When an organization’s processes, infrastructure, and service delivery work together, things really buzz. Take it from bees. They perform a series of actions, within an organizational framework, in order to achieve their goal: The survival of the hive. The byproduct, of course, is sweet, sweet honey.
The same applies to PEOs: Repeatable, efficient processes supported by a robust infrastructure deliver valuable products and services to clients, sustaining the PEO and creating profit. This simple formula has variations as plentiful as there are PEOs. This feature provides some insights into this symbiotic nature of the PEO operation:
We hope this insight will help you make your PEO operation buzz.
Background checks have become a matter of necessity for employers wanting to thoroughly vet job applicants. PEOs are often a part of this process. The goal in obtaining background checks is to evaluate the candidates’ qualifications, check the accuracy of their job applications and resumes, gauge their honesty during the application process, and ensure a safer workplace. However, in the last 10 years, numerous background check and employee screening laws have been passed at the state and local levels, which has made compliance increasingly more difficult. As one might imagine, the number of background check lawsuits has steadily increased.
One of the many benefits PEOs provide to their client employers is employee benefit plans—401(k) retirement plans, group health plans, and Section 125 cafeteria plans. These various plans are subject to a number of requirements under the Internal Revenue Code (code) and the Employee Retirement Income Security Act (ERISA). Compliance with these many requirements is necessary to stay legal and to be able to provide benefits in a tax-advantaged manner. One of the basic requirements is that such plans be memorialized in written plan documents.
In April 2018, NAPEO released “PEO Market Research: Comprehensive Report.1” The research engaged four key audiences: PEO owners, PEO current clients, PEO “almost clients,” and PEO potential clients. Some of the key questions addressed by the survey were: • Why do PEOs have the clients they have? • Why aren’t more businesses using PEOs? • What is the best way to engage potential clients? ... The report concluded with a series of strategic recommendations intended to assist the PEO industry at large and individual PEOs in attempts to increase market share. The first recommendation was to “focus future communications around the well-being of the business’ employees.”
No doubt you have heard a lot over the last few months about NAPEO’s exhaustive market research project and the resulting report, “PEO Market Research: Comprehensive Report.1” More than 500 businesses were surveyed and participated in live focus groups. When you read between the lines of the research results, there some very telling takeaways. I have summarized the following key findings in my own words....The purpose of this article is to address these key findings from the research and provide you with 10 recommendations to improve sales results. I will cover the first five in this article and the next five in a follow-up article.
I love baseball. Growing up in Ohio during the 1970s, I enjoyed watching the Big Red Machine become one of the most successful and consistent teams of all time, built around a creative manager and some of the best all-time players the game has ever seen. Baseball is a haven for anyone who enjoys statistics, probabilities, and an overall abundance of information that is constantly being analyzed and evaluated to garner some competitive advantage. Perhaps that’s how I became intrigued with the PEO industry.
I thought it only appropriate to end my year as NAPEO chair by once again adopting a sailing theme. During this past year, I have had many opportunities to observe the inner workings of NAPEO and its staff and I am pleased to report back to our membership that under the leadership of our Commodore Pat Cleary and his most able crew, we have traveled well beyond the safe harbor of status quo into the open sea of change—all for the betterment of our members and industry.
If it’s summer, it must be NAPEO Leadership Council Forum (LCF) meeting season. We had a bunch of good and well-attended meetings this summer. I attended the Midwest LCF in Chicago on July 11, held in conjunction with our CFO Seminar, and of course traveled to the Holy Land—New Jersey (my home state)—for the NJ LCF on July 17. Wouldn’t miss that one. We also held the Colorado LCF, complete with a Coors brewery tour, on July 25. There was also a stout meeting agenda, but all the Facebook photos from the attendees were of the brewery tour. Go figure.
In 2015, NAPEO released the first comprehensive economic analysis that sought to determine the accurate footprint of the PEO industry. It wasn’t easy. Traditional sources of business data, such as the U.S. Bureau of Labor Statistics (BLS) and Hoovers, do not accurately define PEOs, often omitting some PEOs while including non-PEOs in the category. Economists Laurie Bassi and Dan McMurrer of McBassi & Company estimated a range for PEO industry size that was based on conservative assumptions on the low end and less conservative assumptions on the high end. This year, Bassi and McMurrer took on the task of updating their estimates...
In May, I spoke with NAPEO members at the Department of Labor headquarters in Washington, D.C., during the association’s 2018 PEO Capitol Summit. My message was that the Department of Labor (DOL) shares the purpose of empowering the American workforce. PEOs help Americans avoid harm and fraud, as well as distraction and frustration with compliance. Your efforts aid our nation’s workforce and small businesses to focus on their work—what they actually want to do.
For eight months, NAPEO has been lobbying Congress and the Department of the Treasury (Treasury) to clarify that pass-through entities that use PEOs remain eligible for a 20 percent tax deduction contained in the new tax law. In letters to Treasury and to the chair of the House Ways and Means Committee, and in meetings on the Hill, the message was clear: The PEO industry needed clarification from Treasury that makes clear that pass-through entities that use PEOs would remain eligible for this tax deduction.
If you’ve been working in the industry for a while, you know efforts to pass legislation based on the NAPEO model act in Missouri have been ongoing for approximately 15 years. During my tenure at the association, we’ve introduced bills in the last four legislative sessions. Our bill (finally) passed and was signed into law in 2018. So, why this year? What did it take?
Q. Have there been any recent updates to the Persuader Rule? A. The U.S. Department of Labor (DOL) recently announced that it has rescinded the 2016 Persuader Rule, which had gone into effect in April of that year. The Persuader Rule was determined to have impinged on attorney-client privilege by requiring confidential information to be a part of required disclosures under the Labor-Management Reporting and Disclosure Act (LMRDA). Under that version of the rule, employers, outside counsel, and consultants needed to electronically disclose to the DOL arrangements to persuade employees directly or indirectly about organizing or collective bargaining. In late 2016, the implementation of the rule was blocked by a federal court, and in late spring 2017,...
Pensacola, Florida-based LandrumHR believes strongly that it has a responsibility to play an active role in serving its community. As a business, LandrumHR has chosen to support many local non-profit organizations, but one in particular focuses on cultivating, equipping, and training future business leaders: Junior Achievement of Northwest Florida.
The president of Integrity Outsource, LLC, Joe Beers, often finds himself playing the role of PEO industry ambassador. His Phoenix-based PEO operates around three core principles: Serve, innovate, and grow. While Beers applies these principles to his company, he also adheres to them when it comes to the PEO industry in general.
Last week [July 16 to 20] the administration launched what it termed “the next step” in its economic agenda: a sweeping, administration-wide effort to equip the American workforce to succeed in the modern economy. To propel this initiative forward, it is seeking advice and cooperation from leaders in business and education. Our message at the U.S. Chamber of Commerce is simple: Count us in. We look forward to continuing our work with the administration on this issue of critical importance to the entire business community.