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  • Human resources is a very important part of any business, but it can take a lot of time and money to properly manage. Even then, there are cashflow hurdles that you may come across simply because you aren’t an HR professional with all of the proper tools of the trade.

    A Professional Employment Organization (PEO) like GMS can get over those hurdles because HR is what we do. We’ve already discussed how a PEO can improve your cashflow through loss prevention, cost containment, payroll, and unemployment claims management strategies, but there’s another major factor as to how we can save you money: economy of scale.

    PEOs make your business stronger through economies of scale.

    Bigger Scale, Bigger Value 

    What the heck do we mean by economy of scale? Economy of scale is the term for the cost advantages that enterprises obtain due to size, output, or scale of operation. In short, GMS can get you lower premiums and tax  burdens because we represent roughly 20,000 workers over 850 different companies.

    That means you can get competitive benefits that attract talented applicants and retain valuable employees, all at a reduced rate. Even if you own a small business, our expertise can help your bottom line because of economy of scale.

    PEOs Are an Extension of Your Business

    You don’t need to own a big business to get big-business treatment. In fact, think of a PEO as an extension of your company – one that helps your bottom line and makes your life simpler, and you never have to fear about losing control of your business. 

    GMS can save you time and money, so get a quote from us today if you think that a PEO is the right move for you.

  • It can be very difficult for small business owners to compete with big companies when it comes to 401(k) plans. Due to their size, large corporations can use economy of scale to their advantage and offer attractive retirement plans that are more affordable due to the size of their employee base. 

    Small business owners don’t have hundreds of employees to their name, but that doesn’t mean that they can’t have access to economies of scale through other resources. 

    How a PEO Can Provide New 401(k) Advantages

    Small business owners are typically subjected to a lot of costs when they manage their own 401(k) plan, which can scare off some employers. The Pew Charitable Trusts conducted a survey with small- and medium-sized businesses that don’t offer a 401(k) to employees and found that 71 percent of these business claimed that the associated expenses played a role in their decision to forgo a retirement plan. 

    Without some help, those costs can quickly add up over time. There can be a lot of set-up fees and other miscellaneous charges to maintain plan documents. Most employers are also not experts of retirement planning, so they also need to hire a Third-Party Administrator to handle their 401(k) plan for them.

    Small businesses aren’t going to match the output of a big corporation. With a Professional Employer Organization like Group Management Services, they don’t have to. Since GMS represents over 1,000 different companies, we can provide companies with the same types of benefits that the large corporations get due to economy of scale. 

    Our Multiple Employer Plan creates a level of buying power that a lot of small businesses never get to have. That power can lead to a more diverse investment menu than they might be able to get on a single employer plan, as well as additional perks. We also handle 401(k) Plan administration in house with the aid of Transamerica, which allows us to cut down on the costs that employers would typically pay a Third-Party Administrator.

    The Multiple Employer Plan also relieves employers of many of the responsibilities attached to providing substantial fiduciary support for their plan. That includes the following:

    • Making sure that contributions get deposited in a timely fashion.
    • Selecting and monitoring the investments offered on the plan. We conduct quarterly meetings with our Financial Advisors to do our due diligence on the funds offered on our platform.
    • Making sure that plan documents are maintained and keeping our clients compliant.
    • Filing one 5500 to the DOL with our clients listed.
    • Offering access to a dedicated financial adviser and educational material. 

    Retirement Guide

    Use Economy of Scale to Your Business’ Advantage

    Economy of scale can help your business save big while providing a retirement plan your employees want. Contact us today to talk to one of our experts about our 401(k) plans for small businesses.

  • Between offering competitive benefits and combating rising premiums, managing your business’ healthcare needs is a complex situation. Group health insurance plays a key part in attracting and retaining top talent. However, selecting and managing the right health plans for your company and employees takes an enormous amount of time and effort. It’s a delicate balancing act that can be difficult for any small business owner.

    Fortunately, you don’t need to go through this balancing act alone. A Professional Employer Organization (PEO) can not only help you offer quality, cost-effective healthcare benefits, but also give you the support necessary to develop benefits strategies and navigate any future changes. Let’s break down seven major reasons why a good PEO is a great choice for your small business’ health insurance.

    Cost savings from a PEO processing a claim for a small business’ health insurance plan. 

    Greater Buying Power

    It’s not easy dealing with health insurance companies directly. Policy administration and billing is not only difficult, but also expensive. For small and mid-sized businesses with fewer employees, you could end up being charged higher premiums because you simply don’t have the buying power of a bigger organization.

    That’s where PEOs can help. A PEO represents multiple organizations and all the employees hired by those groups. As such, PEOs can leverage their collective buying power to act as one large company. This arrangement means that small to mid-size companies working with a PEO can get the competitive benefits and smaller premiums of a big business, all thanks to a convenient partnership.

    Of course, your partnership with a PEO should be about more than just added buying power. You should also consider how the PEOs pool the participants and how it affects your premiums. For example, GMS represents tens of thousands of employees, but it does not pool all those employees together. Instead, GMS built our own plan designs.

