Tuesday, February 24, 2009

Are Layoffs on Your Mind? Here is Some Friendly Advice

At a time when jobless rates are soaring and layoffs are on everyone’s mind there is a right way and a wrong way to do the ugly deed. Today’s business owner may be facing a situation where expenses are growing quicker than their profitability and revenue is declining. This volatile situation forces many to at least consider layoffs.

If you have not decided who is going to get fired then consider the following: What departments require cuts? Who can you live without? Who is vital to the organization? Also, look at the possibility of combining functions and roles. Here is a suggestion, do not combine reception with HR! Many companies may look at the fairness method of making cuts (i.e. seniority) This is wrong! Using the fair and balanced method will strangle the future of your company. Carefully evaluate those ewho have great relationships with your customers or who are strong producers in the respective departments, not just sales.

Okay, you have decided now how do you go and break the bad news? First and foremost, do it in person! There are many examples of companies using e-mail and other tech tools to do this and the results have been poor. It is a sensitive time and you need to show people respect. Give people to leave with dignity. I believe the way a company fires their staff shows how they really feel about their people.

Give a severance package. No, this is not the law, but isn’t it the right thing to do? It is acceptable to ask got a release to be signed when severance is offered, but at least offer. Again, do it in person and make the notification date the last day worked. The fact is allowing someone to work a few weeks after notification is counter productive and may increase tension and bitterness amongst your existing team.

Eliminate the perp walk!We all know what that is. When an employee leaves and the manager or security stands over their desk waiting on them to clean it out and then the fired team member is escorted out of the building, stop doing it now. Show your existing staff and the terminated person you still have trust and integrity. You trusted them while they worked there, trust them while they gather their belongings. Obviously, if there is a safety concern, then other steps may need to be taken to ensure the safety of everyone.

Lastly, be open and honest about what happens next. Communicate about benefits, COBRA and final pay. If a release is offered with severance explain to them the pros and cons of signing and what happens if they do not sign. Encourage them to speak to their attorney regarding a release.

Allowing people to leave with dignity and respect protects the team members who are left behind and prepares your company for the future when you may be hiring those same people back, or interacting with them as your next customer.

If you or someone you know may have questions regarding reducing your workforce, please drop us an e-mail at:


and a trusted advisor will answer your inquiry within 24 hours.

Sunday, February 15, 2009

Should You Use a PEO in Your Organization?

In today's unpredictable economy where layoffs are becoming more abundant and headlines screaming dismal news, many business owners are turning to a PEO for relief. A top challenge that small and mid-sized businesses face is managing and caring for their employees. Factoring in payroll, taxes, and insurance costs, employee-related costs can be one of a company's largest expenses. For the business owner PEOs take on the headache of payroll taxes, regulatory compliance, and an array of HR issues, from hiring to drafting an employee handbook to mediating conflicts. Although PEOs have been around since the early 1980s, the industry has been growing at 15 to 20 percent annually over the past several years, according to the National Association of Professional Employer Organizations (www.napeo.org), an industry trade group.

The trusted advisors at First Place Employer Services want to add this very important note, Professional employer organizations, or "PEOs," are not a quick fix and were never intended to be. We firmly believe as much as our industry has tried to educate, more is needed.

Historically, the government including our new administration has made managing employees today a costly and potentially dangerous proposition. Failure to comply with laws such as EEOC, ADA, COBRA, OSHA, FMLA and others could prove very costly. A small business owner could possibly lose their business as a result of a legal action for wrongful discharge or a dispute over wages.

Did you know? Most studies indicate the cost of "employment" ranges between 6 and 16 percent of your payroll.

No business owner is in business to write checks, file tax reports, shop for employee benefits, deal with workers' compensation claims and audits, or answer unemployment claims. Time devoted to these activities not only removes valuable time from the operational aspects of your business but, worse than that, generates no profit.

For those readers who may not be following this blog and are wondering, what is a peo we will answer that question again here:
The PEO concept is designed to be simple. Its origin can be traced to members of the accounting profession who wanted to provide relief for many of their small business clients who spent a great deal of time dealing with administrative challenges such as payroll and payroll related taxes, ongoing tax penalties, and unemployment plans and workers compensation coverage.

