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  • Employees are at the heart of every business. From managers to entry-level staff, they are the key to long-term success, so ensuring you have a satisfied, dedicated, and productive team is critical. For small businesses, everyone on your team is integral to the workflow, and the failure of a single employee can have a more significant impact than larger organizations. Because of this, it may be tempting to fire employees who are underperforming and start fresh, but that’s not always the best solution. Taking the time to implement employee management strategies can be the answer to turning a situation around.

    Employee management is not just about reacting to underperformance or issues. It is a proactive approach that shapes the performance and potential of your workforce. It’s more than just ensuring that people are doing their jobs; it’s a range of procedures and strategies that enable you to measure, monitor, and engage with your team, all of which are crucial to your company’s success.

    How Does Employee Management Work?

    Employee management involves a strategic approach to overseeing your organization’s workforce to ensure effective and efficient functioning. It should play a role in every part of the employee lifecycle, starting with employee recruiting and training to guarantee that suitable candidates are properly vetted and onboarded. This involves adopting a few crucial tactics to allow your employees to realize their full potential.

    Support open communication

    Teams that can effectively communicate are 25% more productive than those that cannot. Communication significantly impacts team morale, retention, and recruitment. When communication breaks down, it can exacerbate other issues, leading to more significant problems over time.

    Of course, good communication is more than just talk. It’s essential to set up processes that give employees a voice and allow you better means to listen to their thoughts, suggestions, and complaints. These include:

    • Being visible: Ensure your employees see you around the workplace and know you’re available to talk with them if they need anything. If your team is virtual or hybrid, it’s worth establishing a set time when your team knows you’re free to chat. In addition, you might take the extra step of regularly checking in with your team without them initiating the conversation.
    • Being transparent: Share company information with your employees. Sharing overall objectives, status of projects, and other relevant information will help your team feel included.
    • Being open to criticism: Ensure a proper grievance policy is in place so employees know how and with whom to share any issues they face. This feedback mechanism can help identify potential problems that may negatively impact employees. In addition, addressing these issues whenever possible is crucial. Acting on employee feedback can increase trust in the workplace by 75%, which in turn helps with morale.

    Fostering a culture that values open communication and establishes clear policies and channels for staff communication can mitigate many long-term issues. Beyond these practices, there are more strategies you can implement to help boost engagement and productivity, including:

    Employee development

    Training and development are critical components of effective employee management. Orientation programs help new employees understand the company culture, policies, and roles, ensuring smooth integration into your team.

    Additionally, career development opportunities provide pathways for professional growth and advancement, motivating employees to perform better and remain committed to your organization. Investing in training and development can build a skilled, knowledgeable, and motivated workforce that drives long-term success.

    Build trust

    Individuals in low-trust companies are, on average, 74% more stressed than their peers in high-trust companies. High-stress environments can damage morale and productivity, increase absenteeism, and lead to employee disengagement. Once the downward spiral begins, this harm to your company culture can be challenging to recover from.

    One way to help build trust with your employees is by avoiding micromanagement. Give them enough space to work independently and step in when they need help or to check in on progress. By giving them a level of independence within reason, you can build confidence that can help motivate your employees.

    How Much Does Employee Management Matter?

    Without careful attention to employee management, your team can become disengaged and disconnected, leading to significant costs over time. Poor performers, on average, cost companies 30% of their annual salary; their mistakes, absenteeism, and negative attitudes can permeate your company culture, affecting overall employee well-being. This not only diminishes overall productivity, but neglecting these aspects can result in a cascading effect, where the burden of compensating for underperformers falls on the shoulders of your top talent. This can lead to burnout or discontent, eventually affecting your recruitment and retention.

    Knowing when to terminate the employment of a poor-performing staff member can be difficult but is often necessary. To protect your business from legal issues, you can place poor performers on professional improvement plans (PIPs). These plans should detail specific steps, set clear goals, and outline how you’ll evaluate progress. If a poor performer cannot address the areas you’ve identified, you can proceed with termination, confident that you’ve done everything possible as an employer to facilitate improvement.

