2025 W-2 Forms are now available in your GMS Connect employee portal here.

Request a call Login

  • Hiring the right person is a crucial step toward building a successful team. However, hiring the wrong candidate, what we call a “bad hire,” can be costly, both financially and culturally. A poor hiring decision can impact morale, productivity, and even your company’s bottom line.

    Let’s explore the real cost of a bad hire and what effective strategies you can utilize to minimize the risk.

    What Does A Bad Hire Cost?

    The financial impact of a bad hire is more significant than you might think. Research shows that the average cost of a bad hire is about 30% of the employee’s first-year earnings, a figure that can rise depending on the role’s seniority and the onboarding resources involved. CareerBuilder’s data found that a single bad hire can cost a business around $17,000, while higher-level hires can cost even more.

    Hidden Costs Of A Bad Hire

    A bad hire can create additional costs beyond direct financial impact. These hidden costs include:

    • Decreased team morale: Working with a disengaged or underperforming colleague can reduce team morale and lead to dissatisfaction among other employees.
    • Lost productivity: Time and resources spent on correcting mistakes or managing performance issues can pull focus away from core business objectives.
    • Reputational damage: Customer-facing errors or delays due to a poor hire can damage the company’s reputation, impacting customer retention.

    How To Avoid The Cost Of A Bad Hire

    Understanding the high stakes, companies need a clear strategy to mitigate hiring risks. Here are several best practices to improve hiring success rates:

    1. Clearly define role requirements

    Clearly defining job expectations and qualifications is essential. Vague job descriptions often lead to a mismatch between candidate skills and role requirements. A well-defined job description should differentiate between “prerequisite” skills (those the candidate must have) and “trainable” skills (those that can be developed on the job).

    1. Implement objective assessment tools

    Reducing subjectivity in hiring decisions can help avoid costly mistakes. Objective assessment tools, including AI and machine learning, allow companies to evaluate candidates based on data-driven insights rather than gut feelings. This approach not only increases accuracy but also helps eliminate unconscious bias from the hiring process.

    1. Conduct thorough reference checks

    Reference checks are essential to verify the candidate’s work history, skills, and cultural fit. Speaking with past employers provides valuable insights that may not come up in interviews, helping to avoid last-minute surprises.

    1. Focus on objective interview techniques

    Rather than relying on open-ended questions that may yield little insight, tailor your interview questions to require candidates to demonstrate essential skills. For instance, “What experience do you have with [specific skill]?” is more effective than broad questions about handling workplace challenges. Keeping interviews skill-focused helps identify candidates who meet the role’s technical requirements.

    1. Prioritize cultural fit in a measurable way

    While cultural fit is essential, it’s equally important to define what that means within your organization. Break down qualities like “team player” or “cultural fit” into specific, measurable traits. This clarity helps prevent misunderstandings about what you’re seeking in a candidate and allows you to evaluate them objectively.

    1. Don’t rush the hiring process

    While urgent hiring needs can make it tempting to fill a role quickly, a rushed process often leads to mistakes. By taking the time to vet candidates properly, you can avoid repeating the process when a hasty hire doesn’t work out. Remember, a poor hire is costly, so it’s worth investing in a thoughtful and deliberate selection process.

    1. Utilize professional employer organizations (PEOs) for hiring support

    A trusted PEO can help you streamline the hiring process by managing essential functions like job postings, candidate screenings, and background checks. This support allows your team to focus on core responsibilities while the PEO’s expertise ensures you’re connected with high-quality candidates.

    Handling A Bad Hire

    Despite best efforts, sometimes a bad hire still happens. In such cases, it’s essential to act quickly and strategically. First, identify the issue, whether it’s performance, attitude, or cultural fit, and address it directly with the employee. Implement a performance improvement plan, if applicable, or adjust the employee’s role to better align with their strengths. For more insights, explore our comprehensive guide to simplifying performance management.

    If the employee still isn’t improving, it may be necessary to terminate the employment. Make sure to follow legal guidelines to avoid wrongful termination claims. Many companies implement a probationary period to evaluate an employee’s fit before committing to long-term employment. This period allows you to ensure new hires align with your organization’s goals and standards.