For a reasonable fee, a Professional Employer Organization (PEO) assumes responsibility and liability for the "business of employment," including risk management, human resources, labor law compliance, payroll, and employment taxes. The customer or client (business owner) manages product development and production, marketing, sales and service. The PEO and the client contractually allocate some and share other traditional employer responsibilities and liabilities. Subsequently, both the PEO and the client enjoy an employment relationship with the workers.

Typically, a PEO offers a much wider selection of benefits often at considerably lower cost due to the large numbers of employees in its pool. PEOs and their clients enjoy a complete suite of Fortune 500 type benefits.

Did you know? 2,500 PEOs are open for business and enjoying annual growth rates as high as 30 percent. Moreover, experts contend PEOs have tapped a bare 2 percent of their market potential.

As a premier PEO brokerage firm the trusted advisors at First Place Employer Services assist our client's locate the best PEO for their unique business needs. A franchise owner will have different HR and benefit needs from a dental practice.
Before representing a partner PEO, we thoroughly check each PEO for stability and strength. We encourage our prospective clients to check the references of the PEO. It is always sound practice to speak with clients who have used the PEO. Contact the licensing agency in your state and ask if there are any past problems or complaints filed.
Did you know? If we match a client to a PEO, and the PEO performs poorly, we may lose your business.

If you or someone you know may have questions regarding the benefits of a PEO, please drop us an e-mail at:


and a trusted advisor will answer your inquiry within 24 hours.

Sunday, January 18, 2009

What exactly is a PEO?

Our team of advisors have been lucky enough to work in the PEO industry for a number of years. We are a team of HR professionals, insurance professionals and client evangelists. We strive to help our client's and their friends focus on the business of business,rather than the busy-ness of business.

We wanted to begin a series of Blog posts answering the questions of, What is a PEO? and the benefits surrounding the PEO concept.In future posts we will attempt to address the advantages of outsourcing your non-profit generating activities to a PEO, the types of businesses that are a great fir for a PEO and how a PEO helps you, the business owmer control costs, amongst others.

As always, if you have a question you can reach a trusted advisor by calling 877-634-7787 and we will be honored to help you. Now on to the blog.

A PEO defined: The National Association of Professional E,mployer Organizations define a PEO as

Professional employer organizations (PEOs) enable clients to cost-effectively outsource the management of human resources, employee benefits, payroll and workers' compensation. PEO clients focus on their core competencies to maintain and grow their bottom line.
Businesses today need help managing increasingly complex employee related matters such as health benefits, workers' compensation claims, payroll, payroll tax compliance, and unemployment insurance claims. They contract with a PEO to assume these responsibilities and provide expertise in human resources management. This allows the PEO client to concentrate on the operational and revenue-producing side of its operations.

A PEO provides integrated services to effectively manage critical human resource responsibilities and employer risks for clients. A PEO delivers these services by establishing and maintaining an employer relationship with the employees at the client's worksite and by contractually assuming certain employer rights, responsibilities, and risk.

That being said, here at we like to offer this as a perspective:

Outsourcing — the practice of using outside firms to handle work normally performed within a company — is a familiar concept to many entrepreneurs. Small companies routinely outsource their payroll processing, accounting, distribution, and many other important functions — often because they have no other choice. Many large companies turn to outsourcing to cut costs. In response, entire industries have evolved to serve companies' outsourcing needs.

But not many businesses thoroughly understand the benefits of outsourcing. It's true that outsourcing can save money, but that's not the only (or even the most important) reason to do it. As many firms discovered during the outsourcing "mania" of the early 1990s, outsourcing too much can be an even bigger mistake than not outsourcing any work at all. The flat economy caused many companies into huge layoffs and subsequently outsourced functions that were better kept in-house. Wise outsourcing, however, can provide a number of long-term benefits:

Control capital costs. Cost-cutting may not be the only reason to outsource, but it's certainly a major factor. Outsourcing converts fixed costs into variable costs, releases capital for investment elsewhere in your business, and allows you to avoid large expenditures in the early stages of your business. Outsourcing can also make your firm more attractive to investors, since you're able to pump more capital directly into revenue-producing activities.

