0:00

Whenever I talk with business owners who say that running their business

0:01

has become less, well, fun,

0:05

human resources often tops the

0:05

list of things they wish they

0:09

didn't have to deal with. So,

0:09

what if you didn't? On today's

0:13

episode, we talked with Naydu

0:13

Brandenburg and Eric Wheaton of

0:16

TriNet, about the professional

0:16

employer organization or PEO

0:21

model, and how it can be the

0:21

aspirin for your HR headaches.

0:29

Welcome to Right in the Middle

0:29

Market, a podcast about

0:32

pragmatic perspectives on

0:32

running, growing and selling

0:35

your business. We talk about the

0:35

challenges, decisions and most

0:39

importantly, the actions

0:39

business owners can take to

0:42

create long term value in their companies. Welcome to Right in the Middle

0:48

Market. I'm Stephanie Chambliss

0:51

Gaffin and today I am so excited

0:51

that I have not one but two

0:55

guests with me from TriNet. We

0:55

have Naydu Brandenburg, who is a

0:59

Consultant with TriNet and Eric

0:59

Wheaton, who is a Managing

1:02

Director. Many of our listeners

1:02

as middle market business owners

1:06

struggle with human resources.

1:06

It is, when I talk to business

1:10

owners about the things that are

1:10

so tough for them, that are

1:14

confusing, that take up their

1:14

time and that pull them away

1:17

from what they really want to be

1:17

focusing on. Very often, HR

1:21

comes up near the top of the

1:21

list. There is a really

1:25

interesting entity out there

1:25

called a PEO. And I'm so excited

1:29

to be able to talk to Naydu and

1:29

Eric today, to help us learn a

1:32

little bit more about, what is a

1:32

PEO? How do they work? And what

1:37

are some of the benefits of

1:37

being able to work with a PEO?

1:40

So Naydu, I'd love for you to be

1:40

able to kick us off. And first

1:44

of all, welcome. We're delighted

1:44

to have you here on the podcast.

1:47

Thank you so

1:47

much for having me. This was

1:49

something exciting that I was

1:49

very much looking forward to. So

1:52

here we are. Thank you.

1:55

Yeah. And Eric, glad to have you as well.

1:57

Yeah, my pleasure. Thank you again, Stephanie, for having us.

2:00

So

2:00

to kick us off today. Eric, I'd

2:03

love for you to, can we just

2:03

start by, we always like to say

2:06

we want to level set with our

2:06

listeners, who have varying

2:09

degrees of expertise, help us

2:09

understand. What does PEO stand

2:14

for? What is a PEO and how did

2:14

they even come about in the

2:16

market?

2:17

Yeah, you know, great question. Even though the concept of a PEO has been around

2:19

for 30 years, there's a lot of

2:22

people that just don't know what

2:22

it is, you know, so it, it does

2:25

stand for a professional

2:25

employer organization. And what

2:28

that really means is, is that

2:28

it's has to do with

2:32

co-employment, I think that's

2:32

the best way to kind of describe

2:35

it. We become a co-employer as a

2:35

PEO with the clients that we

2:39

work with. And this is actually

2:39

something that the IRS actually

2:43

recognizes as a legal construct.

2:43

But by doing that, we are not

2:48

going to disrupt the

2:48

relationship that a client has

2:54

with their employees. They're

2:54

still what we call a worksite

2:57

employer. They still decide who

2:57

do I hire, who do I fire, how do

3:01

I manage them, what's all this

3:01

policies and things that I do

3:03

there? But what TriNet does or a

3:03

PEO does, is that we actually

3:09

then become an administrative

3:09

employer. And so that

3:12

administrative employer brings

3:12

things like big company benefits

3:15

to the table. They take care of

3:15

the responsibilities for

3:18

payroll. They take on a lot of

3:18

the risk issues, might it be

3:22

with, you know, employment

3:22

litigation issues, or workers

3:26

comp or unemployment. But by

3:26

doing that, their duties as a

3:30

PEO are very regulated down to

3:30

just that. We're not there to

3:34

interfere with that culture and

3:34

that relationship that's already

3:37

set up. We're there to really

3:37

kind of enhance what's already

3:41

in place and allow that business

3:41

to focus more on what they do

3:45

within their business.