    While there are instances where immediate termination is required, it’s still essential to have a clear plan in place. It’s important to have a fair and transparent process for all employees, ensuring that decisions are well-documented and justified.

    Overall, empowering employees to do their best and weeding out those who don’t show any potential for improvement can make your business more effective and save you from ongoing costs caused by poor performance.

    Focus On Employee Management

    Employee management is not just a one-person job. It involves many parts requiring plenty of time and effort, such as performance reviews, a grievance policy, and more. Fortunately, you don’t have to work on employee management alone. A professional employer organization (PEO), like GMS, can take on some of the administrative burden required to improve employee performance and other essential HR functions. Contact us today to talk to one of our experts about how we can help you manage your employees.

  • After a great year, giving back to your employees can be very beneficial for your business. Indeed states, “employees with incomes directly proportional to the organization’s profit generally become more invested in its future success and stay with the company longer.” A profit-sharing plan is one way to use your business’ financial success to benefit you and your employees.

    How Profit Sharing Works

    Profit sharing and 401(k) plans go hand in hand. When you offer your employees a 401(k) plan, you can choose to include a profit-sharing provision. These provisions are typically discretionary, giving you the flexibility to decide whether to contribute to your employees’ profit sharing at the end of the fiscal year.

    If you have a particularly good year, you can use some of that profit to make contributions to your employees. These contributions only take place after the end of a year so that you have the annual figures to determine what people made and the overall profitability of your business.

    Despite its name, profit sharing is not based on the profitability of a company. A profit-sharing plan allows you to take excess money after the end of a fiscal year and distribute it to employees’ retirement plans. These contributions typically come as set percentages applied to each employee’s salary.

    It’s important to note that these payments are not cash bonuses. Profit-sharing payments are deposited to employees’ individual 401(k) accounts as a separate line item from employee contributions. If an employee doesn’t participate in a 401(k) but is eligible to receive profit sharing, an account is automatically created for that employee.

    Another key aspect of a profit-sharing plan is that contributions are made to all eligible employees. You determine these eligibility requirements when you set up the plan. This could mean immediate eligibility for everyone from day one, or you might set a waiting period of up to one year.

    Types of Profit-Sharing Plans

    There are several types of profit-sharing plans, including:

    • Traditional profit-sharing plans: The entire company receives a part of the profit share equal to a set percentage of their salary. For example, at a 2% rate, an employee earning $100,000 per year would earn $2,000 and an employee earning $50,000 per year would receive $1,000. Typical rates vary from 1-5%.
    • New comparability profit sharing: This plan allows companies to divide employees into separate groups and allocate contributions differently to each group. It often benefits key employees, full-time employees, or higher-paid employees while still rewarding your entire team. Working with an expert is important to ensure employee groups are not facing discrimination under this plan.
    • Age-weighted profit sharing: In this plan, age and salary determine the contribution amount, favoring older employees who are closer to retirement. The idea behind age-weighted sharing is that older employees have less time to save and, therefore, need to receive more. Again, an expert should evaluate this plan to ensure age discrimination is not present in your business.

    How Profit Sharing Benefits Business Owners

    There are several good reasons to consider making a profit-sharing contribution after a successful year. One major advantage is that profit-sharing contributions aren’t considered payroll items. If you’ve had a fantastic year and want to reward your employees while saving on taxes, profit sharing allows you to contribute without paying payroll taxes. This means you won’t have to pay into Social Security or Medicare, maximizing your contribution’s value and reducing your tax burden. Additionally, you can also claim a tax write-off on these contributions, further enhancing your savings.

    Because profit sharing is linked to company profitability, it contributes to your business’s financial stability. Unlike a fixed bonus, you aren’t required to provide a standard amount each year and can instead offer variable amounts based on what your business can afford.

