Is Your PEO Keeping its Promise?

The promise of joining a PEO (Professional Employer Organization) was to help your business in two main areas:  lower costs, primarily the cost of health benefits and workers’ compensation, and lower risk, primarily in the area of HR regulatory compliance.  Sure, they promised various other benefits, but let’s be honest, you very likely joined the PEO for one of these two reasons. And, while you likely had some concerns about loss of control, you bit the bullet because you wanted lower costs or lower risk.

So, is your PEO keeping its promise?  More and more companies are answering, “No”.  For starters, in the past several years, many organizations are finding that the cost of being in a PEO has risen faster than the marketplace.  The ACA (Affordable Care Act) has made the benefits of joining a PEO for lower healthcare costs not nearly as attractive. And, as workers’ comp rates have stabilized, that, too, has reduced potential cost savings.  In addition, as PEOs have increased the use of technology, it is hard to determine if your HR compliance risk is reduced since it is becoming increasingly difficult to speak to a truly qualified HR Professional when you have a critical employee issue. Finally, the Administrative Fee that is charged by the PEO seems to be constantly increasing, especially as your company grows.

But, what choice do you have?  Even if you can save money on benefits and workers’ comp by leaving the PEO, how is payroll going to get processed? And, how is HR compliance going to be handled without having to hire additional staff or pay triple-digit rates to an employment attorney?  So, is there a realistic, practical alternative to a PEO relationship? For more and more companies, the answer is a resounding, “Yes”.

Administrative Services Outsourcing (ASO) is a great PEO alternative.  With this service, you get virtually all of the benefits of working with a PEO, without the loss of control, limited choices of features and costs of health benefits plans you can offer to your employees or lack of access to qualified HR Professionals for your employee issues.  

ASO service typically includes:

  • HR Services, both proactive and reactive.  Proactive HR is in compliance with all of the various regulations, updated employee handbook and forms, and advice on best practices to help protect your business and attract and retain the best employees.  Reactive HR is having a truly qualified HR Professional in your corner for those employee issues which inevitably come up in business.
  • Benefits Administration, working closely with your broker to remove from your plate the administrative tasks of offering employee benefits, while you make the decisions about what plans you want to offer.
  • Leave Management, ensuring you are fully in compliance with all of the various local, state and federal regulations when your employees take a leave, need an ADA accommodation or have a workers’ comp claim.
  • Payroll and Tax Filing, providing full, end-to-end payroll and tax filing on a state of the art payroll/HRIS system.
  • Qualified HR Professionals to work directly with your employees, your management team, and your executive team.
  • Recruiting Services are usually available as well.

Sounds a lot like the services a PEO offers, doesn’t it?  That’s because ASO service is essentially PEO services without the co-employment.  And, with ASO you will be able to:

  • Offer customized  benefits to your employees, with more choices of plans and options, to meet your budget
  • Offer  benefits tailored to your company and  employees, with more choices of plans and options, to meet your budget
  • Have true HR professionals on your side who understand your business and value your time
  • Likely lower the fees you pay each month for HR and payroll administration
  • Regain control over your HR policies and practices

For more information about the EW ASO service and how it is a great alternative to your current PEO relationship, click here or give us a call at 1-925-249-9740

Are you In Compliance with the California Fair Pay Act?

California Fair Pay Act

California’s Fair Pay Act continues to be under-recognized as an important law by employers, creating the risk of EECO complaints or lawsuits. The fundamental target of the law is unfair or discriminatory pay practices, with an expansion this year that bars asking candidates for salary history. Employers need to perform a compensation review that includes a comparison of salaries by gender and “substantially similar” positions, and resolution of identified disparities. And employment applications must be modified to remove commonly asked salary history questions.

What you don’t know about Wage and Hour Compliance

According to the Department of Labor (the DOL), more than 70% of all employers violate the Fair Labor Standards Act (The FLSA). Wage and hour lawsuits can end with significant payments for penalties and back wages.

Some employers are blissfully unaware of the regulations they could be in violation of. Some common violations include misclassification of exempt employees; off the clockwork; unpaid meal and rest break self-imposed penalties; improper calculation of the regular rate of pay; improper deductions from salaried employees; insufficient information on paycheck stubs; timekeeping violations; and failure to pay overtime correctly.

If you find yourself in violation of any of these you could incur substantial penalties or, a worst case scenario of a class action lawsuit. YPP can help guide you through a wage and hour compliance review, to identify and correct risks before you get a claim, and ensure ongoing compliance.

Now is the time to build your HR strategy before the new year. Contact us now!

Understanding the change in your workforce demographic


“Demographic Iceberg Right Ahead!”generational difference

Understanding your workforce demographics will help you build a successful culture and improve retention.

A business can gain benefits from each of the generational “groups” in the workforce by understanding and managing to their values and strengths. Creating a culture where you recognize the contributions of each group and create a work environment where everyone thrives, and you have a cohesive team.

Small Business Culture Counts!

How Small Business Culture benefits you.

