Especially in the current economy, increasing health insurance costs are a huge worry for most small to mid-sized businesses, and they feel that they have no control over this annual “surprise”. And insurance, and all of the various options, is complicated, and they really don’t know who to trust. Fortunately for our PEO clients, YPP takes care of negotiating for health and workers’ compensation insurance so they don’t have to. While we don’t sell insurance, our experienced HR professionals not only sort out what’s best for each of our clients’ businesses, we also take a strategic, holistic look at all of the various factors that go into keeping costs down, while still maintaining our clients’ ability to attract and retain the best people.

If you are dissatisfied with your insurance renewals and simply don’t have the time or experience to stay on top of all of the complexities and changes throughout the year, pick up the phone and give us a call, and let’s talk about adding the HR Divas to your team.

If you already have an employee handbook, you have taken an important first step in protecting yourself and your business.  Done correctly, a handbook creates a strong first line of defense against discrimination, harassment and other types of employee claims.  However, an out-of-date handbook greatly diminishes your protective shield.  So, it’s important every year to have your handbook reviewed from both a state and federal perspective to ensure it takes into account changes in the regulations, as well as legal cases that my have changed the regulatory environment.  Finally, your updated handbook needs to be circulated to all employees and you need to ensure that each employee signs off on having received the update.

For those who haven’t yet gotten around to creating a handbook, there are many benefits to you, your company and your employees, beyond those mentioned above.  Not only does a well crafted handbook offer protection, it can also create a more harmonious and productive work environment for your employees.  Whenever there is uncertainty, employees spend needless time and energy filling in the blanks.  With all of your policies clearly laid out, employees can instead focus on their jobs and your customers, increasing productivity and reducing tensions.

One final word of caution regarding handbooks – the internet is NOT your friend in this case.  There are many handbook templates and generators floating around in cyberspace.  Unless they come from a reputable HR or legal firm, including a recent review, you should be cautious.  In addition, it’s easy to mistakenly include policies that do not comply with California-specific regulations and end up in trouble.

Fortunately, having your handbook reviewed, or creating a new one, with the help of an HR professional is neither a big nor an expensive project.  So, take time to get that task done and off of your to-do list.  If you need help with your handbook, give us a call.

Traditionally, the circle of “trusted advisors” to small business leaders is made up of CPA’s, lawyers, and bankers. While certainly qualified to give you expert and objective advice, these individuals will obviously focus primarily on their specific areas of expertise. And, of course, they often charge for their services. So, while we don’t discount their importance, we believe that savvy business owners need to expand their network of advisors.

Another avenue for consultation is industry groups, and their related publications, surveys, and services. These trade associations are a good way to stay abreast of industry trends and to get an idea from your competitors and associates of what is working, and what is not, within your industry. However, sometimes these groups can not see the forest for the trees because everyone is looking at the challenges from the same vantage point – the “groupthink” phenomenon. Again, we aren’t discounting the importance of industry associations; we just believe that you need to broaden your avenues for advice.

One idea that has been around for quite a while is CEO Roundtables. These can take many forms, but we strongly believe that a non-competitive, cross-industry, truly peer-based, confidential CEO group is an invaluable source of feedback and advice as you face the daily challenges of running your business. There are a host of roundtables available, with differing costs, time commitments, and levels of formality. Like anything else, you have to find one which suits your style and personality, as well as your ability to commit time on a recurring basis. And, don’t give up. If the first one you try doesn’t fit, look for another. However, we suggest that you don’t give up on a group until you have attended at least five or six meetings.

However you decide to expand your network, don’t delay. You don’t have to go it alone and, in fact, your business will benefit if you don’t. There are many options available to you including the group which YPP is the founding sponsor, Central Coast CEO Roundtables, and which we are expanding to the San Francisco Bay Area. Take a look and see if we might be a fit for you.

Isaac Asimov’s famous quote begins with the iconic statement that “the only constant is change” and goes on to say that “no sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be”.

Two significant challenges confront business owners in keeping up.  First, you have to be aware of what’s changed in the four key areas of employment: payroll, HR, benefits and workers’ comp.  That could be a full time job in-and-of itself.  And, let’s be honest, you are an expert in your business, not in payroll taxes, employment law, benefits administration, and insurance.  So, even if you can stay abreast of all of the changes that might affect your business, you may not know what they really mean to your bottom line or your company’s future.  Second, with some changes required and others optional, you have to decide how, when, or even if you should implement a change.