    Another advantage of profit sharing is that it’s an attractive tool to recruit and retain employees. In an increasingly competitive workplace, it’s an extra bonus that makes your business appealing to potential team members. For existing employees, it links their performance to the success of your business, which boosts morale and motivation to remain with the company for longer periods of time.

    Profit sharing is another way to reward employees after a successful year by contributing additional funds toward their retirement. You can also attach a vesting schedule to that profit-sharing contribution to incentivize employees to stay with your company.

    For example, you could place a six-year vesting schedule for profit-sharing contributions. Employees receiving those funds must be at your company for six years to keep all of the money. Employees who leave after two years are only partially vested in that contribution. This gives your employees an added incentive to stay at your company.

    How To Invest In A Profit-Sharing Plan

    Like a 401(k), there are certain rules and regulations that you must abide by when managing a profit-sharing plan. A professional employer organization (PEO) like GMS can help you manage the legal responsibilities associated with these benefits as well as determine what allocation models you can choose. Contact GMS today to talk to one of our experts about 401(k) and profit sharing.

  • What Is Telemedicine And How Does It Work? 

    Telemedicine is the practice of delivering health care services remotely using digital communication tools such as video calls, secure messaging, and mobile health apps. It allows patients to consult with doctors, receive diagnoses, and even get prescriptions without visiting a health care facility in person. 

    During flu season, telemedicine becomes especially valuable, enabling individuals to seek medical attention from the comfort of their homes. Patients can schedule virtual appointments, discuss symptoms with a doctor in real time, and receive treatment recommendations without risking exposure to other contagious individuals in waiting rooms. Some telehealth platforms also provide remote monitoring, allowing doctors to track symptoms and recovery progress for high-risk patients. 

    The Growing Adoption Of Telemedicine In The Workplace 

    Due to its cost-effectiveness and efficiency, a growing number of employers are incorporating telemedicine into their health benefits packages. According to a 2024 report, 78% of employers now offer telemedicine services, recognizing its role in reducing absenteeism, improving employee well-being, and cutting health care costs. 

    Offering telemedicine is not just about convenience but also a strategic investment for businesses. Traditional in-person health care visits often involve significant expenses, including insurance claims, lost productivity, and emergency room visits for non-emergency issues. Telemedicine provides a cost-effective alternative, reducing unnecessary ER visits and allowing employees to receive timely medical care without disrupting their work schedules. 

    Benefits Of Telemedicine For Employers 

    Reduced absenteeism and improved productivity 

    One of the biggest challenges during flu season is the rapid spread of illness in the workplace. Employees who come to work while sick can infect others, leading to a cycle of absences. Telemedicine helps mitigate this issue by enabling early intervention. Employees can seek treatment at the first signs of illness and recover at home rather than exposing their colleagues. 

    Additionally, employees who use telemedicine services don’t have to take half-days or full days off work just to see a doctor. Virtual consultations are typically shorter and can be scheduled before or after work hours, minimizing disruptions to daily operations. 

    Lower health care costs 

    Telemedicine is significantly more affordable than traditional in-person visits. A virtual consultation costs an average of $40 to $50, compared to an in-office visit, which can range from $100 to $200 or more. Employers who integrate telemedicine into their health care plans can reduce insurance claims and overall health care expenses. 

    Competitive employee benefits 

    With labor shortages and increased competition for top talent, offering telemedicine as part of an employee benefits package can improve job satisfaction and retention. Employees appreciate having convenient, on-demand access to health care, making them more likely to stay with an employer that prioritizes their well-being. 

    Benefits Of Telemedicine For Employees 

    Convenience and accessibility 

    One of the most significant advantages of telemedicine for employees is the ability to receive medical care without leaving home. This is especially beneficial for those in remote areas, individuals with mobility issues, or employees with demanding work schedules. 

    Reduced exposure to contagious illnesses 

    Flu season poses a heightened risk for individuals with weakened immune systems, chronic illnesses, or caregiving responsibilities. Telemedicine eliminates the need for in-person visits to crowded doctor’s offices, lowering the risk of exposure to other contagious patients. 