3:47

Okay, so I've got to say that sounds really appealing. I'm a brass

3:48

tacks kind of a girl. So Naydu,

3:53

on a day to day basis, what does

3:53

that look like to the employer

3:58

and to the employee?

3:59

Fantastic question. I love that question because it impacts, you know,

4:01

bottom line, people. And so the

4:06

nuts and bolts of what a PEO

4:06

does for small to midsize

4:10

organizations, is essentially

4:10

just being able to outsource HR

4:14

functions, like Eric alluded to.

4:14

With the payroll, with the

4:18

benefits function. And also

4:18

leveraging from a service

4:21

standpoint, the resources again,

4:21

from a human capital standpoint,

4:25

so coming to us as your

4:25

professional organization in

4:28

being able to outsource the HR

4:28

tasks, that otherwise you have

4:31

either a VP of finance or a CFO

4:31

or somebody else within a role

4:35

and different capacities doing

4:35

multiple tasks for the

4:38

organization. And so in those

4:38

instances, it's a good construct

4:43

to have that partnership to

4:43

leverage those HR resources and

4:46

expertise that TriNet or PEO for

4:46

that matter would be able to

4:49

offer. And still be able to, you

4:49

know, have the liberty to do

4:56

business as usual, when it comes

4:56

to hiring terminating, what

4:59

salaries and anything else you

4:59

want to do to create the culture

5:02

that you're aiming for. Then

5:02

leveraging us for your HR

5:05

experts to help guide you.

5:08

Okay, so it sounds like that manager/ employee relationship stays

5:10

intact with, what I might call,

5:14

the operating organization, but

5:14

then a lot of kind of the behind

5:18

the scenes is in what a PEO can

5:18

take over.

5:21

Exactly.

5:23

So,

5:23

give me a sense, is this kind of

5:25

a, is there a predominant model

5:25

in the industry about this is

5:30

how it works. Are there are a

5:30

variety of options of the

5:33

different kinds of services that

5:33

may come in for a PEO? Eric,

5:38

what does that usually look like?

5:40

There are many

5:40

choices that people can make on

5:42

that, some of those different

5:42

choices could be that maybe they

5:46

want to keep, like their

5:46

retirement intact of what

5:48

they've already set up for that.

5:48

So a lot of times, that could be

5:52

an optional choice on that.

5:52

There are some instances,

5:55

Stephanie, where maybe the

5:55

medical that they're using is

6:00

specialized, or that they want

6:00

to keep that type of operation

6:04

in place. So we call that a

6:04

"carve out" to where that type

6:07

of thing could be carved out,

6:07

and still allow the other

6:10

constructs of risk mitigation,

6:10

of HR expertise and support for

6:15

their employees to still be in

6:15

place. So, you know, the

6:19

industry tries to be flexible in

6:19

that sense. And, and really just

6:22

try to focus on you know, what a

6:22

PEO does good, which is

6:27

obviously HR and really allow

6:27

them to focus more on their

6:30

business, and what's important

6:30

to them. And so many times, I

6:33

mean, we see that, the business

6:33

has great smart people. Maybe

6:36

they're scientists, maybe

6:36

they're inventors, maybe

6:39

they're, you know, coders or

6:39

whatever, but they may not

6:42

necessarily be HR experts. And a

6:42

lot of times, like I said,

6:45

that's that expertise, I think

6:45

is missing. And they just need a

6:50

good advisor, or somebody that's

6:50

just giving them guidance, and

6:54

helping them along that path to

6:54

ensure that they can have that

6:58

business continuity.

6:59

So

6:59

in a tactical sense, what are

7:02

some of the specific services?

7:02

I've heard you talk about health

7:05

care. Naydu, what are some of

7:05

the other services that a PEO

7:10

can take over?