Take the Brinker case regarding meal and rest periods that is before the California Supreme Court.  A final ruling has not been issued, so each employer must assess the potential impact and make a business decision which balances the risk of the ruling going one way or the other with your needs, your customer’s needs, and your bottom line in this tough economy.

Or take, for example, the recent reduction of the Social Security payroll tax.  This change didn’t happen until early December but it appeared to be a fairly straight forward, mandated change.  But wait – for self-employed workers, who pay both the employee (worker) portion AND the employer portion, it was unclear what the reduction would be; i.e. would it only apply to the employee portion or to both the employee and employer portion?

You wouldn’t decide if your company should be a partnership or a corporation without professional advice from your attorney or your CPA.   Likewise, don’t try to stay current with, nor interpret changes in, the areas of Payroll, Human Resources, Employee Benefits, and Workers’ Compensation and Safety without also seeking the advice of a professional in the area Employer Services.

Whether it is a small, one time consulting project to review a certain area of your employment relationship with your employees, or a desire to completely offload all of the administrative burdens of being a California Employer and focus on the business of your business, YPP can help.

In the world of Human Resources the difference between being in compliance with the myriad of state and federal HR regulations and taking the position that nothing has ever happened to your company so it probably never will, could cost you dearly in penalties and fines – regardless of the size of your company.

Not only has the amount of both state and federal regulation increased many times over in recent years, but increasingly these statutes apply to smaller and smaller companies.  In addition, both state and federal agencies have increased enforcement actions dramatically.  A recent Department of Labor action against a company in Novato, California was the result of the company’s misclassification of only 29 employees as exempt from overtime.  The judgment was a whopping $209,000, or more than 7,000 per employee!

Add Heath Care Reform, where the IRS released updated rules on December 22^nd that could affect your health insurance offerings to your employees, to the NRLB’s recent proposal regarding union organizing activities, and how is a small business owner to keep up?  And, don’t forget that ignorance of the law is not a defense that would protect you from fines and penalties.

While there are many resources to help you stay abreast of rules and regulations that you need to know, one thing is for sure; you can’t afford to simply assume that everything is OK since nothing has ever happened in the past.  The current world of HR compliance is very different than in the past and the savvy business owner will take proactive action to stay informed and protect their business and profit.

At YPP, we help our clients stay informed and in compliance as needed.  As regulations are release or updated, our HR experts immediately assess the risk to each client and then recommend actions that keep them compliant with the least disruption to their business operations.  You should have the same awareness set up for your business.  If you need help, give us a call!

First, many of the procedures and regulations have not been written.  There is much lobbying and debate that will go into these final implementation instructions that could contain nuances which may directly affect you, your employees and your business.  For example, are your plans eligible for “grandfathering” and even if so, does that make sense for your business?  Are the contributions and eligibility rules of your plans discriminatory? The list is seemingly endless and the penalties can be extreme.  Therefore, you need to ensure that you or someone you trust is taking a strategic look at your plans in light of compliance, cost containment, and providing competitive benefits to attract, take care of, and retain the best employees.

So, what’s a business owner to do?  Well, what you can’t do is neither hide your head in the sand nor assume that your broker is taking care of all of this for you.  You could get yourself educated and stay on top of the details for yourself, but that takes your focus off of your number one goal of running and growing your business.  So, we don’t recommend that approach.  Or, you could assume that your benefits broker is doing that for you.  We don’t recommend this approach either since many brokers are focused on the cost reduction piece but have no interest or expertise in the compliance arena.  Therefore, what we do recommend is that you ask your broker directly to ensure that someone is tracking and analyzing the ever-updating world of Heath Care Reform and using that knowledge to ensure that your plans are in compliance, containing costs, and providing the level of benefits you need to take care of your staff, as well as attract and retain the best.

At YPP, we are doing this work on behalf of our clients and are making changes to our plans and plan offerings accordingly. And, we’ve even hired outside counsel with a specialty in the Heath Care Reform legislation and regulations to ensure we are on top of everything for our clients. So, if you aren’t sure if you are “good to go” with Health Care Reform – don’t forget that the penalties for missing a detail can be stiff – feel free to give us a call.

What is a PEO and how does it work?

PEO’s help small to mid-sized businesses lower the costs and risks of employee benefits, workers’ comp, payroll and HR.   PEOs provide large company employee benefits, retirement, workers’ comp, HR management/compliance, and payroll to small/mid-sized employers at the discounts that larger employers typically receive.  Once a company contracts with a PEO, the PEO will then co-employ the client’s employees. In the co-employment relationship, both the PEO and client company have an employment relationship with the worker. The PEO and client company share and allocate responsibilities and liabilities. The PEO assumes much of the responsibility and liability for the business of employment, such as risk management, human resource management, and payroll and employee tax compliance. The PEO and the client will share certain responsibilities for employment law compliance. As a co-employer, the PEO will often provide a complete human resource and benefit package for worksite employees.  The client company retains responsibility for and manages product development and production, business operations, marketing, sales, and service.

