Taking Care of Business for 2016 and Beyond

We are now nearly two months into 2016. For many business owners, the close of 2015 was an opportunity to take account of where their business stood – what it had accomplished in the past year, and where it’s likely to go in this one.

From our perspective, our year-end analysis found the overall US business climate to be an interesting one—a mixture of good and bad news, with both bright and daunting prospects on the horizon. By nature, Trion is a company that thrives in times of change and challenge, but that certainly doesn’t hold true for the majority of businesses. Stability, order, and a logical progression of events create the best overall business climate, but 2015’s close found all three in somewhat shorter supply than many companies might like.

Here’s where it seems we stand. On the plus side, the economy is still enjoying general growth overall, though it is faltering in some sectors and growth never really started in others. The unemployment rate is edging back towards something resembling normal levels. Interest rates remain at historically low levels for the moment. There are few signs of significant inflation, and we’re just starting to see some slight upward pressure on wages.

That’s the good news. Now, the other side of the coin.

Nobody has to tell you that globally we are experiencing tremendous uncertainty and upheaval—the broadcast news networks will certainly never let you forget it. Headlines are filled with terrorist attacks, plunging oil prices, downed airliners, military skirmishes throughout the Middle East and dotted throughout Asia. We’re facing the distinct possibility that US troops may be called to take an active role in Syria; the US is simultaneously in significant diplomatic and economic disputes with Russia and China; and there’s no clear favorite in sight for next year’s presidential elections, leaving considerable uncertainty as to future tax and economic policies. From a business owner’s standpoint, any and all of these circumstances have the potential to be disruptive.

As a business owner, you can’t control national or global events – but you have at least some control over your response to them. That control is amplified when plan ahead for them, and are ready to make changes on the fly as consumer sentiment changes, economic conditions shift, prices rise, or supply chains contract. Just as in the natural world, adaptation is the key to survival, and the advantage goes to companies ready to right-think, right-size, and right-strategize for the times they’re in and the times to come.

As human resource services specialists, that’s what Trion is all about. A big part of our business is helping our clients adapt constructively to change and meet emerging business challenges head on. We work to give companies the flexibility to adapt, both responsively and proactively as needed, making sure they have the right number of the right people in the right positions to get the job done—and freeing management up to focus on handling today’s urgent business needs, strategizing to meet tomorrow’s demands, and laying the groundwork for stability and success, no matter what the coming years may bring.

Trion Solutions is a NAPEO Member

To Trion Solutions’ clients, it’s no secret that our company is constantly striving to improve itself. We have the same mania for optimizing efficiency, cost savings and company performance within our walls as we do for our client companies. What can we say? Trying to do things a little bit better—better than the other guy, better than we did yesterday—is in our DNA: A big part of Trion Solutions’ identity and operating methodology are grounded in the concept of continuous improvement.

That’s for a pretty good reason: When it comes down to it, business improvement is the main “product” we have to sell. Naturally, it makes sense to start with our own company.

In our experience, it’s paid off well:

Trion Solutions has grown consistently, becoming one of the nation’s most stable, successful, and highly reputed human resource services companies.

As such, it seems only appropriate that we formalize our quality and service commitment in a clear, unequivocal way. While we are accustomed to acting independently, and have had great success through doing so, we make it a point to pursue memberships and certifications from the organizations that are doing the most to advance the integrity of our industry and the quality of our services.

The National Association of Professional Employer Organizations (or NAPEO) is the largest national organization devoted to PEOs and human resources services companies such as Trion. In recent years, NAPEO has emerged as “the voice of the PEO industry,” advancing public knowledge about PEOs, supporting public policies that make sense for PEO companies and workers, helping to establish industry best practices, and supporting the integrity of the industry.

Nearly 1,000 PEOs currently operate across the United States; as is the case in most industries, quality, stability, and integrity can vary greatly from one company to the next. NAPEO’s Code of Ethics helps to ensure that reputable PEOs adhere to common baseline ethical standards with regard to the services they provide and the treatment of their employees. NAPEO supports ethics, good corporate conduct, best practices, and expertise amongst participants. This helps assure prospective PEO clients that the company they’re considering working with will truly work on their behalf, and will conduct its activities honorably and professionally.

