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  • Even the most organized payroll process can experience occasional hiccups. Whether it’s an underpayment, overpayment, or a tax withholding mistake, payroll errors can affect your employees’ trust and your business’s compliance if not handled quickly and correctly. 

    Here’s what to do when you discover a payroll error and how partnering with Group Management Services (GMS) can help prevent these issues from happening in the first place.

     

    Act quickly and communicate openly 

    Timing is everything. As soon as you discover an error, confirm who is affected and to what extent. Notify the impacted employees promptly, explaining what happened and the steps you’re taking to rectify the issue. Transparent communication helps maintain employee confidence and shows that you take their pay seriously. 

    At GMS, our Payroll Specialists and built-in audit tools in GMS Connect help clients catch discrepancies early, so most issues are resolved before payroll is finalized. 

    Find out why it happened 

    After you identify the mistake, dig into the root cause. Was it a simple data entry issue? A misclassified employee? An outdated pay rate? Understanding what went wrong helps you put safeguards in place to stop it from happening again. GMS guides clients through complex payroll compliance areas, such as employee classification and benefits deductions, so they can focus on running their business without worrying about hidden payroll pitfalls. 

    Correct the error carefully 

    Once you know the cause, fix the numbers promptly and accurately. For underpayments, issue an off-cycle payment as soon as possible. For overpayments, work with the employee to arrange repayment that follows federal and state wage laws. If the mistake involves taxes, adjust your payroll records and file any necessary amendments. 

    GMS handles these corrections on behalf of our clients, ensuring that payments and tax filings remain compliant and accurate. 

    Document everything 

    Keep a clear paper trail of what happened, when the mistake was discovered, how it was fixed, and any communication with employees. Documentation protects your business during audits and helps resolve any future questions that may arise. With GMS, all payroll changes, adjustments, and reports are securely stored, ensuring you always have the necessary records. 

    Strengthen your payroll process moving forward 

    Transform mistakes into learning opportunities by reviewing payroll workflows and incorporating checks, such as approval processes or automated alerts. Investing in modern payroll software or working with a payroll partner can significantly reduce human error. 

    At GMS, we combine advanced payroll technology with experienced payroll professionals to give businesses confidence in every payroll run. We’re not just processing payroll; we’re building proactive strategies that keep your business compliant, and your employees paid accurately and on time. 

    Payroll errors don’t have to define your business 

    By acting quickly, remaining transparent, and learning from past mistakes, you can rectify errors and safeguard your team’s trust. But the best strategy is prevention. Partnering with GMS means more than handing off payroll tasks. It means gaining a team dedicated to accuracy, compliance, and continuous improvement, so your business can focus on growth instead of payroll headaches. 

    Our online payroll software, GMS Connect, gives you the ability to complete payroll in minutes as well as manage and access payroll information anywhere there’s an internet connection. Additionally, our payroll software integrates with other platforms, enabling us to calculate and apply deductions for health insurance and other employee benefits seamlessly. Ready to see how GMS can make payroll simpler and more reliable? Contact us today to learn more. 

  • As a business owner, hiring a new employee is an exciting time filled with opportunity and growth. While welcoming someone to your team is thrilling, transitioning them into their new role and educating them about the business can feel overwhelming and challenging.


    Understanding the ins and outs of a company takes time and effort, so it’s important to educate your new hires and prepare them for their role and the responsibilities that come with it. This is typically achieved through an orientation or onboarding process.


    Although many people use the terms “orientation” and “onboarding” interchangeably when referring to new employee training, they actually represent two distinct processes that are essential for a new hire. With effective onboarding and orientation, a new employee is more likely to be engaged, effective, and productive.

    What Is Employee Orientation

    An employee orientation is a one-time event to introduce new hires to the company and familiarize them with the people, processes, policies, and culture. Orientation can include going through the employee handbook, introducing team members and upper-level management, reviewing health care and benefits information, vacation policies, and more. Employers may have new hires complete additional paperwork and provide them with their laptop, login, and other resources. Employee orientation is an event that introduces the company as a whole, allowing new employees to gain a deeper understanding of its mission, values, and culture.