7:11

Yeah, great

7:11

question. So some of those would

7:13

entail economies of scale,

7:13

leveraging that partnership to

7:16

access economies of scale, or

7:16

gain the benefit of economies of

7:20

scale to purchase the benefits,

7:20

as you mentioned, but more

7:23

importantly, also, resources

7:23

that are unique and specific,

7:26

again, HR related, right? With

7:26

the COVID situation, there's a

7:30

lot of nuances that have

7:30

happened and HR laws that have

7:34

gone into effect, and tweaks

7:34

that have happened within that

7:37

HR world. So having a partner to

7:37

help you navigate and guide you

7:42

through all those nuances is

7:42

exactly how you would leverage a

7:46

relationship with a professional

7:46

employer organization, to help

7:49

you mitigate a lot of the risks

7:49

that could come from not

7:53

following or not being aware,

7:53

simply, you know, of what those

7:56

HR guidelines now are. So

7:56

nuances like that, we have the

8:00

ability to deploy, again, those

8:00

resources in that construct in

8:03

that relationship, to help our

8:03

clients.

8:06

Okay,

8:06

so what you're saying is then, a

8:08

resource around and I know, when

8:08

I work with companies from a

8:12

consulting perspective, and

8:12

sometimes they're in the

8:15

unfortunate situation of needing

8:15

to eliminate positions, or

8:19

dealing with a tough HR issue.

8:19

And I know that I'm always the

8:22

first one to say, you got to

8:22

make sure you talk to your HR

8:24

folks to make sure that you're

8:24

abiding by all the appropriate

8:27

rules and regulations. So it

8:27

sounds like that that's another

8:31

area where the PEO can be a

8:31

resource.

8:33

Very much so.

8:33

Very much so.

8:37

Okay,

8:37

so we've got the medical

8:39

benefits, we've got, you know,

8:39

kind of that resource around

8:42

policies and procedures and

8:42

legal aspect. Eric, what other

8:47

pieces, when you think about the

8:47

range of services available?

8:50

Yeah, you know

8:50

what, I tend to look at it and

8:53

as what stage is a company in.

8:53

Is it an early company that may

8:59

be focused on, you know,

8:59

attracting talent. So, as you

9:03

know, Stephanie, it's a very

9:03

competitive market out there

9:05

and, you know, how do I look

9:05

maybe as a new employer? And do

9:08

I have the ability to attract

9:08

the type of top talent that I

9:11

need or retain that type of

9:11

talent, so very important in the

9:14

marketplace, because obviously,

9:14

that's what gets things done. As

9:17

I'm trying to grow my firm,

9:17

though, you know, you get more

9:21

focus on operations and margins

9:21

and best practices. So that's

9:25

another type of area with that

9:25

type of expertise that a PEO

9:28

has. They've been through that

9:28

too, they've seen companies go

9:31

from, start up to, established

9:31

type of companies, and the

9:36

growth of, you know, up to

9:36

hundreds of employees, perhaps.

9:41

It might be also for their businesses, they start expanding. They might expand

9:43

into multiple states that they

9:47

haven't been in to. So, you

9:47

know, what are the nuances now

9:49

of going into New York or

9:49

California or other places like

9:53

that, and what type of burden

9:53

would have put upon them? Then

9:56

lastly, I think, Stephanie is is

9:56

that maybe as I'm looking at,

9:59

you know, selling off my company

9:59

and looking at how can this

10:04

possibly help me for that? We

10:04

find that it can be very

10:08

attractive for companies who are

10:08

underneath the confines of a PEO

10:15

that that signifies to the

10:15

bottom. I don't have to worry

10:19

about any of that type of

10:19

supposed typical litigation

10:23

issues or wrongful termination

10:23

type of things or things like

10:25

that I might be inheriting.

10:25

Because you know, that shared

10:29

risk model is there. So it can

10:29

tend to assist them when that

10:34

due diligence process, when it

10:34

comes to their exits, or maybe a

10:40

potential merger.

10:41

Eric, in that description. I love how you just tied into what we are

10:43

all about here at Right in the

10:46

Middle Market, that we are all

10:46

about running, growing and

10:49

selling your middle market

10:49

company. And so that was

10:51

perfect. I think that helped us

10:51

understand how this can be

10:54

helpful in each one of those

10:54

phases. Okay, so I'm a middle

10:57

market business owner, I'm listening, and I'm like, "Alright, I'm kind of

10:59

intrigued." How do you see

11:03

business owners think through?

11:03

What are some of the different

11:07

right models, or some of the

11:07

different models that are out

11:10

there for a PEO and what is the

11:10

right model for their

11:12

organization?