    Partner With GMS To Reduce Hiring Risks

    Hiring is both an art and a science, and the consequences of a bad hire are too costly to ignore. At Group Management Services (GMS), we specialize in helping businesses strengthen their hiring practices to attract and retain the right talent. From writing accurate job descriptions to conducting comprehensive screenings, our services allow you to avoid the pitfalls of bad hiring decisions.

    Contact GMS today to learn how our experts can support your business in recruiting effectively and efficiently.

     

  • Rising health care costs make it difficult for small and midsize businesses to offer competitive benefits, but partnering with a Professional Employer Organization (PEO) can help. This article explains how GMS uses collective buying power to secure better group health coverage at lower premiums while providing diverse insurance options and expert compliance support. By working with a PEO, businesses can reduce costs, streamline benefits administration, and give employees access to high-quality health plans.

    As a business owner, offering excellent health care benefits is key to attracting and retaining top talent. However, the rising costs of health care premiums can make it challenging to find a group health plan that balances quality with affordability. In 2024, this challenge is more significant than ever as health care costs continue to rise.

    This is where partnering with a professional employer organization (PEO) like Group Management Services (GMS) can make a substantial difference. By leveraging the collective power of a PEO, your business can access premier group health insurance coverage without breaking the bank. Let’s explore how GMS can help you secure better group health coverage for your employees.

    Enhanced Buying Power And Cost Efficiency

    A PEO provides your business with the buying power typically reserved for large corporations. GMS represents more than 50,000 employees, enabling us to help small businesses purchase group health insurance at an average of 24% lower employee premiums and 15% lower family premiums compared to the U.S. average.

    GMS combines the collective strength of all its clients, allowing small to midsize businesses to gain access to the same competitive premiums as large companies. This means your business can benefit from lower health insurance premiums while still offering comprehensive coverage to your employees. With health care costs rising, this buying power is more valuable than ever, allowing you to provide top-tier benefits without sacrificing your bottom line.

    Diverse Group Health Coverage Options

    One of the biggest advantages of partnering with GMS is the ability to offer your employees a wide range of group health coverage options. Contrary to what some might believe, lower premiums through a PEO do not mean compromising on the quality of the health plans available to your employees. GMS partners with many major insurance carriers to provide various options tailored to meet the diverse needs of your workforce. These options include:

    • Medical insurance
    • Dental insurance
    • Vision insurance
    • Group life insurance
    • Short-term and long-term disability
    • Flexible spending account (FSA)
    • Health savings account (HSA)
    • Employee assistance program (EAP)
    • 401(k) plan
    • Telemedicine
    • Accidental death and dismemberment (AD&D)

    These options allow you to customize a benefits package that meets your employees’ needs, helping you stand out as an employer of choice in a competitive job market.

    Streamlined Administration And Compliance

    Managing group health insurance can be complex and time-consuming, especially with the ever-changing landscape of health care regulations. GMS not only helps you access better group health coverage but also takes on the administrative burden. This includes managing enrollments, handling claims, staying on top of Affordable Care Act (ACA) regulations, and ensuring compliance with federal and state regulations.

    You gain access to a team of experts who can train your employees on how your plan works and answer difficult health plan questions. With GMS, you can focus on growing your business while we manage the intricacies of your employee benefits program.

    Lower Your Group Health Care Premiums With GMS

    In today’s economic environment, maximizing every dollar spent on employee benefits is crucial. By partnering with GMS, you can offer high-quality health care benefits at the reduced premiums typically enjoyed by larger businesses. This partnership not only improves the health and satisfaction of your employees but also enhances your company’s financial health.

    By leveraging our collective buying power, diverse coverage options, and comprehensive administrative support, you can significantly lower your group health care premiums while providing your employees with top-tier benefits. Contact GMS today to speak with one of our health care experts and learn more about how partnering with a PEO can benefit your business.

  • Safety management is something all business owners must consider. Ensuring your team’s health and safety is a top priority and a legal obligation. Compliance with OSHA regulations is essential; ignoring them can lead to serious consequences. However, achieving and maintaining compliance can be challenging, especially if you aren’t around to supervise 24/7.

    Building a culture that values safety is a proactive way to help ensure compliance. When safety is ingrained in your company’s culture, employees are more likely to adhere to safety protocols, even in your absence. This cultural shift makes compliance more manageable and less reliant on constant supervision.