    While every orientation differs depending on the company, an orientation can occur on-site, virtual, or in-person, though many choose to conduct it in the office. When you are organizing your orientation, it’s important to include the following:

    • Overview of your company’s mission, vision, and values
    • Tour of the workplace
    • Summary of company-wide policies regarding safety, health, and security
    • Introductions to company leaders
    • Overview of ethical practices
    • And more!

    Benefits of Conducting an Employee Orientation

    Conducting an employee orientation can be a challenging endeavor, but it will help prepare you and your employees in the long run. There are a variety of benefits for having a robust orientation, including:

    • Reducing employee anxiety
    • Improving employee trust and loyalty
    • Strengthening your company culture
    • Saving time spent answering questions in the future by preemptively conveying important company information to all new hires

    What Is Employee Onboarding

    Employee onboarding is a broad and strategic process aimed at introducing new hires to their daily responsibilities and helping them fully integrate into the workplace, team, and their new role. This process typically spans several months, sometimes extending to a full calendar year, and involves a series of role-specific training sessions, educational meetings, and introductory projects. Onboarding is typically used to help an employee slowly acclimate to their job, introducing them to the typical processes, knowledge, and technologies they’ll need to be successful in their role.

    Separate from orientation, onboarding includes tasks such as:

    • Regular meetings with a manager or supervisor
    • Training on specific job tasks
    • Goal setting for what they hope to accomplish in this new position
    • Shadowing someone in a similar position
    • Filling out new hire paperwork such as I-9, W-4, and potentially direct deposit forms
    • Mentorships between long-term employees and new hires 

    Benefits of Employee Onboarding


    Similarly to employee orientation, onboarding has a variety of long-term benefits for employers and employees, including:

    • Increased productivity by helping employees learn the job faster
    • Greater long-term employee retention by reinforcing a robust and collaborative company culture
    • Higher employee engagement by helping employees understand their roles and how they can contribute to the company’s success

    Improving The Employee Experience


    Employees are the heart and lifeblood of every company. Business owners cannot grow their company without the help and expertise of their workforce. To ensure your workforce operates smoothly and efficiently, employees require the right training and tools for success. While business owners know the ins and outs of their business, it’s not always easy to explain or train new hires, especially when they have a business to run. That’s why a professional employer organization (PEO) like Group Management Services (GMS) exists.


    Our online employee training programs, designed for small and mid-sized businesses, are tailored to meet the specific job functions of your employees. This approach streamlines the process, enhances employee performance, and reduces training costs. Your employees can easily access online training courses through our learning management system (LMS) to acquire the necessary skills to support your business. Our human resource information system (HRIS) will also help streamline the orientation and onboarding processes. Employees can easily fill out important documents and the necessary paperwork through an online program, effectively simplifying the process.

    Are you looking to improve your orientation and onboarding efforts? Contact us; we would love to assist you!

  • The Society for Human Resource Management (SHRM) defines company culture as the shared values, attitudes, and practices that characterize an organization and influence how things are done. Essentially, it’s the “how” of an organization, encompassing both the written and unwritten rules that guide employee behavior. 

    Culture is evident in the way employees interact, how leaders communicate, and the overall experience people have when they walk through your doors. In 2025, culture goes beyond creating a positive work environment; it is a critical component of how successful companies operate, grow, and retain talent. 

    From hiring and onboarding to performance reviews and daily interactions, culture impacts every aspect of your business. Companies cannot afford to treat culture as a background element. It is a competitive advantage, a retention tool, and a blueprint for long-term success.

    What Makes a Strong Company Culture? 

    A strong culture is more than a mission statement on the wall. It is built on consistency, clarity, and trust. Employees should understand the values that guide decision-making and feel like those values are reflected in the way the company operates. 

    Key traits of a healthy culture include: 

    • Clear communication and transparency from leadership 
    • Respect, trust, and psychological safety 
    • Opportunities for growth and recognition 
    • Inclusive practices that make everyone feel welcome 
    • A sense of purpose that connects work to a larger mission 

    When these elements are in place, employees are more likely to feel engaged and motivated. When employees feel their work is meaningful, they are 2.7 times more likely to stay with a company.  And when people feel good about where they work, they are more productive and more likely to stick around.