Increase efficiency. Companies that do everything themselves have much higher research, development, marketing, and distribution expenses, all of which must be passed on to customers. An outside provider's cost structure and economy of scale can give your firm an important competitive advantage.

Reduce labor costs. Hiring and training staff for short-term or peripheral projects can be very expensive, and temporary employees don't always live up to your expectations. Outsourcing lets you focus your human resources where you need them most.

Start new projects quickly. A good outsourcing firm has the resources to start a project right away. Handling the same project in-house might involve taking weeks or months to hire the right people, train them, and provide the support they need. And if a project requires major capital investments (such as building a series of distribution centers), the startup process can be even more difficult.

Focus on your core business. Every business has limited resources, and every manager has limited time and attention. Outsourcing can help your business to shift its focus from peripheral activities toward work that serves the customer, and it can help managers set their priorities more clearly.

Level the playing field. Most small firms simply can't afford to match the in-house support services that larger companies maintain. Outsourcing can help small firms act "big" by giving them access to the same economies of scale, efficiency, and expertise that large companies enjoy.

Reduce risk. Every business investment carries a certain amount of risk. Markets, competition, government regulations, financial conditions, and technologies all change very quickly. Outsourcing providers assume and manage this risk for you, and they generally are much better at deciding how to avoid risk in their areas of expertise.

A tip of the hat to for that piece.

First Place Employer Services encompasses reaching the most compatible PEO's while ensuring accurate and fair quotes, assuring proper client and PEO
Through our services, any company, in any industry, can streamline their
efforts, protect against unnecessary liabilities, provide Fortune 500 level
employee benefit packages, rest assured that government compliances are met,
reduce administrative costs, institute essential human capital programs, and
more. All of this without losing control of their business and their vision.

Sunday, January 11, 2009

Illegal Immigrants Suing for Wage and Hour Violations! Do They Win...

Off the record, the question or questions surrounding illegal immigration are one of our most asked questions. One may assume these questions are coming from Sunbelt states such as Florida or Texas. This is a false assumption as the two articles below point out.

According to reports from the Pew Hispanic Center approximately 1 out 3 employees working in the construction or labor fields, agriculture are illegal and 1 out of 5 employees were illegals in the office and house cleaning, hotel/motel and other service oriented jobs. A few statistics lean towards the more dangerous a job, the higher concentration of illegal workers are found in that workforce.
According to a January story in the Boston area,

Outraged at his low pay and uncompensated overtime, an illegal alien in Boston filed a complaint with the Massachusetts attorney general's office against a supermarket – and won his case.

According to an off the record interview, the illegal employee was sick and tired of below average wages and never collecting a nickel for overtime worked.
The supermarket that employed him, was ordered to provide back pay and fines of $200,000 to more than 300 workers

The worker and illegal immigrant was a father of five,and reported he worked 14 hours every day, six days a week since 2004 at the $6 rate. The owner of the supermarket was himself an immigrant and stated as business owners they were not aware of their state labor laws

If this supermarket owner enlisted the help of First Place Employer Services and one of our partner PEOs, he very well may have avoided this expensive and costly nightmare.
A PEO is a company that contractually assumes and manages critical human resource and personnel responsibilities and employer risks for businesses. The PEO assumes the employer responsibility for employment tax, payroll processing, benefit plans, and other human resource purposes.

PEOs enable clients to cost-effectively outsource the management of human resources, employee benefits, payroll and workers' compensation. PEO clients are then able to better focus on their core competencies to maintain and grow their bottom line.

Businesses today need help managing increasingly complex employee-related matters such as health benefits, workers' compensation claims, payroll, payroll tax compliance and unemployment insurance claims. They contract with a PEO to assume these responsibilities and provide expertise in human resources management. This allows the PEO client to concentrate on the operational and revenue-producing side of its operations.

And not to be out done, a story from the Progressive Grocer sheds more light on this real and serious situation.

Hundreds of janitors in California have joined a class action lawsuit against Safeway, Albertsons, Vons and Ralph's supermarkets, as well as Encompass Staffing Services and its subsidiary, Building One Service Solutions, accusing them of paying cleaners less than minimum wage and making them work excessive hours without overtime pay, according to the San Francisco Chronicle.