    Moreover, a strong safety culture is a strategic initiative that can significantly boost your company’s recruitment and retention efforts. Prospective employees are attracted to workplaces that prioritize their well-being, and current employees are more likely to stay with a company that demonstrates a genuine concern for their safety.

    Safety Management For Compliance’s Sake Doesn’t Work

    Managing safety for compliance can often lead to a reactive approach that uses rules and discipline to gain compliance from your workforce. This type of communication, which can feel more like policing than genuine concern, not only undermines your compliance efforts in the long term but also results in a disengaged and disillusioned workforce, which is detrimental to your organization’s overall productivity and morale.

    If your approach to safety is merely to check a box, ensuring safety compliance when you’re not around will be a continuous struggle. You’ll likely find yourself incessantly harping on your employees to wear their provided personal protective equipment (PPE) or complete their tasks as they were trained. While this might be effective while you are present, your goal should be to create a culture where you don’t need to micromanage your team to remain compliant.

    Moreover, your team is adept at detecting inauthenticity. Employees crave to feel valued and supported by their leaders. If your safety policies lack sincerity, employees will likely notice, which can harm your workplace culture, making employees feel undervalued and disrespected by management.

    Develop A Culture Of Safety Management

    Shifting from micromanaging safety compliance to building a culture that values safety is a necessary and rewarding step. One way to do this is to inform your workforce of the ‘why’ behind your safety directives and ensure your leadership team fully supports and believes in this ‘why.’ This helps foster a shared sense of responsibility and empowerment among your team.

    Leadership plays a crucial role in promoting a culture of safety and compliance. If your message is clear and, more importantly, from the heart, then culture can spread like wildfire throughout the ranks of your organization. Let your workforce know you enforce safety policies because you care about their health and well-being. Communicate your dedication to creating a safe environment so they can go home in the same health they arrived in. 

    Engage Employees Throughout Safety Development

    Coach your team rather than boss them around. Including your staff in conversations and asking them how they can safely achieve tasks will encourage a collaborative environment. This improves safety and fosters a sense of community and teamwork. Employees are more likely to feel valued and respected when they are part of the process, which can significantly boost morale.

    In addition, peer training from model employees can have a positive effect. Safety initiatives may seem less authoritarian when coming from a coworker, and this approach can help foster stronger camaraderie and a sense of belonging. Employees often relate better to their peers, making the training more effective. This sense of belonging can also enhance retention as employees feel more connected to their team and the company.

    Beyond training, using positive reinforcement and showing appreciation toward employees who follow safety protocols is crucial. Recognition and rewards, no matter how small, can significantly impact motivation. We all want and need that pat on the back, and we are driven by being noticed or rewarded for our efforts. By recognizing and celebrating these behaviors, you reinforce the importance of safety and encourage others to follow suit.

    Safety Management With GMS

    Fostering a safe and compliant culture can be difficult and time-consuming. Regulations are subject to change, so even if your employees maintained a compliant work environment, an unnoticed regulatory change could open your business to penalties.

    Partnering with a professional employer organization (PEO) like GMS can help alleviate these concerns. GMS has a team of experts who stay updated on your industry’s latest laws and regulations, ensuring your business remains compliant and avoids potential pitfalls associated with regulatory changes. 

    As a business owner, you have many responsibilities to juggle. Let GMS take compliance off your plate, allowing you to focus on other critical aspects of your business. GMS not only helps with compliance but also aids in developing a culture of safety through employee training and risk management services. Contact us today to learn more!

  • QuickBooks software remains one of the most widely used accounting applications for small and midsize businesses, according to Forbes. Over the years, it has evolved from an on-premise solution to a comprehensive cloud-based system, which competes with several other online payroll and accounting software.

    QuickBooks remains a popular accounting solution, but outsourcing payroll to a Professional Employer Organization (PEO) offers significant advantages, especially for growing companies. Let’s explore the key differences and benefits of outsourcing payroll:

    Software And Add-On Costs

    While QuickBooks offers various versions tailored to different business needs, the advertised pricing structure differs from a PEO. Essential payroll features often require additional monthly fees and per-employee charges. For instance, some of QuickBooks’ payroll options come with extra costs for direct deposit, tax filing, and W-2 processing. In contrast, PEOs typically offer more comprehensive services with transparent pricing structures, covering a wider range of functions without hidden fees.