    Culture Drives Retention and Performance 

    Employees are not just looking for a paycheck; they are seeking purpose, connection, and alignment with their work. A significant majority, 92%, of employees across all generations say that company culture impacts their decision to stay with an employer. A thriving culture fosters engagement and reduces turnover, which is critical as hiring costs and labor shortages continue to rise. 

    A Strong Culture Builds Resilience

    In the face of economic uncertainty and ongoing workplace disruption, a positive culture provides stability. Teams that trust their leadership and feel supported are more adaptable during times of change. Companies with a clear identity and shared values are better equipped to handle challenges without losing momentum. 

    Culture Should Be a Core Part of Your HR Strategy 

    The most successful organizations recognize that culture is integral to strategy. It forms the foundation of your HR practices and drives long-term business success. 

    Workplace culture influences every aspect of the employee lifecycle, from onboarding and performance management to benefits and communication. An effective HR strategy intentionally weaves culture into its policies, programs, and people practices. This involves establishing clear values, investing in leadership development, offering competitive benefits, and promoting inclusion. Companies that align HR decisions with cultural goals are more likely to build loyal, high-performing teams. 

    Culture is something you actively design and maintain throughout the employee’s journey. This includes: 

    • Defining core values and integrating them into company policies 
    • Creating structured onboarding processes that reinforce expectations 
    • Developing leadership that models and supports the culture 
    • Offering benefits and perks that align with employee needs 
    • Implementing performance management systems that reward the right behaviors 

    When culture and HR strategy are misaligned, your business will feel the disconnect. High turnover, lack of engagement, and poor team cohesion often indicate that culture is not being supported at the operational level. 

    How PEOs Support Company Culture 

    Partnering with a professional employer organization (PEO) like GMS provides businesses with the tools and support necessary to cultivate a strong, people-first culture. A PEO helps shape culture in several key ways: 

    • HR expertise: GMS helps you build and maintain policies that reflect your values while staying compliant with ever-changing employment laws. 
    • Employee engagement: From performance review systems to recognition programs, GMS offers tools that create consistent and meaningful employee experiences. 
    • Leadership support: We provide guidance and resources to help managers lead with clarity and consistency—two essential ingredients for a healthy culture. 
    • Comprehensive benefits: Offering competitive benefits shows your team that you care. Through GMS, small and midsize businesses can access Fortune 500-level benefits that support employee well-being and satisfaction. 
    • Scalable HR infrastructure: As your company grows, so do the cultural challenges. A PEO helps you maintain alignment across departments, locations, and leadership levels. 

    Your culture is what employees say about your company when you are not in the room, and job seekers are listening. A report from Randstad USA shows that 77% of workers consider a company’s culture before applying. Culture is now a critical part of your employer brand, influencing who wants to work for you and who stays once they are hired.

     

    At GMS, we understand that culture is not created overnight; it is built through intentional HR strategies and strong leadership. Our team collaborates closely with you to develop effective policies, enhance communication, enhance your benefits offerings, and foster a workplace that aligns with your mission and values. When culture is aligned with business goals, your team is more engaged, your brand is stronger, and your business is better positioned to succeed.

  • The hospitality industry operates on customer satisfaction, attention to detail, and delivering exceptional service every day. Whether you’re operating a hotel, restaurant, resort, or event venue, your business thrives on the strength of your people. And managing those people effectively is no small task. 

    From unpredictable staffing needs and high turnover rates to strict compliance requirements and competitive employee benefits, hospitality businesses face mounting human resources (HR), payroll, and risk management challenges. Fortunately, a Professional Employer Organization (PEO) can help take those administrative burdens off your plate. 

    Continue reading to explore how PEO services are helping hospitality business owners regain control of their operations, improve employee satisfaction, and focus more on what they do best: creating memorable guest experiences. 

    Staying Compliant in a High-Risk, High-Turnover Industry 

    Hospitality is a fast-paced industry, and with that pace comes complexity, especially when it comes to HR compliance. From wage and hour laws to workplace safety and anti-discrimination policies, hospitality employers must stay up-to-date with constantly shifting regulations. 