11:14

Why don't we look

11:14

at it from a standpoint of like,

11:17

what are the main options out

11:17

there? So, you know, if you

11:20

remember the game show of like,

11:20

what's behind door number one,

11:23

two, or three? Door number one

11:23

is really an internal type of

11:28

model that we see where middle

11:28

market companies will want to

11:33

kind of build an infrastructure,

11:33

not only do they want to hire

11:36

the right type of people, maybe

11:36

within HR, within benefits,

11:39

within payroll, but there may be

11:39

also want to just have internal

11:42

expertise on software, and try

11:42

to do everything themselves.

11:47

Then there's the other door

11:47

where we call it more of a multi

11:51

vendor model. And I think this

11:51

is probably the most common one

11:54

that we see in this space here,

11:54

where they go out to find a

11:58

provider for payroll, a provider

11:58

for their benefits through a

12:02

broker. Another broker maybe

12:02

for, you know, for their general

12:07

liability, and workers comp.

12:07

Another broker, maybe for their

12:09

retirement options. Maybe a

12:09

consultant here for HR or legal

12:14

advice over here. And it just

12:14

becomes like six or seven

12:19

different type of vendors that

12:19

they might be looking to try to

12:22

bring together for the benefit

12:22

of providing what's needed for

12:25

their employees. And then of

12:25

course, the third option is what

12:27

we've been talking about, it

12:27

would be, you know, a PEO, that

12:30

tends to manage all those

12:30

aspects together, it really be

12:34

that one back to pad, or throat

12:34

to choke, however you like to

12:37

look at that, you know, that

12:37

that a customer can actually

12:42

hold somebody accountable to.

12:45

Let

12:45

me just ask a clarifying

12:47

question around the multi

12:47

vendor. So are you saying that a

12:50

PEO or a company like TriNet or

12:50

somebody else who does kind of

12:54

the same thing that you do, are

12:54

they helping to identify those

12:57

different vendors, or they

12:57

become one of those vendors.

13:00

We really become

13:00

one of those vendors for them.

13:03

Because we want to take the

13:03

complexity out of- every time

13:06

you input a new vendor into the

13:06

concept there, you can

13:12

potentially have integration

13:12

issues, you can potentially have

13:15

visibility issues with

13:15

reporting. What type of

13:19

processes is also putting their

13:19

employees through maybe that

13:21

might have to have multiple

13:21

systems or, or things to be able

13:25

to go through? So, we're trying

13:25

to take the complexity out of a

13:30

multi vendor type of

13:30

environment, and still be able

13:33

to provide that with with the

13:33

best practices that a PEO has in

13:38

place, to be able to make it

13:38

easier for that business to be

13:42

able to run and grow.

13:44

Naydu, I know when we were talking just a little bit before the call,

13:46

you were sharing that you're

13:48

seeing a lot of inbound interest

13:48

right now in folks wanting to

13:52

explore the PEO type model. And

13:52

I think it'd be great if you

13:57

could share just what are some

13:57

of those reasons that you find

14:00

somebody saying, "Okay, there's

14:00

got to be a different way." What

14:03

are some of the things that seem

14:03

to motivate folks or drive folks

14:06

to want to explore a PEO option?

14:09

Yeah,

14:09

terrific question. And what

14:11

we've been seeing lately, is

14:11

change in personnel is one of

14:15

the biggest things that is

14:15

happening. Someone leaving and

14:20

therefore also teams that are

14:20

growing by way of acquisition,

14:24

or organically for that matter.

14:24

So while this whole COVID

14:27

situation, it varies, you know,

14:27

per firm. It's a combination of

14:34

those two things. And then the

14:34

third item that I have been

14:37

noticing lately is also changes

14:37

in their medical offering. So in

14:42

having more open ability to hire

14:42

outside of your own state and

14:48

consider someone in a different

14:48

state that you might be

14:51

reciting, because now there's no

14:51

boundaries being that most of us

14:54

are working from home. The idea

14:54

that you know, the benefit

14:58

package that you had in place

14:58

worked wonderfully, but now that

15:02

you have a group of one, or two

15:02

or 10, in another state, right?

