The Changing Landscape of Employment
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- Harold Caldwell
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1 The Changing Landscape of Employment
2 The Employment Landscape Dynamic and ever changing Trends A retrospective look A glimpse at the future of employment What exactly is changing? Why is it changing? What is affecting the change?
3 Trends Affecting Employment Competition to attract and retain valuable employees Pressure to attract new customers and retain old ones Pressure to optimize employee performance Tighter cash flow and fewer financing options Uncertainty related to health care and workers comp Increased employee litigation Escalating governmental compliance burdens Increased employer taxes especially SUTA
4 A Retrospective Look Traditional arrangement Employer managed all aspects of the business including, but not limited to: HR and Personnel: Recruiting, hiring, training, handbooks, policies, managing, coaching, termination processes, etc. Benefits: health insurance, retirement plans, workers compensation, etc. Administration: Payroll, tax compliance, unemployment, deal with employment-related legal matters, etc. Managed all other aspects of the business
5 A Few Types of Outsourcing [relative to the employment model] Outsourcing: ASO Administrative Services Organization BPO Business Process Outsourcing HRO Human Resources Outsourcing RPO Recruitment Process Outsourcing TBO Total Benefits Outsourcing TPO Training Process Outsourcing BTO Business Training Outsourcing PEO Professional Employer Organizations
6 PEOs are among the fastest growing business services in the U.S. since the 50% of U.S. employees will be employed by PEOs by 2020.
7 PEOs in Businesses today are increasingly using the power of PEOs to improve productivity and profitability by assuming the administrative functions of an HR department. action Employee benefits Payroll Employment administration Risk management Workers compensation
8 THE PEO EVOLUTION
9
10 40% of small business employees with individual health plans pay $1,000+ in annual deductibles.
11 78% of employees consider health insurance the most important benefit! The cost of Social Security, Medicare & Unemployment insurance account for 35% of all wages/salaries in the US! % % % FACT: Without PEOs, many small businesses simply could not afford to offer a comprehensive and reasonably-priced benefits package. Average annual cost of regulation, paperwork, and tax compliance for companies: Less than 20 employees: $7,000 per employee Less than 50 employees: $5,000 per employee Less than 500 employees: $3,400 per employee
12 2014 Changes Individual and small group exchanges Individual mandate No highly comp d (i.e. management) carve-outs allowed Pay or play Max 90 day waiting period for eligible full time employees Small business tax credit increases (exchange plans only) No lifetime or annual $ limits on essential health benefits No pre-x exclusions The PEO Relationship For the most part, no effect Will not subject a small group to large group requirements Will not allow evasion of requirements Question re small business tax credit (low wage groups <25) Assist clients who are overwhelmed and need simple answers SOI benefits service allows flexibility Market for high-end individual plans
13
14 Business owners spend too much time on HR administration services. 67% From the number of labor laws/regulations grew by 25% nearly 67%. Owners of SBE/MBE spend up to 25% of their time on employment paperwork.
15 To reduce cost of healthcare & benefits To free up time to focus on core business competencies To improve recruitment & retention To reduce the cost of HR administration What PEOs Offer Healthcare Benefits Payroll and Tax Administration HR Technology 84% 97% 97% Employee Services 79% Termination Processing 70% Retirement Benefits Training 52% 59%
16 90% 80% Percentage of Companies 70% 60% 50% 40% 30% 20% 82% 69% 72% 71% 43% 55% 46% 37% 10% 0% Satisfaction with quality of hire Satisfaction with healthcare benefits Satisfaction with time to fill Satisfaction with employer brand PEO No PEO
17 10,837,269 Total number of small businesses in the U.S. 28,176,899,400 Estimated hours worked by U.S. small business owners each year 45% time spent on HR tasks 12,679,604,730 each year if all U.S. small businesses worked with PEOs When asked What would you do with time saved by outsourcing HR tasks? Small business owners responded: dedicate more time to dedicate more time to 42% growing their business 50% running their business 8% other
18 Your Unemployment & workers comp savings when working with a PEO Company Size 1-25 employees up to 100 employees Percent Saved 45% 25% - 35% Small business owners save approximately 100 HOURS A MONTH by outsourcing HR tasks to a PEO. What would YOU do with the extra 100 hours a month gained and money saved by using a PEO?
19 facebook.com/soipeo twitter.com/soi_peo linkedin.com/company/soi URL: Phone: Fax: SOI Corporate Headquarters
20 Thank You!
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