Who uses a PEO?
Any business can find value in a PEO relationship. PEO clients include many different types of businesses ranging from accounting firms to high-tech companies and small manufacturers. Many different types of professionals, including doctors, retailers, mechanics, engineers and plumbers, also benefit from PEO services.

How do PEOs help their clients control costs and grow their bottom line?
The PEO’s economy-of-scale enables each client company to lower employment costs and increase the business’s bottom line. The client can maintain a simple in-house HR infrastructure – or none at all – by relying on the PEO. The client also can reduce hiring overhead. The professionals at the PEO can provide critical assistance with employer compliance, which helps protect the client against liability. In many cases, the client can pay a small up-front cost for a significant technology and service infrastructure or platform provided by the PEO. In addition, the PEO provides time savings by handling routine and redundant tasks for its clients. This enables the business owner to focus on the company’s core competency and grow its bottom line.

How do employees benefit from a PEO arrangement?
Employees seek financial security, quality health insurance, a safe working environment and opportunities for retirement savings. When a company works with a PEO, job security is improved as the PEO implements efficiencies to lower employment costs. Job satisfaction and productivity increase when employees are provided with professional human resource services, training, employee manuals, safety services and improved communications. And in many cases, a co-employment relationship provides employees with an expanded employee benefits package, to include a 401(k), life insurance, discount plans, a flexible spending plan (FSA) and more.

Is partnering with a PEO right for your company?
Since PEOs handle employee benefits, retirement, workers’ comp, HR management/compliance, and payroll, look at how you are doing in these areas in terms of controlling costs and managing risk.  Are your benefits costs increasing more than 10-15% per year (or are you having to offer less and less to your employees in order to keep costs down)?  Are you spending time and money staying in compliance with ever changing HR regulations (or perhaps falling behind and increasing your risk of an audit or employee complaint)?  Have you had an employee complaint, high turnover, or low employee morale in the past two years?  Even if you use a payroll service, are you spending time and money doing what should be a simple task (or if you do it yourself, are you sure you are keeping up with all of the new regulations)?

What are your options?
Due to certain tax regulations, January 1^st is an optimal time to partner with a PEO.  So, if you are at all considering a PEO, now is the time to look into it – don’t delay.  PEOs come in all shapes and sizes, and they all offer different services within the bundle they provide.  There are a few large, national PEOs and many, smaller local PEOs.  Some include more services in their PEO offering and others offer some lesser used services as a la carte.  And, there are a variety of ways that each bills for service.  So, start by deciding if you prefer working with a large, national company or a smaller, local firm.  Then, look at what services are most important to you – Lowering the cost of benefits? Getting HR under control?  Offering more benefits to your employees (i.e. 401k, FSA, etc)? Getting a handle on workers’ comp and safety issues?  Recruiting?  Payroll? Finally, try to quantify the time and money you are spending on these areas and what the value would be of instead using that time focused on the business of your business.

For more information about the YPP PEO service:

For a small/mid-sized business, choosing a smaller, local PEO is a wise choice in that we afford you the high touch service and flexibility that you will not find with the large, national, call center PEO’s.  And, as YPP is one of California’s oldest PEO’s (founded in 1984), we also offer the experience and stability of a larger provider that most small PEO’s cannot.  YPP is really the best of both worlds.

Give us a call and we would be happy to do a free cost comparison for you:

Central Coast: (805) 928-5725

San Francisco Bay Area: (415) 495-2510

Toll Free: (800) 445-4737

E-mail: sales@ypp.com

PEOPLE:  People are the key to the success of all businesses, big or small.  In fact, the argument could be made that it is even more so in small businesses.  So, how can a small business compete in the area of attracting and retaining great people to represent the company?  And, since a small business has so many fewer employees, each one is that much more critical to the success of the company.

You might think with the current unemployment situation here in California that attracting great people isn’t an issue right now.  Well, think again.  First off, employees with experience and skills specific to an industry will always be in demand; so competing for the best is always an issue, regardless of economic conditions.  More importantly, however, is the issue of retention.  Turnover, especially in a small business, is expensive and disruptive.  It’s expensive to train a new person and it’s disruptive to lose the knowledge that the departed employee takes with them.  And, in a small business, your customers view your employees AS your company.  Lose a key employee and you might well lose some key customers.  It has been well documented that as the economy recovers, and it will, that there is pent up turnover lurking just around the corner.  Smart business owners will act now to be sure that they aren’t victims of this phenomenon which is building up momentum each month.