    Whether you manage a small boutique hotel or a national restaurant chain, compliance missteps can result in hefty fines, lawsuits, and damage to your brand reputation. A PEO like GMS provides access to a team of HR experts who stay up-to-date on federal, state, and local regulations, so you don’t have to. That includes: 

    • Ensuring compliance with labor laws such as the Fair Labor Standards Act (FLSA) 
    • Helping navigate tip reporting and minimum wage rules 
    • Assisting with Occupational Safety and Health Administration (OSHA) workplace safety requirements 
    • Providing support during audits or legal issues 

    With GMS as your partner, you can feel confident knowing your business is protected from costly compliance errors. 

    Solving the Hospitality Hiring and Retention Problem 

    Hiring in the hospitality sector is notoriously challenging. High turnover, seasonal demands, and competition for top talent often leave HR teams overwhelmed with recruiting and onboarding tasks. 

    A PEO can take the pressure off your internal team by providing: 

    • Streamlined recruitment and applicant tracking tools 
    • Onboarding support to get new hires up to speed quickly 
    • Access to competitive benefits packages that help attract and retain staff 
    • Guidance on workforce planning to help you scale up or down during peak seasons 
    • Integration of Human Resources Information Systems (HRIS) to centralize and automate HR processes 

    GMS also offers employee handbooks, performance management tools, and HR consulting services to help build a positive culture and reduce turnover.  

    Offering Big-Business Benefits on a Small-Business Budget 

    Hospitality businesses often struggle to offer the same benefits that larger companies use to attract top talent. But partnering with a PEO levels the playing field. 

    Through a PEO, you gain access to cost-effective, Fortune 500-level benefits such as: 

    GMS represents more than 50,000 employees, which allows us to help businesses purchase group health insurance at rates up to 24% lower for employee premiums and up to 15% lower for family premiums compared to the U.S. average. By offering better benefits, you’ll not only improve retention but also attract top-tier talent in a competitive industry.  

    Reducing Risk and Protecting Your Brand 

    Hospitality is about service, and your team is often the face of your brand. Unfortunately, that also means you’re exposed to potential legal and workplace risks. From employee injuries and harassment claims to workers’ compensation disputes and liability issues, even one incident can harm your reputation. 

    GMS provides comprehensive risk management services, including: 

    When your employees feel safe and supported, and your business is protected from unnecessary legal exposure, it creates a positive and productive work environment for everyone. 

    Simplifying Payroll and Time Tracking 

    From hourly workers to salaried staff, managing payroll in the hospitality industry can be a complex task. Factor in shift differentials, tips, overtime, and varying state tax laws, and you’ve got a recipe for errors and inefficiencies. 

    A PEO can automate and streamline your payroll process, including: 

    By letting GMS handle the back-office burden, you can focus more on guest satisfaction and business growth. 

    Transform Your Hospitality Business with GMS 

    Whether you manage a hotel, restaurant, or entertainment venue, your people are your greatest asset and your biggest challenge. That’s where GMS comes into the picture. 

    By partnering with a PEO, you gain the HR support, compliance guidance, benefits access, and payroll expertise you need to thrive in today’s competitive market. 

    Let GMS help you simplify your business so you can focus on what matters most: growing your business. Book a 15-minute chat to learn how GMS can help you grow and succeed. 

  • Protecting your company from potential legal risks is crucial for a successful and compliant workplace. In recent years, the number of lawsuits filed by employees against their employers has increased. While larger corporations often face the majority of these lawsuits, no business is entirely immune to such claims and the associated legal costs.

    While there are numerous concerns regarding the workplace, clients, employees, and legalities, all of them can be costly to your bottom line and business reputation, making it crucial to implement proper safeguards. This is where Employment Practices Liability Insurance (EPLI) comes into play.

    What Is EPLI?