    Automation And Efficiency

    QuickBooks automates some payroll functions, but outsourcing to a PEO takes efficiency to the next level. PEOs handle all aspects of payroll processing, significantly reducing manual work and saving business owners time to focus on core business activities. Partnering with a PEO allows your business to streamline processes, reduce administrative burdens, and gain access to additional HR services.

    Tax Compliance And Liability

    Relying on one internal employee or QuickBooks user to manage payroll can carry a high margin for error. One of the most significant benefits of outsourcing payroll is tax assistance. PEOs take responsibility for paying all federal and state taxes and handling wage garnishments. With QuickBooks, these responsibilities fall on the business owner, increasing the risk of errors and penalties. PEOs ensure compliance with ever-evolving payroll regulations, reducing the probability of costly mistakes.

    Scalability And Flexibility

    PEOs are better equipped to handle rapid business growth and increasing employee headcounts. They offer greater scalability and can adapt to changing needs, including complex pay structures and multi-state compliance. This flexibility is crucial for businesses expecting significant growth or seasonal fluctuations in staffing levels.

    Comprehensive HR Services

    Unlike QuickBooks, which focuses primarily on accounting and payroll, PEOs offer a full range of HR services. This includes benefits administration, workers’ compensation, hiring and termination support, compliance assistance, and more. PEOs provide pooled rates for employee benefit plans, which can be particularly beneficial for startups and small businesses looking to offer competitive benefits without incurring high costs.

    Expertise And Support

    PEOs provide access to dedicated payroll specialists who can answer complex financial questions and offer personalized support. This level of expertise is not always available with software solutions like QuickBooks. GMS’ payroll experts will handle all the details, from filing the necessary paperwork to the ongoing maintenance of tax records. Our team will also keep your business up to date with the complex tax filing requirements as they inevitably change and complicate your payroll processes.

    Cost-Effectiveness For Growing Businesses

    While QuickBooks may seem cheaper initially, PEOs can be more cost-effective for growing businesses. PEOs handle the complexities of scaling without requiring additional in-house resources. PEOs also offer your company greater buying power for employee benefits through economies of scale and reduced administrative overhead.

    Risk Reduction

    Outsourcing payroll to a PEO significantly reduces the risk of errors associated with manual entry and limited training. This is particularly important as payroll involves sensitive data and complex calculations. PEOs have systems in place to ensure accuracy and compliance, mitigating the risk of costly mistakes and penalties. GMS’ payroll software integrates with other platforms, allowing us to seamlessly calculate and apply deductions for health insurance and other employee benefits. Meanwhile, all your data and documentation are securely stored online so that you can eliminate countless paper copies and waste.

    Time Savings

    The basic version of QuickBooks is designed for users with limited accounting and financial needs. This gives them less of a learning curve, but it also means that they aren’t likely to have all the functionality and features that a business owner needs.

    On the other hand, more advanced versions of QuickBooks require significant ongoing training to ensure they are being used correctly. Having an in-house, credentialed QuickBooks user means that ongoing training will need to be planned for, due to continuous updates to the software.

    By outsourcing payroll to a PEO, business owners can free up significant time previously spent on data entry, tax filings, and ongoing software training. This allows them to focus on core business activities and growth strategies.

    GMS Connect

    GMS’ online payroll software, GMS Connect, makes running payroll simple. Our online technology streamlines the payroll process to create less paperwork and give users access from anywhere with an internet connection. GMS Connect is an SOC 1-certified human resources information system (HRIS) that helps business owners manage the entire lifecycle of their business. These capabilities give you access to cutting-edge payroll management software that helps you improve your bottom line. GMS Connect has many features, including:

    • Easily calculate payroll deductions with built-in benefits and time-tracking features
    • Generate on-demand payroll reports
    • Keep track of payroll records in one central repository
    • Electronic payroll processing via direct deposit
    • Streamlined payment for all types of workers (e.g., salaried, hourly, contract)
    • Effortlessly submit payroll taxes and process W-2s
    • Simplify workers’ compensation calculations and payments

    Streamline Payroll Processes With A PEO

    While QuickBooks has its merits for small businesses with simple needs, outsourcing payroll to a PEO like GMS offers substantial benefits for growing companies. PEOs provide comprehensive payroll and HR solutions, reduce liability, ensure compliance, and offer scalability to match your business growth.

