amortization (EBITDA), but it will also guide you to make business decisions every step of the way.
BY TANYA YAKHNIS, CPA
April 2020THE 5 BIGGEST MISTAKES SALESPEOPLE MAKE
This year marks my 35th year in the PEO space and this article is my 80th penned for PEO Insider. I always try to strike a positive tone, although this article will discuss the mistakes salespeople make in selling PEO. It’s okay to disagree with these mistakes, because we could certainly add many more. The most important thing, however, is that we learn from these mistakes and don’t make them again.
BY CLAY M. KELLEY, PHR
April 2020THE INS & OUTS OF CLIENT-SPONSORED & MASTER BENEFIT PLANS
More and more often, benefits are becoming a larger portion of the value proposition of well-run PEOs. PEOs can offer benefits through client-sponsored plans (CSPs), through master medical plans (master), or potentially both.
BY JOHN HARMAN, CFP,® CLU
April 2020