    EPLI is a type of insurance that provides coverage to employers against claims made by employees alleging discrimination, wrongful termination, harassment, and other employment-related issues. Potential claims can include sexual harassment, bias based on gender, race, age, or disability, wrongful termination, negligence, and more. Even if you win the case, plenty of legal costs are associated with these claims, which can chip away at your bottom line. EPLI can protect your business from these kinds of claims by helping to cover the legal costs and damages related to them.

    What Can EPLI Help With?

    Since EPLI coverage protects against employee lawsuits, it is often used to cover claims related to the Americans with Disabilities Act (ADA), the Equal Pay Act (EPA), the Age Discrimination in Employment Act, and other similar laws. It is important to note that having EPLI coverage does not exempt employers from legal obligations; instead, it serves to provide additional protection if a claim is made against them despite their compliance efforts.

    This insurance typically covers legal and court administration fees, witness fees, and expenses related to court-ordered settlements or judgments.

    Importance of EPLI Coverage

    Cost reduction

    Employing EPLI coverage is important for the employer and their business. When a company has a large number of employee-related claims against it, the costs for legal counsel, potential damages, and other lawsuit fees can quickly add up. EPLI coverage acts as a protective layer between your business and the accompanying lawsuit costs, ensuring that a single lawsuit doesn’t jeopardize the company’s bottom line.

    Business protection

    Small businesses don’t always have the money or resources to protect themselves against lawsuits. EPLI coverage provides protection for a variety of claims, including negligence, discrimination, unfair termination, and other related issues. This comprehensive coverage ensures that businesses are protected against multiple potential legal threats.

    Peace of mind

    EPLI coverage allows you to operate a business while focusing on the safety and well-being of your employees. While having EPLI coverage doesn’t guarantee a win in a case or lawsuit, it can provide peace of mind when a claim is filed. Knowing that your business can cover legal counsel and other potential legal or court fees allows you to focus on ensuring compliance, creating a safe and respectful work environment, and growing your business.

    Tips For Reducing Employee Claims and Lawsuits

    While it’s impossible to prevent all claims, you can take steps to minimize the risk of EPLI lawsuits and discourage inappropriate workplace behaviors.

    Continuously update your employee handbook.

    Consistently updating your policies is a great way to ensure appropriate employee behavior. Implementing strong anti-harassment and anti-discrimination policies is also incredibly important to provide a respectful workplace. Consistent communication with employees can also help identify any necessary updates.

    Provide training

    By educating employees on proper procedures and best practices, you’re arming them with the knowledge they need to interact with colleagues and within the workplace.

    Run background checks

    Conducting background checks on potential employees not only verifies their qualifications but also helps ensure the safety of your current team.

    GMS & EPLI Coverage

    While understanding and implementing EPLI coverage is a great idea, it can be a complex process. Luckily, working with a professional employer organization (PEO), like Group Management Services (GMS), can make the process easier.

    Alongside our EPLI coverage, we provide additional services that can benefit your business. At GMS, our team will help you create a compliant employee handbook, develop policies for filing and responding to employee lawsuits, and assist in mitigating employment risks. We also offer training on anti-harassment, anti-discrimination, and other essential HR topics for both employees and business owners.

    To learn more about EPLI coverage and how to implement it in your business, download our guide.

  • As a business owner, you know how quickly the year can fly by. One minute you’re setting goals in January, and the next thing you know, Q3 is right around the corner. That’s why the halfway mark is a critical time to hit pause, reflect, and realign through a mid-year business audit.

    Think of it not just as a review, but as an opportunity for growth. A chance to ensure your business is running efficiently, financially healthy, compliant with evolving regulations, and still aligned with the goals you set out to achieve at the start of the year.

    Why a Mid-Year Audit Matters

    Unlike year-end audits, which are often reactive and focused on closing the books, a mid-year audit is proactive. It gives you the time and flexibility to pivot if needed, strengthen weak points, and capitalize on new opportunities, all before it’s too late to make meaningful changes.

    Evaluating Your Progress and Performance

    One of the primary objectives of a mid-year audit is to revisit your strategic plan. Are you on track to meet the benchmarks you set at the start of the year? Are your quarterly key performance indicators (KPIs) moving in the right direction? It’s crucial to assess what’s working, what’s lagging, and what external factors might be influencing performance, such as industry shifts or economic conditions.