With the big guys offering big company compensation and benefits packages to attract and retain the best of the best, what’s a small business to do to compete?  Even if you could afford them, how do you even get access to those types of benefits?  First of all, be aware that “compensation and benefits” are broad terms in the eyes of an employee and, being more flexible by nature, your small business can be creative with comp and benefits.  For example, perhaps to a specific key employee, a generous time off policy is important while another may value straight cash compensation.  Or, maybe you have someone for whom the medical or dental plan is the main issue.  Since small business can be more nimble, this affords you the flexibility to be creative in ways that big companies cannot.  And, when the economy turns around and they come calling on your key staff members, they won’t be able to match your “comp and benefits” in terms of flexibility and your employee will happily stay where they are with you and your customers!  One word of caution, however, is to be sure that you are on solid ground from an HR standpoint, in terms of discrimination, wage and hour rules, and leave laws.  Getting the advice of a certified HR professional is of critical importance here.

As for classic, group employee benefits, the world is pretty simple there are small groups and large groups.  And, large groups (over 50 employees) typically get better rates.  There are some ways to get access to large group benefits plans and prices.  One way is to partner with a Professional Employer Organization (PEO). PEO’s pool their clients together, thereby creating a large group and thus being able to get large group pricing, as well as a breadth of benefits (401k, FSA, EAP, etc) usually not available or affordable for individual small businesses.  Being able to offer these types of benefits (at the discounts that larger employers typically receive) is a great tool for competing for and retaining great employees.

PIN POINT FOCUS:  As a small business owner, no truer words were ever spoken than, “Jack of all trades, master of none”.  In order to get things done, done quickly and done at the least cost, small business owners often wear many, many hats in the course of the week.  At the beginning, simple tasks were just that simple.  But now that your business is growing, those simple tasks are likely taking time away from letting you focus on the business of your business.  Let’s face it, your time is your most precious commodity.  Spend it unwisely and your company may lose an opportunity with an existing or potential customer.  Or, your lack of focus or expertise may even cause you to lose money.  In your larger competitors, they have specialists in a variety of areas accounting, legal, HR, payroll, insurance, etc.  You likely don’t do your own accounting or legal work; you have a CPA or bookkeeper and a lawyer.  So, why would you do your own HR, payroll, and insurance?  Is that really the best use of your time?  Are you really an expert in these complex areas that have governmental penalties and fines for mistakes?  Clearly the answer is no.

So, do what the big guys do and hire an expert.  In the case of a small business, that means outsourcing.  Outsourcing helps deal with the two key shortcomings of trying to do all of this yourself expertise and time.  A word of caution here is to be sure that how you outsource addresses both of these precious commodities.  You can hire a payroll company, an insurance broker and join an online HR service and that will certainly begin to address the expertise issue.  But, does that really give you back your time?  Consider the advantages of mirroring what big companies do in these areas.  They have an HR Director who is responsible for HR compliance and recordkeeping, employee relations, payroll, employee benefits administration, and safety/workers’ compensation.  Then, they have managers with the expertise to oversee each of the specific areas.  Too often, small business owners outsource, but they play the role of the HR Director hiring a payroll company, meeting and interacting with the insurance broker(s), and handling employee issues.  While this “partial outsourcing” solves part of the lack of expertise problem, it doesn’t address the more important issue of the value of your time.

To truly mirror the big companies, another strategy is total outsourcing.  In these areas, the common name for total outsourcing is HR Outsourcing (HRO) and the most common services of HRO are Administrative Services Outsourcing (ASO) and Professional Employer Organization (PEO).  With this business model, the ASO or PEO company provides the services of the HR Director and the expert managers, giving you both the expertise and the time you so desperately need.  Being able to completely turn over HR compliance and recordkeeping, employee relations, payroll, employee benefits administration, and safety/workers’ compensation the way big companies do, is the secret to success for many small businesses.

PROFIT:   In most small businesses, profit is king but cash rules.  So, that means that many purchase decisions in a small business are evaluated solely on price.  Unfortunately, this approach is short sighted.  Large companies, however, use a more accurate, long term measurement, Return on Investment (ROI).  ROI takes into account all of the costs (and cost savings) associated with a particular decision and, therefore, how the decision affects profit.  So, if you are looking at a new copy machine, instead of simply looking at the monthly rental and price per copy, an ROI analysis would also take into account the amount of time you spend making copies on an older, slower and less reliable machine, what else you could be doing with that time, and the money you spend at the local copy store because your machine broke down again and you needed to get a proposal out to a very large prospective client.  ROI analysis might even try to quantify the cost of business you lost because you couldn’t get proposals out in time.  Taking the longer view and focusing on profit over time will pay off for your small business in the long run.