    Faster access to care 

    Telemedicine appointments are often available within minutes or hours, whereas scheduling an in-person doctor’s visit can take days or weeks. This immediate access to health care ensures that employees receive timely treatment, reducing the severity and duration of illnesses. 

    Why Investing In Telemedicine This Flu Season Is A Smart Move 

    Flu season can significantly impact businesses financially and operationally. According to the Centers for Disease Control and Prevention (CDC), the flu costs U.S. employers $11.2 billion annually in lost productivity due to employee illness. Implementing telemedicine helps businesses minimize these losses by keeping employees healthier, reducing workplace outbreaks, and providing easy access to treatment. 

    Moreover, telemedicine aligns with broader workplace wellness initiatives, demonstrating a company’s commitment to employee health. As health care continues to evolve, businesses that adopt telemedicine will be better positioned to support their workforce while effectively managing costs. 

    Telemedicine is no longer a luxury; it’s a necessity, especially during flu season. It offers a win-win solution for employers and employees by reducing health care costs, minimizing absenteeism, and providing convenient access to medical care. As more businesses integrate telehealth into their benefits packages, they not only safeguard their workforce but also position themselves as forward-thinking, employee-focused organizations. Contact Group Management Services (GMS) to add telemedicine to your health plan and keep your employees healthy and productive. 

  • There’s more to payroll than calculating wages and submitting paystubs. Payroll management is a detailed process that requires business owners to properly compensate employees for services performed, which includes calculating employee hours, distributing pay, withholding taxes, and keeping detailed financial records. As a business owner, this can be a lot to tackle. Luckily, there are trusted companies that can provide payroll services to business owners just like you. 

    Because payroll can be an overwhelming process, we’re here to guide you on how to manage your payroll process effectively. Continue reading to learn how to set up your payroll, how to manage your payroll, and what you need to document and file. 

    Setting Up Your Payroll 

    Before you can begin running payroll, you need to set up your payroll system. The first step involves registering for an Employer Identification Number (EIN). 

    1. Apply for an employer identification number

    An employer identification number is a unique nine-digit number the Internal Revenue Service (IRS) assigns to identify each business. EINs are also used for filing tax returns, submitting payroll, and providing identity protection for your company. You can obtain an EIN for free on the IRS website. Additionally, depending on local and state government regulations, you may need a state ID number to pay state income taxes. Learn more about your state’s registration requirements here. 

    2. Collect employee information

    To properly pay your employees, you need to collect the necessary information. Employers must obtain each employee’s full name, address, Social Security number, and tax withholding forms. Each employee must also fill out the following government documents: 

    • Form I-9: Employee Eligibility Verification 
    • Form W-4: Employee’s Withholding Certificate 
    • State withholding allowance certificates 
      • In most states, you’re required to withhold state taxes, as well as federal income taxes, from employee wages. Therefore, your employees must complete the IRS Form W-4 or a state withholding certificate.  

    3. Determine a payroll schedule

    After collecting the necessary business documentation and employee information, it’s time to choose a payroll schedule. A payroll schedule is the length of your pay period and determines how often you pay your employees. The most common pay schedules are weekly, bi-weekly, or monthly.  

    It’s important to note that your pay schedule should meet state regulations and fit your employees’ needs. For example, a payroll schedule may differ for a business that employs all salaried workers compared to a company that employs mostly hourly employees. 

    Payroll Management 

    Once you’ve obtained your EIN, the necessary employee information, and selected your payroll schedule, it’s time to run your first payroll. We’ve listed a brief overview of how to get started running your first payroll: 

    1. Calculate gross and net pay

    To calculate gross pay, you must add up the hours worked by an employee during the predetermined pay period; make sure to include bonuses or overtime pay. The total hours worked is then multiplied by each worker’s pay rate to determine the gross pay. Employers often use timesheets, punch clocks, spreadsheets, or timekeeping software to make time tracking easier. 