    What does this arrangement mean for employers? Essentially, your company is rated for your own group based on your own demographic and your health instead of being grouped in with every other company. This process means that your premiums are dictated by your group’s rating, so you don’t need to settle for a lesser plan to see both short and long-term cost savings. With the right PEO, you can focus on cutting costs, not coverage.

    Ancillary Advantages

    Group health insurance isn’t the only benefit that PEOs can help deliver at competitive pricing. Greater buying power also allows PEOs to offer ancillary options on a mass level. This arrangement is especially advantageous for certain groups where certain ancillary benefits would be cost-prohibitive or even unattainable. 

    For example, imagine you ran a small roofing company. A lot of times, your SIC code serves as the basis for your rate. Because of this, you may not be able to get disability coverage at a reasonable cost through traditional means. However, a PEO’s group buying power can give at-risk employers or small groups cost-effective access to multiple lines of coverage, healthcare, and ancillary benefits.

    Benefits and Payroll Under the Same Roof

    Organizationally, it’s a huge benefit to have healthcare and payroll administration talking to one another through the administrative systems. Non-PEOs typically have a payroll processor or some other system and need someone to manually enter healthcare rates for a new employee or during renewal. When it’s all under one roof, you have one group handling everything instead of needing two different entities to hopefully stay in sync.

    With a PEO, your payroll and healthcare administration have the means to work with one another through the systems and streamline this process. Automatic payroll deductions are set up when your benefits kick in for new hires or at open enrollment. The two systems will also be able to automate paycheck deductions and identify which items should be pre-tax and which shouldn’t.

    By having both payroll and healthcare administration working together, you do more than just streamline the process. This scenario lessens the amount of manual entry required, which frees you or a key employee up for other tasks. Automating the process can also help eliminate potential data error – humans make mistakes, after all. In addition, having payroll and benefits administrators work together allows a PEO to directly resolve any issues for you instead of having you involved in every step of the process.

    Online Enrollment

    Another advantage of having payroll and benefits together is that it allows for online enrollment. The automated system of a PEO can help guide employees during the renewal process and educate them about the products they can elect. Since healthcare and payroll administration is tied together, the online enrollment process allows employees to see exactly how their choices impact them in terms of coverage and pricing. 

    From there, employees can confirm their selections right then and there without ever needing any paper documents. This situation simplifies the process for not only the employees, but also you and any office administrators who would have to deal with the headaches associated with enrollment documents. With a PEO, that’s all generated for the employee to handle and deal with, saving you time and plenty of frustration.

    Audit and Process Claims for You

    Depending on the PEO you choose, these organizations can offer another key benefit: auditing and processing claims for you. While some vendors utilize the fully-insured market and Affordable Care Act plans, this scenario can leave your company at the mercy of the providers. Instead, it’s better to partner with all major insurance providers and provide a better experience for small businesses.

    How can a PEO do this? At GMS, we built our own plan with internal administration to give us more control over that plan and the costs. This arrangement gives us the ability to audit and process all our own claims. In this process, your PEO can make sure that the usual customary rate was charged or fight on your behalf to get a discount or reduction on that claim. 

    The ability to audit claims also opens up opportunities to find other ways to save. Part of the audit is used to analyze how the individuals in your group use your plan. The results of this analysis can indicate certain trends that add avoidable costs – for example, using telemedicine services for free doctor’s calls to avoid copays. Not only will this analysis educate your group on the best, most cost-effective way to utilize the plan, it will also help you save in the long run.

    Free Administration

    If you were to turn to an accountant or lawyer with compliance, legal, or administration questions, that extra time will typically cost you. That’s a very unfortunate arrangement for a business owner. Rules and regulations change every day, so it’s only natural to have some inquiries about how they can impact your business. You also can’t be expected to know everything about healthcare and payroll administration – that’s why people train specifically for those fields. 

    With most PEOs, the time spent answering those questions is covered as part of your main fees. Not only that, but you’ll also have a team of experts on hand to answer whatever questions pop up about healthcare, payroll, or other administrative needs. You get the answers you need, without the fear of having those questions affect your bottom line.

    Ability to Lighten Other Administrative Burdens

    When you run a business, there are a multitude of administrative burdens that rest on your shoulders. A PEO is a tremendous solution for companies that don’t have the time or expertise to effectively manage more than group health insurance.

    While you can turn to a PEO for just health insurance and payroll, an organization like GMS can help you easily take additional administrative burdens off your shoulders when you’re ready. This gives you the ability to have one team expertly run risk management, employee recruiting, and other key HR functions as your company grows.

    Ready to simplify your business’ administrative needs? Contact GMS today to talk to our experts about small business health insurance today.

  • As a small business owner, you’re always trying to find new ways to make your business simpler, safer, and stronger. Co-employment is one way that employers can not only accomplish these goals, but also save time by leaving HR tasks to the experts.