15:07

those complexities come into

15:07

play where now you no longer can

15:11

compete adequately for the

15:11

talent in which you're trying to

15:16

acquire that happens to be in

15:16

New York, for example. So those

15:20

are the things that we've been

15:20

seeing recently with, you know,

15:23

some of the changes in the

15:23

appetite, if you will, to look

15:26

at and consider what other

15:26

options exists for my firm? And

15:32

the way that we've done business

15:32

has been this particular way,

15:34

but is there a different way?

15:36

Right.

15:36

And I think that's one of the,

15:39

I've got to think that part of

15:39

it is when you start to look at,

15:44

how much time are we spending? I

15:44

know, one of the things that we

15:46

work with companies a lot on is

15:46

how do you build that

15:49

infrastructure? Right? So you're

15:49

getting ready to grow. I was

15:52

actually just talking to somebody about this yesterday about, you're looking to grow,

15:54

how do you make sure that you're

15:57

building the infrastructure

15:57

along with you? Because

16:00

otherwise, you run the risk of

16:00

collapsing under your own

16:04

weight, it becomes a significant

16:04

drain on the owners as they're

16:07

trying to keep the energy up and

16:07

be able to have that kind of

16:13

infrastructure that they need

16:13

for for growth. Eric, do you see

16:16

that?

16:17

You know what, we

16:17

do see that and I think, as

16:19

Naydu was saying something to

16:19

kind of piggyback onto that, and

16:22

to your comments about

16:22

infrastructure. One of the

16:25

things that we've seen

16:25

throughout 2020, and the

16:27

pandemic has produced, is that,

16:27

you know what, this has really

16:31

brought to light, some of the

16:31

weaknesses that people might

16:34

have in some of their current

16:34

processes. We've all had to make

16:37

shifts and adjustments to where

16:37

and how we operate. So there's

16:42

been an awareness of that. And I

16:42

think, as Naydu was saying, this

16:45

has brought on a lot of

16:45

interest, because they know that

16:48

I can't ignore the importance of

16:48

my employees and my people. And

16:52

if I'm not investing in my

16:52

people, and I'm not making this

16:54

easy for them, they're not going

16:54

to be there to make my widgets,

16:58

to serve my customers, or to

16:58

allow me to continue to grow my

17:01

business. So, you know, that has

17:01

really sparked a lot of it. But

17:06

having that platform, or that

17:06

infrastructure that you talked

17:09

about, really allows an infinite

17:09

ability to scale. You know,

17:13

we've had several clients that

17:13

have come to us because maybe

17:16

they brought two or three

17:16

companies together to form a new

17:20

co, kind of like a holding

17:20

company, as a roll ups type of

17:24

strategy. And they wanted to be

17:24

able to have this to where it

17:27

made each additional acquisition

17:27

so much easier for them. And

17:31

when you do have that HR

17:31

infrastructure in place, that

17:34

really does allow you to kind of

17:34

almost accelerate that type of

17:39

of acquisition approach that you

17:39

can actually bring on.