    This audit should encompass every department, including sales targets, marketing initiatives, employee engagement metrics, customer satisfaction, and operational efficiency. Instead of waiting until December to determine whether goals were met, you can make mid-course adjustments now to improve your trajectory.

    Financial Review and Tax Planning

    Your business’s financial health is another critical piece of the audit. Mid-year is an ideal time to review your cash flow, expenses, profit margins, and budget adherence. Are you staying within your projected spending? Are your revenues where they should be? Are any departments over or under budget?

    These insights not only aid in better forecasting for the remainder of the year but also play a significant role in tax planning. Reviewing your tax strategy now can help identify deductions, credits, or estimated payments that need adjusting, ultimately reducing surprises when tax season rolls around. Plus, if new tax regulations have gone into effect, you’ll have time to change your practices accordingly.

    Legal Compliance and Risk Management

    Laws and regulations don’t wait until the end of the year to change. Employment laws, wage regulations, Occupational Safety and Health Administration (OSHA) requirements, and local ordinances can shift mid-year, and businesses that aren’t paying attention could fall out of compliance without realizing it.

    A thorough audit should include a review of all compliance-related areas, such as verifying that employee classifications are accurate and up to date. Are wage and hour laws being followed? Are your safety practices up to standard? Are all required labor law postings and records up to date?

    This is also a good time to re-evaluate risk management protocols. From cybersecurity to workplace safety and insurance coverage, understanding where your business may be vulnerable can help you take action before those risks become costly problems.

    HR, Payroll, and Employee Experience

    Mid-year is also a key moment to check in on the employee side of your business. How are your HR policies holding up? Have there been any internal issues, turnover spikes, or questions about benefits raised by your team? Are your employees engaged and aligned with company goals?

    Review your hiring practices, onboarding procedures, paid time off (PTO) policies, and benefits offerings to ensure they align with your company’s values and goals. Take stock of your payroll systems. Are they accurate, efficient, and compliant with all federal and state requirements? A misstep in payroll can lead to financial penalties and employee dissatisfaction, making it an area that should not be overlooked.

    More than just preventing problems, this part of the audit can help you identify opportunities to improve retention, enhance productivity, and support overall team morale. Your people are your biggest asset, and ensuring they’re supported is key to achieving long-term business goals.

    Technology, Data Security, and Process Optimization

    As businesses become increasingly data-driven, technology should also be a key part of your audit. Is your company using tools that provide the insights you need? Can your systems scale with your growth? Are they helping you automate and reduce administrative overhead?

    Equally important is cybersecurity. Even small businesses are frequent targets for cyberattacks, so now is the time to ensure that your data protection protocols are up to date. Review your access controls, password policies, file encryption, and data backup procedures to ensure you’re protected and compliant with privacy laws.

    A strong mid-year audit will also highlight inefficient processes. Whether it’s outdated manual systems, redundant workflows, or communication gaps between teams, optimizing your operations can improve both performance and profitability.

    Internal Communication and Alignment

    Clear communication fuels execution. Take time to assess whether your team is aligned with business objectives. Do employees understand what success looks like for the rest of the year? Have they received the necessary feedback and resources to perform their jobs effectively?

    This check-in provides a natural opportunity to re-engage your team. Sharing mid-year findings, company performance updates, and any strategic changes ensures that everyone is pulling in the same direction—and feels invested in the company’s success.

    How GMS Can Help

    Conducting a mid-year audit can be a complex and time-consuming process, but you don’t have to do it alone. At GMS, we work closely with business owners year-round to help assess operations, reduce administrative burdens, and implement effective growth strategies.

    Here’s how we support businesses through our comprehensive services:

    • HR audits: We evaluate your HR policies, procedures, and compliance status to identify risks and opportunities for improvement.
    • Payroll and tax management: From paycheck processing to tax reporting, we streamline and automate your payroll to ensure accuracy and compliance.
    • Risk management: We help you develop and maintain workplace safety programs and insurance coverage that protect your people and your business.
    • Benefits administration: We assist with evaluating and managing employee benefits programs that attract and retain top talent.
    • Compliance support: Our experts stay up-to-date on employment law and help ensure your business remains legally sound throughout the year.
    • HR software solutions: With GMS Connect, our all-in-one platform, you gain secure access to payroll, benefits, performance data, and reporting tools that help you make smarter, faster decisions.