    PEOs handle complex tasks such as multi-state tax compliance, benefits administration, and workers’ compensation, allowing you to focus on your core business operations. By partnering with GMS, you gain access to expertise, reduce risks, and position your company for efficient growth and success in the future. Contact GMS today to learn how our PEO services can streamline your payroll processes and support your business’s expansion.

  • As a business owner, you likely didn’t start your venture with the excitement of managing payroll. Managing payroll is a daunting task due to its complexity and the meticulous attention to detail it requires. Staying compliant with the changing payroll tax regulations and labor laws adds another layer of difficulty. Mistakes in payroll can lead to significant financial penalties and damage employee trust, making accurate payroll management crucial but challenging.


    The time-consuming nature of payroll management can also detract from focusing on core business growth strategies. Fortunately, online payroll software offers a solution to streamline this process, allowing you to redirect your efforts toward business expansion. However, some business owners remain skeptical about transitioning to digital payroll solutions. Let’s address three common myths about online payroll software and reveal the truth behind them.

      

    Myth 1: Switching To Online Payroll Software Is Complicated

    Fact: While manual payroll management is indeed complex and time-consuming, transitioning to an online system is designed to simplify the process. The right software can streamline payroll tasks for both employers and employees, reducing the burden of paperwork and manual calculations.

     

     For instance, GMS’ online payroll is tailored to meet your specific needs and facilitate a smooth transition. We provide a dedicated payroll specialist to guide you through the setup process, answer questions, and ensure both you and your employees are comfortable with the new system. Our team collects necessary employee information to build your custom payroll system and offers personalized walkthroughs. Should any issues arise, dedicated support is readily available.

      

    Myth 2: It’s An Unnecessary Expense

    Fact: While there is a cost associated with online payroll software, it’s important to consider the time and resources it saves. According to The Business Journals, a survey found small business owners spend five hours or more each pay period, or 21 days each year, managing payroll. Online payroll software significantly reduces this time investment, allowing you to focus on core business functions.

    GMS’ online payroll system offers features that streamline the payroll process, including:

    • Easy tracking of deductions
    • Simplified workers’ compensation calculations and payments
    • Generate on-demand payroll reports
    • Direct deposit setup
    • Scan signed documents for compliance needs

     Moreover, access to payroll experts can help prevent costly errors, potentially saving your business from IRS penalties. The flexibility to manage payroll remotely is another significant advantage, enabling you to handle payroll tasks from anywhere with an internet connection.

      

    Myth 3: I’ll Lose Control Over My Payroll

    Fact: Investing in payroll software through a Professional Employer Organization (PEO) does not mean relinquishing control over your payroll. Instead, it provides you with enhanced tools for easier payroll management and access to expert support when needed.

      

    With GMS’ online payroll software, you maintain full control. The software doesn’t replace your accountant; it simply provides efficient tools to streamline payroll management. You can even customize what employees see when they log into the payroll site, ensuring you always stay in charge while benefiting from simplified processes.

      

    Take Your Time Back With Online Payroll Services

    In today’s fast-paced business environment, leveraging technology to streamline operations is crucial. GMS understands this need and offers comprehensive payroll solutions designed to save time, reduce errors, and provide expert support. Our online payroll software, combined with our team of payroll experts, ensures that you can manage your payroll efficiently while maintaining full control.

      

    By choosing GMS, you’re not just getting software; you’re gaining a partner committed to your business’s success. Our payroll services, backed by cutting-edge software and knowledgeable professionals, can help you navigate the complexities of payroll management with ease. Whether you’re looking to improve efficiency, ensure compliance, or simply free up more time to focus on growing your business, GMS has the tools and expertise to support your goals.

      

    Don’t let payroll management hold your business back. Contact GMS today to learn how our online payroll solutions can benefit your business and propel it toward greater success.

  • 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 pay stubs. 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 like Group Management Services (GMS) that can provide payroll services to business owners just like you.


    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 like GMS streamlines these payroll processes, you will still retain full control and direction over your employees.

    As a PEO with strong data security, quality customer service, and accurate payroll processing technology, Group Management Services can be the trusted partner that decreases your workload, lowers liability, and ensures compliance.   


    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 is 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!