    A co-employment relationship with a Professional Employer Organization (PEO) allows small business owners to outsource key HR functions like payroll and employee benefits. While co-employment can help employers free up their responsibilities, it’s not always clear exactly how this relationship impacts a business. Let’s break down what co-employment means and why it may make sense for your organization.

    What is Co-Employment?

    The term co-employment refers to the relationship between your company, your employees, and your PEO of choice. The National Association of Professional Employer Organizations (NAPEO) offers a good co-employment definition to describe this affiliation: “The PEO relationship involves a contractual allocation and sharing of certain employer responsibilities between the PEO and the client, as delineated in a contract typically called a client service agreement (CSA).”

    In short, businesses partner with PEOs to split up employer responsibilities between the two. This agreement extends far beyond simply helping out the business with HR decisions – a co-employment agreement means that your employees are technically employed by both your company and the PEO. 

    While both you and your PEO employ your workers, you still remain in command. Some people avoid co-employment because of misconceptions that you’ll lose control of your business. That’s simply not true. You get to set the co-employment arrangements in your CSA. While your PEO may be viewed by the state as the employer of record, you have the final call when it comes to critical business decisions. 

    Reasons Why Businesses Choose Co-Employment

    As we said before, the co-employment relationship opens businesses up to a variety of benefits. The main reason for sharing employer status is that it opens your business up to tools and HR services that you wouldn’t have access to as a small company. Here are five big ways that co-employment adds value to your business.

    Greater buying power for benefits

    As a small business, you simply don’t have the same buying power that big companies enjoy. Co-employment helps you level the playing field.

    The co-employment relationship allows your business to take advantage of economies of scale. PEOs can leverage the collective buying power of all their group health clients. This large employee base means that your PEO can give you a lot more bang for your buck when purchasing quality group health plans on your behalf. 

    Co-employment doesn’t necessarily mean that your business’ group is pooled together with all the employees from other companies. Some PEOs build their own plan designs to keep your group separate from the others. That means your company is rated for your own group and you won’t have to settle for less. In turn, you can focus on getting quality, cost-effective plans that are competitive with bigger companies.

    Simpler, less time-consuming payroll

    In a co-employment relationship, your PEO takes on the responsibility of paying your employees. Every business needs to apply for an Employer Identification Number (EIN) in order to manage their own payroll. Companies in a co-employment relationship agree to have the PEO assume this responsibility under its own EIN.

    Changing out the EIN may not sound all that exciting, but it allows you to offload a lot of complicated, time-consuming tasks off your plate. By allowing the PEO to use its own EIN, that PEO is now responsible for more than just passing out paychecks. These other payroll administrative tasks include:

    That’s a whole lot of time (and math) that’s no longer your main responsibility. The other benefits of having your PEO handle these tasks is that it can help ensure that all your calculations and filings are both accurate and compliant with payroll guidelines. With a PEO, you know your payroll is being handled by people who were trained to handle these tasks.

    Better risk management and workers’ compensation practices

    Another way that businesses can benefit from a co-employment relationship is through improved workplace safety and risk management. A PEO can help your company qualify for workers’ compensation discounts and keep unemployment tax rates down, saving you plenty of money and headaches in the future. 

    As a co-employer, a PEO may even be able to assume the financial risk of providing workers’ compensation benefits to employees for you. For example, GMS is self-insured in the state of Ohio and can offer potential discounts that still comply with state regulations.

    Even outside of monopolistic states, a PEO can help you through means like safety culture and claims management. These processes not only help you create a safer environment for your employees, they also help you save money on workers’ compensation costs. Risk management measures include:

    • Safety training
    • Risk assessments
    • Timely reporting
    • Post-accident investigations
    • Return-to-work programs

    Better business alignment

    When you enter a co-employment agreement, your PEO acts as more than just a vendor. This relationship means that your PEO is a true partner that is invested in the growth of your company. In turn, a good PEO should do everything it can to drive good, sustainable growth for your business. 

    As your company grows, you may need more than just payroll administration or benefits help. The co-employment relationship gives PEOs more reason to care about your business goals and work with you to find ways to grow. A PEO can help you identify ways that you can enable that growth and retain talented employees, including: 

    • Employee recruiting and training
    • Performance management
    • Unemployment claims
    • Human resource audits
    • Wellness programs
    • Telemedicine

    In addition to helping you grow when you need to, being co-employed by a PEO also means you have access to experts when you need them. This breadth of resources can help you stay on top of any trends or regulatory changes that can impact your business.

    Find the Right Co-Employment Partner for Your Business

    Running a small business is no simple task. Small business owners have to maintain a delicate balance between trying to grow their business and manage a litany of critical HR responsibilities. Co-employment gives them the means to delegate those time-consuming tasks to professionals who are invested in the success of your business.

    Ready to make your business simpler, safer, and stronger? Contact GMS today about how we can save you plenty of time and headaches through a mutually beneficial co-employment relationship.