The janitors and their attorneys have started an outreach program in San Francisco and Los Angeles to find more of the thousands of workers they estimate could join the suit as plaintiffs. According to lawyers, a large number of the janitors are immigrants with little knowledge of U.S. labor laws.

The lawsuit, Flores v. Albertsons, claims that the workers are illegally referred to as independent contractors, although the supermarkets make up their schedules and oversee their work. That arrangement, according to the suit, has saved the chains millions of dollars in overtime pay, payroll taxes and workers' compensation insurance.
The suit is seeking $100 million in compensatory and punitive damages.

If you have a question regarding this post or are not sure of your State's labor lawsw and how they relate to payment of wages or overtime E-mail your questions concerning wages or illegal employees in the workplace to a trusted advisor and we will respond within 24 hours firstplacerightchoice@1stplacemployer.com
Please visit us on the web @ http://www.1stplacEmployer.com

Friday, January 9, 2009

Payroll: To Outsource or Not That is the Question

A recent article from Business Week presents a fair description of the pros and cons of outsourcing. Our advisors at First Place Employer Services wanted to share our thoughts on the benefits of outsourcing.

For small to medium businesses, an in-house payroll service can be a costly overhead. If you consider the number of hours employees devote to payroll-related activities, along with production costs such as printing and distributing checks and creating tax documents, final costs can mount up. Compared to plans offered by payroll-service providers, it is easy to see why an increasing number of companies are choosing to outsource its payroll.

Fact:Payroll management is a time-consuming activity. By outsourcing this responsibility the administrative burden is removed, allowing employees more time to focus on being more productive on the core business.

Fact:Payroll mistakes can be costly for a company. Outsourcing your payroll will give you peace of mind knowing that every aspect of your payroll is being taken care of by professionals with very high accuracy.

Fact:In-house payroll activities function as reliably as the people doing the work meaning annual leave and sick days can affect productivity.

With a payroll service, output speed and quality will be constant as a trained professional will always be on hand. It will also save time on helping new hires understand the business’s payroll system.

Fact:Since payroll-services providers are specialists with vast technical resources at their disposal, they can process even the most complex payrolls to your satisfaction.

A good payroll-services provider will know all the ins and outs of payroll-related tax laws and regulatory mandates on the federal, state and local levels. Many companies have a generalist on staff and do not employ the skill set to understand the ever changing rules and regulations behind governmental regulations.

This compliance is the value propisition behind outsourcing your payroll. If pay checks are delayed or paperwork is mishandled, it’s the payroll-services provider’s responsibility to fix things.

With a professional client-centric like First Place Employer Services on your team; You can switch to another service provider in a snap – even if you have to absorb a portion of an existing service contract. Try firing, hiring and training in-house payroll staff in anything less than several weeks.

Boring, repetitive payroll work can act like an anchor on your business. Your staff, when freed of payroll responsibilities, will be free to focus on other, more creative work.

Do you have the time and energy to closely supervise your business’s payroll for time and rate abuse? Most payroll services firms have technologies that can spot and alert clients to various types of payroll abnormalities.

There’s a lot to be said for the peace of mind that outsourcing payroll services can bring to a business owner or manager. No headaches, no hassles: You’re left to focus on running a profitable business.

Saturday, December 6, 2008

Employers continue to feel the squeeze from swollen health care costs. Are HSAs the new treatment?

The continuing rise in the costs for employer based health insurance is bringing new attention to Health Savings Accounts or HSAs

HSAs are increasingly in popularity due to a feature, in which dollars are allocated to employees, who can roll the accounts over every year and take them with them when they leave. I have a host of clients that uses HRAs, and a host of clients that uses HSAs,” Bradley said. “Some companies prefer HRAs because they are not as cumbersome to set up, and they retain the funds, rather than returning them to employees.” But others favor the HSA for the effect it has on employees. “It encourages them to become better consumers of health care, since they’re spending their own money,” Bradley said. For instance, “if the money is coming out of their own pocket, consumers might ask doctors if they really need all three tests, or if they really need 100 pills instead of 50,” said Lou Basso, president of The Alcott Group, a Farmingdale-based professional employer organization and provider of human resources services.