NAPEO’s standards align closely with those of Trion Solutions. We have built our business on a foundation of professionalism, integrity, and expertise, and we applaud all efforts to improve our industry and the results we are able to achieve for our clients. That’s why we are glad – and proud – to be a NAPEO member.

Within our own sphere of influence—in our own company, and in the companies of our clients—we are working hard every day to achieve many of the same goals NAPEO is striving for: A better PEO industry that delivers better results for PEO clients.

NAPEO serves a vital role within the human resources ecosystem and within the PEO industry. As an active and engaged NAPEO member organization, Trion is doing its part to advance NAPEO’s quality agenda, creating a winning outcome for all concerned: Integrity, sound business practices, and industry stability are good for our industry and our clients—and ultimately, they’re good for the economy and for the country as well.

Helping Staff Cope with Change

CHANGE. For some, it’s a word associated with challenge and excitement; for others, it inspires revulsion, resentment, or dread.

Considering the degree to which the American workplace has changed over the last quarter century, both answers are understandable. Some change has been for the better; some decidedly for the worse. And some could be either, depending on your perspective. But two things seem certain: The last few decades of change have been rapid and transformative, and continuing rapid change seems inevitable and unstoppable.

Fortunate people and fortunate companies have managed to ride the tide of change up to this point – but each workplace upheaval leaves some fallen by the wayside. Adaptability, it seems, is no longer optional for survival. So how do we help our businesses deal with change? It turns out that in large measure, helping employees adapt helps companies adapt too.

Here are a few steps that will help your company and your people navigate the road ahead, whatever it may bring:

Foster collaboration. When it comes to change of any kind, some people are early adopters while others tend to stick with the familiar. Left to themselves, people addicted to familiar routines tend to be outpaced when workplace changes happen. In a collaborative environment, however, employees have the opportunity to share knowledge, ideas—and crucially, mutual encouragement. When it’s time to adopt new processes or technologies, that interactive and collaborative dynamic goes a long way towards making the transition smooth.
Plan for change. From the organization’s highest levels, make it a point to expect change, anticipate it, and welcome it when it arrives. Leaders have the opportunity to set the tone for their subordinates, and to create plans to help employees adapt as needed. Whether it’s developing extensive retraining programs, or simply being prepared to give employees authoritative information about coming transformations, planning ahead helps avoid operational disruption and employee resistance.
Compensate for adverse results where possible. Does a coming change mean that some employees will be affected adversely – working longer hours, losing a title, or losing a job? It’s not always easy or even possible to balance the impact of such outcomes, but when it can be done it usually should be. It’s no secret that performance is keyed strongly to morale, and even if some expense or effort is required to sustain morale during business transformation, the investment is usually well worth it over the longer term.
Encourage dialogue. People fear what they do not understand, and fear is a lousy basis for a good attitude on the part of your employees. Inviting questions, giving straight answers, and encouraging discussion can help your employees to come to grips with transformational workplace events like mergers, automation, efficiency drives, downsizing, or restructuring. Even when the answers you give aren’t exactly what people wanted to hear, giving straightforward responses inspires confidence, encourages loyalty, and helps employees overcome fear of the unknown.
Acknowledge – and appreciate – your team’s strengths. People tend to appreciate others who appreciate them. When change is coming, express your confidence in your staff’s ability to handle it productively, and thank them in advance for their willingness to adapt and for helping to make the transformation as smooth as possible. After the fact, show your appreciation – where deserved – for cooperation and a job well done. Not only will this make current changes easier for employees to swallow, it builds a basis of trust you can call upon the next time a significant shift is coming.

Change is seldom easy, but it is often necessary—and as the whirlwind pace of modern business shows, it is always coming whether we like it or not. Companies that not only survive but thrive are usually the ones that lay out the welcome mat for change, and which help their employees to do the same.

Do You Have a Handle on Health Care Reform?

The annual open enrollment period for Affordable Care Act health coverage has begun. This year marks the third annual ACA open enrollment to date, and Americans seeking coverage through either federal or state exchanges seem to have become reconciled – if not comfortable – with the process. The popular and media perception seems to be that the ACA has stabilized, and while occasional calls for repeal are still heard in Congress, the belief is that “Obamacare” is now a settled law, and a stable program.