17:42

Very early in my career, I was part of a health system in the

17:44

Midwest, and they were going

17:48

through a series of mergers in

17:48

relatively rapid succession. And

17:52

I remember again, this was very

17:52

early in my career, and I

17:54

naively thought that the

17:54

strategic questions would be the

17:57

biggest stumbling blocks. And

17:57

I'm not convinced that it wasn't

18:00

actually trying to figure out

18:00

how do we reconcile all of the

18:04

different HR systems among these

18:04

different hospitals that were

18:06

now coming together into a

18:06

single system. And you know,

18:10

it's something that all these

18:10

years later I remember very

18:12

vividly, as just a painful set

18:12

of negotiations. And so, I know

18:20

exactly what you're talking

18:20

about. And again, if you know,

18:23

as we think about both organic

18:23

and inorganic growth for

18:25

organizations, the last thing

18:25

that you want is to be diverting

18:29

your focus and your attention

18:29

to, you know, I need to figure

18:34

out how to bring these systems

18:34

together, or how do I make sure

18:37

that we have the right kind of

18:37

benefits to be able to attract

18:41

folks? And I think that leads us

18:41

to, you know, as we think about

18:45

this, what is really the return

18:45

on using a PEO, and I'm going to

18:51

ask you that question right

18:51

after we come back from this

18:53

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20:07

Welcome back. We are here today

20:07

with two fantastic individuals

20:12

from TriNet, Naydu Brandenburg

20:12

and Eric Wheaton, and we were

20:16

just talking about some of the

20:16

benefits that are available of

20:22

having something like a PEO to

20:22

support the growth of the

20:26

organization. Which obviously

20:26

here at Right in the Middle

20:28

Market, we are all about

20:28

supporting growth of

20:31

organizations. And so, how do

20:31

you think about and, Eric or

20:35

Naydu, let me know who wants to

20:35

jump in on this first. How do

20:39

you think about actually, is

20:39

there an ROI [Return on

20:41

Investment] to using a PEO? How

20:41

do you think about the benefits

20:44

in actually the the financial

20:44

aspect?

20:48

Yeah, great.

20:48

So a lot of the ways that we

20:52

approach, you know, the

20:52

conversation with some of our

20:55

clients in this particular space

20:55

is, planting the seed, the

20:59

notion that you should leverage

20:59

HR as a strategy, versus a

21:04

reaction to something that

21:04

happened or could happen. So in

21:08

doing so, there's absolutely an

21:08

ROI. And I would highly

21:14

recommend that people that are

21:14

listening to this, also do their

21:19

due diligence, just like with

21:19

anything else that they do. And

21:22

there is a National Association

21:22

of Professional Employer

21:26

Organization that bets out, you

21:26

know, the players in the

21:31

industry, and more importantly,

21:31

they provide you with really

21:34

good resources that can further

21:34

explain the construct that we

21:38

were alluding to earlier in that

21:38

co-employment relationship and

21:41

what does that mean. More

21:41

importantly, there's also

21:44

studies that that group has

21:44

done, the association has done,

21:47

where talks about the ROI

21:47

specifically, as you mentioned.

21:53

There's something to be said

21:53

about, not just from a financial

21:57

standpoint, but also from again,

21:57

going back to that strategy, and

22:01

leveraging HR as a strategy, in

22:01

being able to completely

22:04

streamline the entire process,

22:04

from the time that you put up a

22:08

job opening, to the time that

22:08

you bring an employee on board,

22:12

and having all those functions

22:12

in between those two time

22:18

periods, completely integrated

22:18

with one another. So the ROI

22:22

there just in the time that it

22:22

would take to post a job, go

22:26

through the recruiting process,

22:26

and then bring that individual

22:29

on board, that in itself, could

22:29

be very, very helpful in

22:34

minimizing and reaping the

22:34

benefits that go along with the

22:38

ROI and the percentages that you

22:38

see overall, in you know,

22:42

eliminating the extra steps

22:42

involved in having things, not

22:47

communicating with one another.

22:47

So that strategy, again, is

22:51

helpful in assuming and

22:51

realizing a true ROI.

22:55

So two things that I want to pick up on what you just said and

22:56

then Eric, I'd love to get your

22:59

thoughts on this point as well.

22:59

Number one, I love that concept

23:02

about being intentional with

23:02

strategic choices, I think that

23:06

it's something we talk about a

23:06

lot here, of if you don't know

23:09

where you're going, if you don't know what you're trying to achieve, then it becomes very

23:11

hard to make decisions, and to

23:15

have the right criteria by which

23:15

making decisions. The second

23:18

thing is talking about the

23:18

National Association, and we

23:21

actually, just on a couple of

23:21

episodes ago, when we were

23:24

talking with Amanda Wood of

23:24

Becker, we're talking about how

23:27

valuable those associations that

23:27

you belong to are. So we'll be

23:32

sure to post a link to the

23:32

association that you mentioned

23:35

in the in the show notes so that

23:35

folks can find that and can have

23:42

access to that resource as well.

23:42

Eric, how do you think about

23:45

ROI? What would you add to this?

23:47

You know, I think

23:47

Stephanie, that you have to look

23:50

at it that a lot of the

23:50

thousands of these type of

23:54

analysis is that our teams have

23:54

done over the years, you know,

23:58

what you don't know is what you

23:58

don't know. So we encourage

24:01

people to explore all of their

24:01

cost and look at this really

24:05

more from a holistic approach.