For more on this topic, click the link below


E-mail your questions concerning your personal health care crunch to a trusted advisor and we will respond within 24 hours firstplacerightchoice@1stplacemployer.com
Please visit us on the web @ http://www.1stplacEmployer.com

Thursday, December 4, 2008

2009 Salary Planning Forecast

This post is a bit off center for our blog, but we found it quite interesting and thought it may help, might provoke a bit of conversation, and provide an overall view of how to make everything fine in 2009! Please take note at the bottom of the post for a few fantastic suggestions for alternative rewards.

It’s that time of the year again – time to set 2009 salary budgets. For the past 8 years the answer has been an easy one, 3.5%. Each year the surveys predicted that salary budget adjustments would remain flat and ahead of the Consumer Price Index.

That was, of course, until the latter half of 2008. With fluctuating energy prices and their domino effect on most goods and services, we may be facing the first year in which the salary budget adjustment will fall short of the consumer price index inflation rate. In the July 2008 consumer price index report from the Bureau of Labor Statistics (http://www.bls.gov/), the consumer price index had increased by 5.6% over July 2007 levels. Currently 2008 salary budgets (http://www.worldatwork.org/) are averaging 3.7%, which is higher than 2007 levels.

There is good news as we move into 2009, however. According to the Financial Forecast Center (http://www.forecasts.org/), a financial think-tank group, inflation rates will come under control in 2009, returning to approximately 3.6% per year.

While there are numerous salary budgeting forecasts published this time of year, Astron Solutions closely follows two highly regarded sources. The first is WorldatWork (http://www.worldatwork.org/). The second is Mercer, LLC (http://www.imercer.com/). Both have been providing salary budgeting forecasts for over 30 years.

The WorldatWork 2009 Salary Budget Survey contains data from 2,375 organizations representing 21 different industry segments. In terms of 2009 salary budgeting, WorldatWork reports the following:

2009 General Increase Budgets: 2.9%
2009 Merit Increase Budgets: 3.6%
2009 Total Increase Budgets: 3.9%

From an organizational level perspective WorldatWork discovered the following:

2009 Non Exempt Hourly Adjustments: 3.8%
2009 Exempt Salaried Adjustments: 3.9%
2009 Officer and Executives Adjustments: 4.1%

The report shows very little distinction by region of the country (range of 3.8% - 4.0%), metropolitan area (range of 3.7% to 4.1%), or key industry segment (range of 3.8% to 4.2%).

WorldatWork projects overall 2009 salary range adjustments at 2.5%.

The 2009 Salary Planning Report by Mercer has data from over 1,000 organizations representing over 12 million employees. Mercer reports an overall 2009 salary budget level of 3.7%, with 2009 budgeted structure adjustments at 2.8%.

Of more interest is Mercer’s analysis of compensation practice trends for 2009. The following is a list of compensation practices and their prevalence in the survey sample:

• Traditional Pay Grade/Salary Range System: 77%
• Use of Non-Monetary Reward Programs: 73%
• Job Families Linked to Formal Career Paths: 68%
• Use of Spot Cash Awards: 59%
• Use of Individual Non-Management Incentive Programs: 52%
• Use of Competency Based Performance Management System: 41%
• Use of Broad-Banded Pay Ranges: 21%
• Use of Skill-Based Pay Programs: 14%
• Use of Competency-Based Pay Programs: 13%
• Use of Gainsharing Plans: 12%

Those interested in a summary of all the 2009 salary budget forecasts should connect with Lake Associates Inc. (http://www.lakebiz.com/) of Albany, NY. They have compiled an excellent summary of all the major consulting firm forecasts for 2009. Based on their review, Lake Associates recommends the following for 2009:

• Salary Structure Adjustment: 2.9%
• Merit Increase Budget: 3.8%
• Total Salary Budget Adjustment: 3.9%

“Pay increases alone won’t work as a strategic attraction and retention tool,” notes National Director Jennifer Loftus. “With a 3.8% merit increase budget, there’s often little room to recognize top performers. Couple those increases with the escalating cost of living, and the importance of using a total rewards perspective becomes all the clearer.”
Consider alternative rewards, including telecommuting, compressed workweeks, and gas cards, as key elements in your total rewards toolkit to ensure your top talent stays with your organization through these possibly challenging economic times.

To learn more about this author, visit Jennifer Loftus's Website.

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