Feb 17, 2020
| Dan Sheridan, President
One of the biggest risks of starting a new business is not the provided service or products themselves. The act of employing workers opens business owners to a myriad of risks associated with compliant human resources management. While an entrepreneurial mindset is crucial to getting a business off the ground, many newly minted employers adopt the same “quick fix” mentality to managing employees, which can result in major compliance violations.
As a broker, you play an important role in helping small and medium-sized business owners navigate
the maze that is HR compliance, both upon business launch and during periods of scaling up. In doing so, you not only solve their immediate needs, but you also establish yourself as a valuable ally in their business operations.
Here’s how to help your clients navigate the risks of HR and increase your value in their eyes.
Consider the big picture
Though you may be approached by a client initially to provide insurance solutions, you shouldn’t limit your engagement to strictly insurance-related matters. When it comes to human resources laws and regulations, many entrepreneurs don’t know what they don’t know. This is where you can help.
Discuss every aspect of your clients’ human resources administration and back-end processes. Here are the top questions you should make sure to ask:
- How are you managing payroll?
- Are you sure your payroll solution is compliant?
- Are you meeting wage and hour requirements?
- Are your employees property classified as exempt or non-exempt?
- Are you paying taxes for employees?
- Where are your employees domiciled?
- Are you sure you are meeting those local and state compliance requirements?
Your goal is to uncover your clients’ pain points, then suggest an appropriate solution. You don’t have to be an expert in HR, but helping your clients think about the true scope of human resources can open their eyes to areas where they may need additional support.
Understand your clients’ challenges
As a trusted business advisor, you are in a unique position to help your clients solve both day-to-day business challenges while also setting them up for success as they face the inevitable growth and evolution of their business. While they may still be focused on the minutiae, you’re better positioned to see the bigger picture.
Knowing what’s in store for the organization
in the next six months (or one year, or five years…) will enable you to get a head start on the unavoidable human resources challenges accompanying any growing business.
- What is the company’s projected growth plan?
- Will today’s benefits packages still appeal to new employees in three years’ time?
- Are there any seasonal or short-term staffing needs on the horizon?
- Can you achieve greater cost savings on benefits as the company scales up?
- Are there any plants to open new company offices in different states?
- Can the recruiting process be streamlined and standardized to surface quality employees even faster?
Knowing the company’s projected plan – even if it’s still a long way off – will prepare you to help your client take a preemptive approach to potential upcoming HR challenges. Getting a head-start prevents challenges from becoming full-blown crises.
Keep compliance top of mind
Unfortunately, many business owners don’t realize compliance violations are a major risk for their businesses. They are unaware of the strict (and oft-changing) human resources laws and regulations
that govern employers, each varying by jurisdiction.
Many small businesses are ill-equipped to manage the complexities of HR completely internally. They might employ an in-house HR or payroll coordinator who is tasked with the complete scope of HR functions, from onboarding to payroll to benefits administration and beyond. Depending on this person’s level of expertise, they may not be entirely well-versed in the nuances of HR compliance that affect the area in which their organization operates.
The most common HR compliance risks are in the areas of employee classification, minimum wage laws, and EEO laws. However, there are many lesser-known areas for complication
, including recruiting, workplace harassment, diversity and Inclusion policies, and correct navigation of the Affordable Care Act.
During your discussions with your clients, investigate these subjects. If this isn’t top of mind for your clients, this is a crucial area where you can help strengthen their processes.
Offer solutions…and keep asking questions
Continue to ask questions about the challenges facing your clients today and what the future holds for their organizations. By keeping an ear out for potential HR compliance pitfalls, you can propose solutions to ensure they won’t inadvertently open themselves up to avoidable exposure to liability.
For many small and medium-sized businesses, this is where partnering with a certified professional employer organization (PEO)
can help. By using a PEO, the business gains access to a full team of HR professionals who are experts in the human resources laws and regulations that apply to the business. Additionally, the enterprise-level technologies used by PEO clients were developed with compliance as a top consideration and continue to be updated to match changing regulation.
It’s a marathon, not a sprint
One of the best ways to provide more value as a broker
is to be an active collaborator, setting your clients up to withstand challenges that are an inevitable part of becoming an employer. Doing so demonstrates you are more than a single-solution provider; you are a trusted advisor who can provide insight and assistance managing one of the most challenging and risk-filled aspects of running a business: human resources.
Want to learn more about how partnering with Extensis can help you provide greater value to your clients? Request a quote today and let’s get started.