Small Business Culture

Business culture is defined by attitudes, beliefs, behaviors and traditions of your workforce. They are ingrained in the business and team; and hey will be accepted as the norm. Culture can also determine the type of customers you attract, the growth of the company and the quality of serve you deliver is an important aspect for your business’s. If employees don’t buy into the company culture, then everything else is wasted. A new hire should be taught the company culture early on in their training. An employee who believes in the company culture will live and share it with others.

Build your teams engagement mindset!

emotionally engaged employee

We believe it’s possible to build an “engagement mindset” starting with some small steps. First pick a project, process or issue. Second, talk to the team and get their buy in. Lastly remember to TRUST, yourself as well as your team. An “engagement mindset” empowers teams, builds collaboration and frees team members to use their strengths to contribute to team success. It clarifies and prioritizes expectations and celebrates individual contributions to shared goals. Like most new skills, it takes practice but the end results will build trust and confidence. Contact me, if you want to know more about how creating the engagement mindset!

An employee who is emotionally engaged is better than just engaged

emotionally engaged employee

An emotionally connected employee that feels for their organization and their work is tuned in, turned on and eager to go the extra mile. Recently, Harvard Business School did a study that shows that more than raises or promotions, employees want to feel their input is valuable to the enterprise. If a worker feels safe, secure, valued, seen, heard and belonging, they will be more productive members of the team. Only when people know what it feels like to be first in someone else’s eyes can they sincerely share that feeling with others. We’re not saying choose your people over your customers. We’re saying focus on your people first because of your customers. That way everybody wins. Always treat people as the source of the solution…. NOT the cause of the problem. Contact me to learn more on how to make your employees emotionally engaged.

Employee: to be engaged or not to be, that is the question…

According to Gallup ONLY 30% of U.S. workers are truly engaged. Where actively disengaged workers cost businesses over $450 billion per year! Individually that costs employers about $18,000 per year. Our experience working with clients for many years, we believe the costs are even more than this. What is the cost to you, for example, of an employee who doesn’t pay attention to loan documents and makes a significant mistake? What’s the additional cost when that client tells everyone about their bad experience? It is important to evaluate your business and think about the kinds of costs lack of engagement can cause so your team understands the value of improving it. Engage us on how to can turn those disengaged workers engaged!

Outsourced HR Saves Businesses Time and Money

Running Human Resources internally is very time consuming to do well and still leave time to focus on the core business. Employers believe that they are saving money but typically do not consider the amount of work required to keep up with ever changing federal, state, and local employment laws and regulations. In addition, given the many aspects of HR – employee relations, benefits administration, leave administration, legal compliance, etc. – it is simply not cost effective to hire staff with all this expertise. That is why so many businesses choose to outsource the HR function. Our HR teams brings all those skills to bear at a much lower cost than having internal HR staff.

The Effect of Recent News on Bank Incentive Pay Plans

By now, you have heard the news of the employees of a large bank fraudulently opening millions of accounts and thousands of credit cards without customer’s consent. Thousands of employees have been terminated and the CEO is leaving the organization.

Here at EW, our expertise in Compensation Plan Design and Analysis gives us a unique perspective on this situation. There are several HR issues at play here – the incentive plan design, the plan administration and management, and the corporate culture.

As designed, the incentive plan seems to have driven the desired behavior – opening new accounts with existing customers. However, the plan likely should have had some safeguards built in, such as having the compensation not be paid until the account had been open for a specified amount of time and/or a “claw-back” provision. A claw back/charge back policy is one which takes back the commission paid if a client cancels within a certain timeframe or is considered to be a “no-start”. As you can see, the design of the plan needs to not only take into account motivating the desired behavior, but also ensuring that the behavior leads to the proper type of business for the company.

Clearly, the administration and management of the Bank’s plan was lacking oversight and internal controls. Too often, incentive plans are designed with the revenue goals in mind, while the mechanics of the administration and management of the plan are an afterthought. This can easily lead to the situation in which the Bank finds itself. Included in a holistic compensation plan design (especially an incentive plan) are the details of how the results will be tracked and how/when compensation will be paid. And, of course, oversight needs to be a part of this as well, especially in the financial services industry.

Finally, the impact of the culture of the organization must be taken into account during the plan design phase. The Bank at the center of this situation has long had a well known sales culture. While this is enviable if channeled in the right way, it can (and clearly did) lead to problems if employees feel extreme pressure to meet targets. What is apparent is that meeting goals was the top priority and led to no questions being asked as long as that top goal was being achieved. It is an easy trap to fall into if sales is the most important focus of the organization.

In the Bank’s case, since there was such a strong sales culture, all the more reason to ensure that both the design and administration of the plan needed to ensure that the right kind of business was being acquired. The effect of the situation in which this Bank finds itself is instructive for all financial institutions as new compensation plans are designed or as existing plans are reviewed periodically, as they should be.

If you need assistance with compensation plan design, review, analysis, market bench-marking, or administration, the HR professionals at EW have over 25 years of experience and have done a wide range of compensation projects for banks across the West.

Human Resource Specialists