24:05

What is it that I'm really

24:09

spending on everything HR

24:09

related that it takes to support

24:13

all of my employees? And it's

24:13

not just a matter of just a line

24:16

item of maybe what am I spending

24:16

for payroll or what am I

24:19

spending for benefits or

24:19

whatever, but as Naydu was

24:21

saying, there's a lot of other

24:21

aspects on that. So we always

24:26

encourage people that, "Hey, if

24:26

you're going to look at options,

24:29

why not look at all your

24:29

options?" Because it does one of

24:32

two things. One, it allows, that

24:32

one, this may be a model for

24:36

you, and it may not be and we're

24:36

okay either way if for something

24:39

like that, but also secondarily,

24:39

it also is a good validation, to

24:45

really look at to say, ?What am

24:45

I doing and is the value that

24:49

I'm paying for this, am I

24:49

actually getting that type of

24:52

value." So, I almost look at it

24:52

like as a as an HR benchmark or

24:57

checkup. Because you know, HR

24:57

sometimes is not one of those

25:01

areas that you're always looking

25:01

at, you know, you're looking at

25:04

your sales strategy, you're

25:04

looking at your operation

25:06

strategy, your profitability

25:06

strategy, but yet we need people

25:10

to run our companies and

25:10

sometimes this is an overlooked

25:13

area.

25:14

Go

25:14

back to that point about that a

25:16

PEO may not be the right model

25:16

for you. Give me an example of a

25:20

company that maybe this was not

25:20

the right fit for them.

25:24

Yeah, we see that

25:24

sometimes where maybe based

25:27

upon- one thing that the type of

25:27

industry that they're in, so

25:32

because a PEO has thousands of

25:32

customers that they maintain

25:37

that type of service for, they

25:37

have to be cognizant to make

25:41

sure that, is this the right

25:41

type of client that we really

25:45

want to be able to bring on,

25:45

does this support, you know, our

25:49

efforts to make sure that this

25:49

is a good business for us. But

25:51

also we want to protect all the

25:51

clients that a PEO has, to

25:55

ensure that we can provide that

25:55

consistency when it comes to

25:58

year over year types of costs,

25:58

renewals and things like that,

26:01

that they can budget for more

26:01

accurately. So, you know, we

26:05

tend to stay away from certain

26:05

types of industries that might

26:07

be, you know, dangerous or high

26:07

risk, or maybe in questionable

26:13

spaces of how would you say it,

26:13

you know, ethics or whatever.

26:19

But, yeah, so that would be the

26:19

main type of thing, it also

26:23

could just depend on maybe some

26:23

of their strategy and where

26:28

they're going on direction, or

26:28

some of the choices that they

26:33

may make about healthcare, or

26:33

technology. It just really kind

26:38

of depends on that. But again, a

26:38

lot of times we see as this more

26:42

of an education type of area, to

26:42

really see if this makes sense

26:46

for them or not.

26:48

And something

26:48

else that I wanted to add to

26:51

that note, Stephanie, is the

26:51

fact that you know, a client

26:55

that wouldn't be necessarily a

26:55

good fit would be, in my

26:59

opinion, the ones that would be

26:59

at a disadvantage if they want a

27:02

need and, you know, their vision

27:02

is to have that flexibility.

27:07

Like we were talking about

27:07

earlier, with the multi-vendor

27:09

approach, you have a lot more

27:09

flexibility in being able to

27:12

choose who you want to partner

27:12

with for payroll, who do you

27:14

want to partner with for your

27:14

401k benefit, and things of that

27:17

nature. A lot of times, what

27:17

we've seen is that there are

27:21

partnerships that exists,

27:21

whether it's a client or some

27:27

other type of construct with the

27:27

partnership, where those things

27:30

are very tight to the client and

27:30

saying, I have to work with this

27:35

401k provider due to this

27:35

partnership and things of that

27:38

nature, or we have to work with

27:38

this medical provider, carrier

27:41

rather, because of this

27:41

particular relationship. So the

27:44

flexibilities that you need in

27:44

that, you know, stands is is

27:49

where the PEO wouldn't be

27:49

necessarily a good fit for a

27:52

client that has those particular needs.