This isn’t entirely true. To date, there have been 14 separate modifications to the Affordable Care Act since it was enacted. The most recent of these, the “Protecting Affordable Coverage for Employees (PACE) Act,” was signed into law by President Obama on October 7.

In other words, the law is still changing only a little more than a week before the open enrollment kicks off. Perhaps it’s understandable, given the complexity of the US health care coverage system and the multiple, labyrinthine layers of bureaucracy involved, but that is small comfort to small businesses who are still struggling to meet its complex requirements. Just when benefits administrators think they’ve gotten a handle on what the ACA demands of them, the ground shifts again – upsetting plans, projections, and budgets, in addition to creating outright confusion.

In fact, the PACE Act changes stand to have a direct effect on some 150,000 small to medium-sized businesses nationwide. Originally, businesses with 51 to 100 employees had been slated to enter a small group health insurance market next year; the result was likely to be an 18% increase in the cost of per-employee coverage. The PACE Act modifies this requirement, deferring to individual states to determine the size of businesses required to enter the small group market. While this is likely to mean cost savings for some companies, it will mean additional complexity for others.

Businesses will have to depend upon individual states establishing small group market guidelines – something they may or may not be eager to do given their individual political climates. In addition, companies doing business in more than one state are likely to find themselves subject to differing regulations for employees based in different states. This stands to make negotiations with any unions more complex, not to mention requiring special measures to prevent the perception of unequal benefits for different employees of the same status and type.

As is often the case, the PACE Act “fix” seems likely to generate more problems that will require fixing in future years. It seems unlikely that the ACA is going to achieve absolute stability any time soon; until it does, businesses will just have to learn to enjoy the ride – and be ready to adapt at a moment’s notice.

Have questions about how the PACE Act is likely to affect your business – or need help arranging affordable, ACA-compliant benefits packages for your employees? Trion would be happy to help. Contact us and one of our representatives will be in touch with you as soon as possible.

Major Insurers Leaving Small Groups Stranded

These are difficult times for benefits administrators—especially those working for smaller companies. Costs seem to endlessly rise; the regulatory environment continually changes; and a combination of market forces make it harder and harder to manage what seems to be an increasingly nightmarish health insurance marketplace.

Unfortunately, HR professionals aren’t the only ones finding the environment challenging. Major insurers are too—and it’s too the point where some major national companies are pulling up stakes and abandoning the small group market altogether.

This is a severe blow to smaller companies and their employees. There are fewer coverage choices available; those that remain offer diminished number of options, and plans are becoming more expensive. Employers are left with the unappealing prospect of signing on for higher-cost, lower-value plans, and then having to explain themselves to dissatisfied employees.

At Trion, we’ve been able to help some of these employers out. While remaining with a company’s prior insurer may not be an option, we are able to help companies abandoned by their insurer to find roughly equivalent plans elsewhere while containing costs—and sometimes even reducing them. The key is economy of scale: As a major Professional Employer Organization, Trion is eligible to obtain large-group benefits that are beyond the reach of small and medium-sized enterprises.

Access to a broad range of lower-cost large group plans enables us to offer client companies a range of benefit choices that are usually better than those they’d received from the insurers who had left them behind. Our larger size also gives us increased negotiating strength: We are able to leverage our large-group eligibility to attain more favorable terms and increased plan customization. As a result, clients often find that the disruption created by being “fired” by their insurer of first choice leaves them better off both financially and in terms of employee morale.

We don’t believe that it’s going to be particularly smooth sailing ahead in the insurance marketplace—far from it. Both larger and smaller insurers are caught up in a whirlwind of fast-paced change as the marketplace evolves, as new Affordable Care Act mandates come into force, and as industry consolidation takes place. Whether they like it or not, benefit professionals are going to have their work cut out for them as the ripple effect of these changes makes itself felt in their companies.

In our roles as our clients’ trusted consultant and as a PEO, it’s part of our job to try to make these types of changes ultimately work to the benefit of our clients, however initially disruptive they may be. We’re happy to help any company whose insurer has outgrown them find a solution that works for them, their employees, and their bottom line.

Getting Back To Business: HR Outsourcing’s Big Advantage

Running a business isn’t easy. As almost any CEO can tell you, doing their job right means doing several jobs right – and doing them all at once. All too often, many of these jobs consist of burdensome HR activities that don’t generate revenue, drive sales, or build competitive advantage, but which are nonetheless essential to daily operations.

