Streamline operations to stabilize and grow.

Get lean, invest in technology and focus on your core business. The pandemic is devastating certain industries. For those who are spared the worst, the pandemic is still creating unbelievable business pressures. Now is the time to evaluate all aspects of how we work.

When it comes to delivering human resources, payroll and employee benefits, it pays to reevaluate just how we are delivering these benefits to our people. For the small and midsize employer, automating as many transactions as possible will help reduce time spent on administrative tasks and improve accuracy.

One of the greatest threats is the ever-increasing cost of healthcare. The Affordable Care Act focused more on access than actual affordability – at least from the employer standpoint. One of the key tenants of the ACA was to eliminate underwriting loads and discounts in the small end of the market. That means all small businesses pay the same rate, regardless of the underlying health of the group. This approach has pros and cons, but if your company has, on average, better demographics and health risks than the ACA pool at large, you can arbitrage this differential to your benefit by opting out of the ACA pool, and into a co-employment arrangement.

In a co-employment relationship, the small business partners with a PEO (Professional Employment Organization). This allows a small business to pool risks with a large pool of employees, usually to their advantage. There are definite advantages to the PEO – automation, pooling of large numbers, scale and purchasing power. However, it is critical to find the right PEO partner.

PEO’s are often sold aggressively by the representatives paid to do so. It pays to take time, shop alternatives and talk to current clients – not just the ones they offer as references. With our PEO evaluation tool, we can help you determine if it’s the right fit to help you grow.

Information is provided by Relational Advisors and written by Mike Rankin, a non-affiliate of Cetera Advisor Networks LLC.