    At GMS, we help you stay focused on growing your business. Whether you’re looking for help with HR, payroll, risk, or compliance, we’re here to support your success at every stage of the year. Ready to get your business back on track? Contact us today!

  • You work hard to recruit and hire the best employees that you possibly can. It’s only logical that you want to keep these employees engaged, happy, and working well on your team.

    Employee turnover can be an inconvenient, time-intensive challenge. But employee turnover costs even more than time: it costs money.

    Costs of Employee Loss

    According to the Society for Human Resource Management (SHRM) and the Center for Community and Economic Development (CCED), turn-over rates are very costly for organizations.

    The costs of employee turnover are both tangible and intangible. These costs include separation costs and replacement costs.

    Separation Costs

    Separation costs can include:

    • Costs incurred for exit interviews
    • Administrative functions related to separation
    • Separation/severance pay
    • Increases in unemployment compensation
    • Lost productivity
    • Lowering current employee morale
    • Decreased customer service
    • Disruption to the organization’s ability to operate efficiently and effectively
    • Increased over-time or temporary employee costs
    • Loss of workgroup synergy
    • Performance differential (the loss of skills and knowledge between the separated employee and the new hire)

    Replacement Costs

    Replacement costs can include:

    • Attracting applicants
    • Entrance interviews
    • Employment Testing
    • Pre-employment administrative expenses
    • Medical exams, drug testing, background checks
    • Training costs

    SHRM estimates that it costs $3,500.00 to replace one $8.00 per hour employee when all costs were considered. Of course, the higher the wage: the higher the turnover cost.

    ***

    Now you know the cost of employee turnover. Check back next week to learn more about how to prevent turnover by retaining great employees in Part II of this series: Employee Retention: Keeping Top Talent.

  • I got a call last week from a client who has only been with us for a few months. He started back in July of 2012 and just received his first few invoices from the new year. He was pretty upset that his state unemployment tax had gone up substantially compared to November and December. Being in the payroll business for about 20 years, and with this being about the tenth of these calls I’ve taken in January, I knew where this conversation was going to lead.

    The first question I ask is “Did you know about the State Unemployment Tax Authority (SUTA) wage cap?” In Ohio, the employer is only charged SUTA tax on the first $9,000 in earnings for each employee.

    In his case, all of his employees had earned that much by September. Except for his one new hire in October, his employees had already capped out and met the wage limit. In November and December he was only paying tax on one employee. In January, everyone starts from ground zero and is taxed until they reach that $9,000 limit again.

    The second thing we discussed was the number of claims he had back in 2010 and 2011. Yes…those claims stick with you for eternity. It’s like your bank account: once you write that check, the money is gone.

    I reviewed the list of claims from JP, our claims administrator. 2010 was a bad year for our client, as it was for almost everyone, and he had to lay off four employees. Our client told me that he brought them back to work after about eight months. But by then, then the damage was already done. He had just under $20,000 charged to his unemployment account. His unemployment rate went up in 2010 from 3.2% to 7% in 2013.

    Out client also mentioned something that really bothered me. He said that someone filed a claim, but he didn’t have time to fight it, so he let it go through. That was in 2011, and that claim had hit his account for $4000, and was still coming out. Because you only have 21 days to appeal a claim, he was out of luck.

    Now that he’s with GMS, he doesn’t have to worry about this. We take care of managing the claim from start to finish, with a minimal amount of his time.

    Do you know what your rate is? Do you know why it’s 3% or 8%? Do you know what your cost will be in 2013? Have you heard about the proposed federal legislation changed for 2014?

    Check back on our blog for a follow-up post on these topics, and share your thoughts in the comments below.

    “Finding Company Tax ID,” © 2010 Calita Kabir, used under the Creative Commons Attribution-ShareAlike 2.0 Generic license.

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