Offering competitive benefits packages to recruit or retain high caliber employees can feel impossible when you’re up against a company that’s 20 times your size. You’ll either lose the employee or you’ll get clobbered with ridiculous prices or cheap insurance substitutes that deny virtually every claim that employees submit.
Small business owners like you are losing employees to your much larger competitors, because those companies can afford to give away more enticing benefits packages.
When you lose the recruiting war with key employees, you can quickly face the reality of high turnover rates and increasing personnel costs, both of which can be crippling for a small business.
In this article, we will show you how a small business like yours can start winning the talent war by offering highly competitive benefits packages–and cut your costs at the same time.
Bigger corporations are able to offer better benefits, because they are able to spread risk across a much larger talent pool. With more employees, they have better bargaining power and the cost of insurance per person goes down.
Wouldn’t it be nice if you could have the same bargaining power with insurance companies as a Fortune 500 company?
That’s exactly why so many small business utilize a Professional Employer Organization (PEO) like Delta Administrative Services.
With a PEO, your company technically becomes part of the PEO’s employee base, so insurance companies are able to spread their risk across the much larger employee base of the PEO.
Using a PEO also means that you will no longer have to shop for better insurance rates every year, because the PEO automatically does all that for you. Since the PEO’s interests are aligned with yours, you are ensured the best possible outcome.
Outsourcing your Human Resources
By outsourcing your HR to a PEO, you get access to the best benefits on the market, including major medical, dental, prescription drug, vision, disability programs, life insurance, and more. Partnering with a PEO allows you to compete in the larger marketplace, granting you access to a greater talent pool when hiring new employees. Competing with bigger companies also helps you increase your visibility and open the door to more business deals and high-value connections.
With more affordable and aggressive health benefits, your employee wellness and satisfaction will increase, as will your overall workplace productivity. Employees who are more satisfied and engaged are also more likely to describe their employer as “innovative” and “taking the right steps to be competitive”–both of which are characteristics that your ideal prospective employees are searching for.
You are probably thinking: “Won’t the cost of outsourcing my HR be just as expensive as paying for these upgraded benefits myself?” Not necessarily. Let’s break it down for you.
How it works
When you outsource your HR to a PEO like Delta Administrative Services (DAS), you enter a co-employment agreement. In this agreement, we become the technical employer of record with the IRS, and we assume specific employer rights, risks, and responsibilities.
Your employees will still be directed and managed by you, but they will be working for the PEO under contract. By pooling your business in with other small businesses, we are able to provide you and your employees with big business benefits at highly competitive rates.
This will help you compete for talent in the larger marketplace, as well as prevent you from losing current employees to bigger companies that offer better benefits.
DAS will take on the liabilities and responsibilities for your personnel obligations, and we’ll also manage the HR side of your business for things like employee training, handbook creation and upkeep, payroll taxes, unemployment insurance, wages, workers’ compensation, W-2 creation and distribution, and best of all, benefits management and coordination.
With reduced rates on tax qualified programs like section 135 plans, employee assistance programs, COBRA, 401 (k) plans, on-site enrollment, and group health insurance, your employees will feel more secure working for you and your turnover rate will decrease.
Getting these tasks out of your hair will help you recover time that could be better spent on things like growing your company (or just taking a personal vacation for a change).
At Delta PEO, we proudly offer custom tailored benefits packages that include the options that your employees want, and with the most trustworthy, top-of-the-line carriers that are typically only available to large corporations.
Beyond the benefits
When you choose Delta Administrative Services as your PEO, you can say goodbye to all that time you used to spend shopping for insurance carriers, dealing with third party benefits administrators, and negotiating workers’ comp rates.
We’ll take on the task of on-boarding your employees and enrolling them into your new benefits program. We will then continue to manage benefits administration, guiding your employees through every step of the process and answering any questions or concerns that they may have.
We’ll also make sure that you are up-to-date with regulatory reporting and taxes.
Contrary to popular belief, outsourcing your HR will not be more expensive than offering and managing these improved benefits on your own.
The average cost of managing these services in-house per employee is $1,744.
With a PEO, the average cost of outsourcing HR drops to around $1,295 per employee, saving you nearly $500 per person. Multiply that by the number of employees you currently have, and you can see that it quickly adds up… and it adds up to a tidy sum that can be put back into growing your company.
Companies that use a PEO typically realize a 27.2% annual ROI in the following areas:
- Health benefits,
- Workers’ compensation,
- HR personnel,
- Unemployment insurance,
- Payroll, and
- Additional external expenses associated with HR-related services such as benefits management and payroll deductions.
Recent studies show that the majority of business owners spend more than 200 hours annually on HR. That’s the equivalent of an entire month that you could have spent building your business rather than become trapped in it.
The first step to deciding if outsourcing HR is the right decision for you is to contact Delta Administrative Services for a free HR & Benefits assessment.
In this assessment, we will do a deep dive into your current benefit programs, internal and external costs, as well as the struggles you have recruiting and training employees. We’ll then craft a customized plan to help you turn your HR challenges into advantages.
But we want to be straight with you up front — We’re not the right fit for every business.
That’s why we will take the time to thoroughly understand your challenges and business processes. We want to make sure that your problems are the kind that we can fix.
We are typically a great fit for most small businesses with 15 to 1,000 employees.
If we can help, we will very specifically calculate and illustrate for you the precise financial impact we can have on your company’s profitability and growth.
If we don’t think we’re a good fit, we’ll certainly point you in the direction of someone else who can help.
Let us help you win the talent war against bigger competitors by offering better benefits. Contact Delta today to learn more about how we can help you create the perfect benefits package to help you compete in the larger marketplace.