There are many good lessons to be learned from how large companies conduct business.  And, there are many benefits customers find in doing business with small businesses.  The challenge for the small business owner in competing with the big boys is to learn the lessons of the big guys without losing your company’s small business advantages.  With the environment we are encouraged to “think globally but act locally”.  Successful small business owners need to take a page from their larger competitors’ playbooks and “think big but act small”.

If your company is like most organizations, change takes time.  And, changes in HR are even more difficult to make because often the decisions affect all employees and are not seen as time critical.  In fact, January 1^st is the best time to implement updates and changes to your HR policies and practices.  First, it naturally coincides with the beginning of the annual cycle for payroll and other government compliance and reporting regulations.  And, January often begins a new company planning cycle, which changes in HR policies can be designed to support.

HR Compliance Now is the time to look at how well you are doing and allocate time to fix little problems before they become big, expensive ones. Here are a few areas to be sure to look at:

Employee Handbook – Your Employee Handbook is your first and best line of defense against employee claims.  Honest answers to these questions will protect you and your company:

• When was it last reviewed and updated?
• Do you have documentation that employees signed off on the latest version?
• Are there changes that need to be made to stay in compliance with newly enacted regulations for 2011, including California specific ones?

Employee Recordkeeping – Documentation, not just the minimum set of required paperwork, is also critical to not only protecting yourself but to motivating and coaching your employees.  Do your employee records include:

• Updated  and/or correctly completed forms (e.g. I-9, W-4, employment application,  handbook acknowledgement, changes to payroll/employee profile information, etc)
• Separation of protected and confidential information
• Documentation of verbal coaching, performance, goals and objectives and other trends (good and bad)
• Documentation of any accidents, safety training, etc.
• Documentation and tickler of any expirations of required licenses, certifications, skills, etc.

Required Postings – Do you have all the required postings in all of your locations? Are they current and do they reflect accurate, California-based information.

Supporting Your Company’s Mission and Goals HR policies and practices play a critical role in supporting the goals of your organization.  When is the last time you evaluated if what you are doing (or not doing) relative to HR conflicts with how you want your employees to treat your customers, your critical suppliers and each other?  Here are a couple of areas that often cause conflicts between HR policies and company goals:

Leave Policy – If you just copied your leave policy from a handbook template that you got off of the internet, your leave policy may be more generous than it needs to be and may put you in a position of critical staff shortage when you least expect it.

Compensation – There are so many ways that compensation can create work habits that are right in line with your goals. And, unfortunately, compensation practices can also create a conflict between how your company should operate for optimum success and what your employees are doing based on compensation incentives (or disincentives).  Don’t forget that compensation is not just salary, it is the full compliment of employee benefits, time off, retirement, and salary.

Employee Benefits – It is getting more and more difficult to keep pace with the need to offer competitive benefits for employees and their families and the ever increasing cost of benefits.  And, there are many changes coming in this area.  While most brokers are experts at helping you control costs, managing your benefits also needs to take into account your ability to recruit and retain critical staff to help your company meet its goals.

So, as you can see, there is a lot of work to do and just a few short months to do it if you want to implement any changes for the New Year.  In attacking this project, it’s important to ask yourself:

Do You Have The Time Or Expertise? It’s not as simple as doing Google searches and seeing what other companies are doing or joining an HR association. Be honest with yourself and if you don’t have the time or knowledge to get these important things done, ask for help…before another January passes by!  Help can take many forms:

Hire an HR Consultant – Bring in a local HR professional to help you tackle a specific project.  Be sure to get references for the type of work you need done, a Scope of Work and estimate of hours prior to engaging them. And, be sure you feel comfortable that you can work with the consultant’s “style”

Outsource – Outsourcing day-to-day HR Administration (payroll, HR, workers’ comp and benefits administration) is one way to ensure not only ongoing compliance but also best practices and periodic reviews of your policies and practices.  And, in many cases, this may be the least costly option in the long run.

Don’t let your HR review get put off another year, exposing you to increased risk as the government gets more aggressive in enforcement efforts and employee claims become more frequent.

If you find you need help or are considering outsourcing, now is the time to start.  In the HR world, January is right around the corner.