    After calculating gross pay, it’s time to make your pre-tax deductions. If you offer your employees benefits such as a 401(k) retirement plan, health benefits, or life insurance, then you’ll need to withhold those contributions. Next, you must deduct Federal Insurance Contribution Act (FICA) taxes, which include federal and state income tax, Social Security taxes, and Medicare taxes. Then, you must subtract the post-tax deductions, which may include court-ordered wage garnishments or union dues. 

    When all pre-tax and post-tax deductions are subtracted from the gross pay, your final number is your employee’s net pay or the amount your employee takes home. 

    2. Pay employees and deduct withholdings

    After making your payroll calculations, you’re ready to generate paychecks and initiate direct deposits. Payroll taxes must be filed with the government regularly and vary based on local regulations, business size, and location. You may be liable to pay the IRS if you fail to withhold the employee portion of employment taxes. 

    Filing And Documentation 

    While calculating payroll and tax deductions are an important part of processing payroll, you also must file these deductions with various agencies, including the federal government.  These tax reports include: 

    • Form 941 – Employer’s Quarterly Federal Tax Return 
      • Employers use this form to report income taxes, Social Security taxes, and Medicare taxes withheld from employee paychecks. 
    • Form 940 – Employer’s Annual Federal Unemployment (FUTA) Tax Return 
      • Only employers pay FUTA taxes – DO NOT deduct FUTA tax from employee wages. 

    After filing these reports, you must document and store these records. Filed records should include tax filings, pay stubs, and employee information such as address, occupation, birth date, and more. Business owners must keep all payroll records and documentation for at least three years. Failure to do so may result in costly penalties or non-compliance fees. Businesses that violate Fair Labor Standards Act (FLSA) requirements, such as minimum wage, overtime pay, or record-keeping, may be fined up to $1,000 per violation. Keeping payroll records is also useful when you send your annual report to the IRS and can provide evidence if there is ever an employee compensation dispute or audit. These fees can quickly add up and take their toll on your bottom line. 

    Choosing Your Payroll Process 

    It’s important to note that there’s more than one way to process your payroll. The best option for your company may depend upon your industry, budget, the type of workers you have, or the amount of time you have. There are three main options to choose from: 

    1. Manual payroll

    Manually processing payroll is the most inexpensive way to process it. Despite the fact that manually processing payroll is less expensive than software or outsourcing, you, as a business owner, will be liable for any mistakes made. If you’re like most business owners who don’t have extensive payroll training, manually managing payroll can leave you vulnerable to costly errors and IRS penalties.  

    2. Payroll software

    Investing in payroll software allows you to streamline your payroll process by managing tasks online, automating payroll calculations, and more. While software can save time and simplify the overall process, you will still need to oversee payroll compliance and management. 

    3. Outsourcing payroll

    Although outsourcing payroll services is more expensive, it can save you time and potentially reduce compliance issues. When you outsource payroll administration to an outside company, such as a professional employer organization (PEO), you have access to payroll experts who take care of every function of payroll management, such as recordkeeping, handling payroll taxes, and processing paychecks. While a PEO streamlines these processes, you will still retain full control and direction over your employees. 

    GMS: A Trusted Payroll Partner 

    Whether you’re a payroll expert or not, the payroll process can be tedious. It can also be time-consuming to manually calculate paychecks or stay up to date on payroll regulations and important filing dates. Luckily, Group Management Services (GMS), a PEO, can take the burden of payroll off your shoulders.  

    With GMS’ state-of-the-art payroll technology and dedicated Payroll Specialists, you can spend less time worrying about overtime calculations and tax deductions and more time focusing on growing your business. As a PEO with strong data security, quality customer service, and accurate processing technology, GMS can be the trusted partner that decreases your workload, lowers liability, and ensures compliance.  

    Contact GMS today to simplify your payroll process!