Project Four

This case involves a study performed by Northeast HR for Hire comparing methods of delivery of payroll and benefits.

This client asked Northeast HR for Hire to assist her in a decision concerning the production of payroll and the delivery of benefits for their employees. In addition, our consultant performed a similar evaluation for the client's affiliated company, whose situation and needs mirrored those of our client. Therefore, our recommendations were applicable to both companies.

Background

These clients were patrons of a national Professional Employee Organization (PEO) for a number of years. The relationship was unstable for a number of years. The PEO decided to relocate the processing of this client's payroll out of state. There were a number of particular problems with service, which became worse once the processing was relocated. The PEO's decision to include an $18.00 additional delivery fee for its service prompted their contacting Northeast HR for Hire.

Scope

• Switching to another PEO
• Switching to a Payroll Processing service provider
• Evaluating availability of benefits should the PEO relationship be dissolved
• A recommendation of three to four finalists to assist the client in deciding which course of action would meet their client's needs

• An assessment of the client's Human Resource and Risk Management needs
• An assessment of the client's goals and the capability of the PEO to meet those goals
• An assessment of the PEO's financial background, including a demonstration that the payroll taxes and insurance premiums were being paid in a timely manner
• Client and professional references from the PEO to confirm its market reputation
• An investigation of the competence of the PEO's administrative and risk management service, including the depth and level of experience of the internal staff
• Understanding of the delivery and funding of employee benefits programs
• Determining who is the Third Party Administrator (TPA) or carrier
• Understanding of the employee benefits plan design and how it fits the client's goals
• A complete understanding of the terms and conditions of the service agreement with particular regard to each party's
accountabilities and liabilities as well as termination provisions

• An assessment of the provider's commitment to customer service
• Viability and portability of the provider's benefits
• Cost of the service
• Proximity of the provider's service center
• The depth of service from a Human Resource perspective

Northeast HR for Hire contacted 12 PEO organizations and evaluated their service and staff. We then narrowed the list and secured bids from those organizations that appeared to be most capable of meeting the client's needs. Some PEO's were eliminated from the list for the following reasons:

• Keena- this organization had known service issues and potential organizational problems that resulted in larger than normal staff turnover
• Tri-State PEO- the office in the Albany area was primarily a sales office and processing and support is geographically separate
• Administaff- geographically a New York City based organization with limited benefit offerings upstate

Payroll Services

In addition, we received proposals from 18 payroll only companies and performed an evaluation of their services and staff.

The following criteria was used to assess the payroll-processing portion of the project: Northeast HR for Hire analyzed each provider's ability to supply a full service payroll process for both the client and its affiliated company.

In addition, we examined the payroll service's ability to assist both companies in evaluation and acquisition of ancillary benefits such as Worker's Compensation Insurance, Group Life and Health Insurance to replace those offered by the PEO.

We examined the payroll service's ability to assist in the rollover of the client's employee 401(k) accounts to other 401(k) accounts or IRAs.

We also evaluated the payroll service's ability and proven track record in providing outstanding customer service and attention to detail in its communications and service to its clients.

Also included in the evaluation was an assessment of the geographic location of the processing center and (if it were not located close by) its track record on delivery, timeliness and cost.

The client was given a report outlining an assessment of the potential providers. We presented the client with three finalists in each of the categories and the potential cost savings associated with each finalist.

Resolution:

Northeast HR for Hire saved the client both time and money by undertaking this large project. Our consultant contacted numerous PEO and payroll service providers, interviewed each one, analyzed their products and services, checked their references and performed an in-depth cost/service comparison for the client. Northeast HR for Hire gave the client the necessary tools to decide which method best fits their needs. Once the client makes its decision as to PEO vs. payroll service, Northeast HR for Hire will further assist the client and employees throughout the transition to the new service.