27:54

Yeah,

27:54

that's a great point. As we come

27:58

here to the conclusion, you

27:58

know, that we always at the end,

28:02

ask for two pragmatic tips. So

28:02

before we get to that, I'm gonna

28:06

ask for one from each of you.

28:06

But I think for anybody who's

28:10

listening to this, and is

28:10

starting to think about, "Gosh,

28:13

maybe I should explore a PEO."

28:13

What would be your top couple of

28:18

things that they should look

28:18

for, in terms of how you would

28:24

evaluate a PEO? What are some of

28:24

the most important questions to

28:29

ask of a potential PEO? And

28:29

Naydu, lets start with you and

28:33

then Eric, I'd love to get your

28:33

thoughts on this as well.

28:36

Hands down

28:36

for me, I would always always

28:38

always say do your due

28:38

diligence, you know, look for

28:42

references, make sure that the

28:42

provider that you're looking

28:46

into is absolutely in good

28:46

standing, again, referring back

28:50

to the National Association of

28:50

PEO's. So in doing your due

28:54

diligence, ensure that they are

28:54

satisfactory in the licensing

29:00

and everything that you need in

29:00

order to be a qualified provider

29:03

in this type of space.

29:05

Eric, how about you?

29:06

Yeah, I think it's

29:06

going back to, does this

29:09

complement my industry that I'm

29:09

in, in my business? So does this

29:13

PEO have relevant experience to

29:13

understand, you know, technology

29:18

or financial services or

29:18

nonprofit? So, somebody that

29:22

understands that type of

29:22

language can bring them that

29:24

level of experience with it. I

29:24

think another big point on that,

29:29

too, would be about just the

29:29

type of benefits that you're

29:33

looking at, because that becomes

29:33

such a big part of the spend

29:36

that you have right outside of

29:36

salaries. And that's an

29:40

important area. So looking at

29:40

the quality of those type of

29:43

plans, looking at how those

29:43

plans are actually priced and

29:48

what is the offering exactly to

29:48

an employer to actually

29:51

evaluate. I think that that

29:51

becomes a big difference also on

29:55

the type of a PEO options that

29:55

are out there.

29:58

Yeah, that's a great point. I don't That it would have really

30:00

occurred to me that there would

30:02

be PEO's that specialize in

30:02

certain types of industries. And

30:05

now that you say it, of course

30:05

that makes sense. That's a great

30:10

one to look at and you probably

30:10

where you can also talk to

30:14

others again and perhaps in your

30:14

own professional associations or

30:18

other collaborators or even

30:18

friendly competitors that you

30:22

know, to say, Who are they

30:22

using? And who are they looking

30:24

at? Alright, so as we come to

30:24

the end of the episode, again,

30:29

here, we are all about

30:29

pragmatic, tangible tactical

30:32

advice. And so we have a lot of

30:32

folks here who are living in a

30:37

brave new world when it comes to

30:37

thinking about managing their

30:40

employees and managing HR. So

30:40

I'd love to conclude with just

30:45

one tip from each of you. These

30:45

are kind of a short pragmatic

30:48

tip on the HR front for middle

30:48

market business owners who are

30:53

listening right now, Eric, let's

30:53

start with you.

30:56

Don't go at it

30:56

alone. It's okay to ask

30:59

questions and to seek new

30:59

options and ideas, especially in

31:03

an environment like today, that

31:03

we're in. We have to look for

31:07

new ways of doing business in

31:07

2021 and explore all options.

31:12

Good one. Naydu, how about you?

31:14

I'll say it

31:14

again, absolutely leverage HR as

31:17

a strategy, and not as a band

31:17

aid hair on fire situation.

31:22

Great

31:22

tips from both of you. And on

31:25

that note, I'm Stephanie

31:25

Chambliss Gaffin and you've been

31:27

listening to Right in the Middle

31:27

Market, a podcast about running,

31:31

growing and selling your middle

31:31

market business. We'd love to

31:34

hear your comments about today's

31:34

episode or ideas for topics

31:37

you'd most like to hear in the

31:37

future. Send me a message on

31:39

LinkedIn or drop me a line at

31:39

[email protected] and

31:43

don't forget to subscribe to

31:43

make sure that you hear all of

31:45

the great tips in upcoming

31:45

episodes. Until next time, be

31:50

well and be resourceful.