As necessary as it is to keep on top of payroll, tax, regulatory compliance, workers’ comp and other activities, these do nothing to advance the business. In fact, the time devoted to them is time taken directly from strategy, promotion, revenue generation, relationship building, customer service and other core functions of a company. Time spent on administrative matters doesn’t just cost money – it costs opportunity. The attention, resources, and working hours devoted to these tasks isn’t used to create, innovate, expand, or sell – and the lost opportunity to do so may well be taken by the competition.

More and more, companies are recognizing the enormous burden that HR administration is placing upon them – and they’re doing something about it. Outsourcing is becoming a key element in many growing companies’ success strategies as they recognize the unique benefits it provides:

Efficiency. Outsourcing HR to a professional solution provider enables businesses to streamline operations and focus efforts where they matter most.
Economies of scale. Professional HR practitioners are an expensive, skilled resource; it makes more sense to leverage a shared resource than hire in-house personnel.
Limitation of liability. By outsourcing HR functions, companies can shift a great deal of legal and regulatory liability to the outsourcer, particularly in regard to Worker’s Compensation.
Expertise. The best HR outsourcing firms are specialists in what they do, with exhaustive procedural, legal, process and regulatory knowledge that few in-house departments can match.

Companies with outsourced HR functions quickly reap the rewards of this new management model – and the differences they see are reflected in their growth trajectories and their bottom lines.

A white paper published by the National Association of Professional Employer Organizations shows that companies that outsource HR functions experience a 9% higher employment growth rate than those that don’t. In addition, they show a 4% higher employment growth rate than in the overall economy.

At Trion, we’ve helped countless clients get their opportunity mojo back. We know from firsthand experience that for a company to succeed to their greatest potential, its senior management must remain focused on business-building activities. We make it our job to make that possible.

Is Your PEO Licensed? It Better Be

In the Human Resources field, September is significant for more than just the Labor Day holiday. For PEOs, it’s also the deadline for renewal of State of Michigan licenses.

Professional Employer Organizations operating within the state are required to receive their licenses by September 1 in order to remain compliant and to avoid an escalating range of significant penalties. Since the PEO licensing law took effect in 2012, the net effect has been a steady reduction in the number of PEOs doing business in the state. Increasingly stringent requirements and the need to maintain over $100,000 in working capital have forced many smaller and less reliable companies from the market.

While the numbers of less stable, less established PEOs have diminished as a result, a considerable number remain – including some that try to sidestep licensing, and the licensure requirements, altogether. Such companies typically work with a small number of employees and clients, and do their best to remain “under the radar” where regulations are concerned. They manage to maintain stable, longstanding relationships with their established clients – until suddenly they don’t.

When an unregulated PEO fails, the ripple effect can affect many people outside of the organization – most notably the PEO’s client. Apart from the considerable and immediate legal ramifications, a company can suddenly find itself saddled with a wide range of unforeseen obligations and burdens – liability issues, unpaid wages, unpaid premiums, unfiled paperwork, and more – that can put its very existence at risk.

The 2012 licensing law was enacted in an effort to prevent such scenarios. In the wake of some catastrophic PEO collapses prior to regulation, there was a broad consensus that something had to be done to protect workers and businesses alike from underfunded, incompetent, or unscrupulous outsourcing firms. The 2012 regulations sought to establish a baseline capability and quality standard for professional employer organizations, and the annual licensure provides a measure of protection for companies that entrust their vital human resource functions to outside providers. Companies that can’t or won’t meet the licensing standard undermine that protection.

Companies operating within the law have advanced the PEO industry, and have provided immeasurable benefit to the business community. Today’s best PEOs have helped their clients improve efficiency, improve compliance, and cut costs, helping to strengthen the business community as a whole. But “Caveat Emptor” – “Let the buyer beware” – still applies; where non-licensed PEO’s continue to operate on the margins, there is still the potential for disaster for client companies that neglect to do their due diligence.

Sure, the prospect of saving a few dollars, cutting a few corners, or not disrupting an established business relationship can be appealing – but an unlicensed PEO can be putting your business at mortal risk. Now more than ever, it’s essential to check a PEO’s licensing status before starting – or continuing – a working relationship. The licensing standards aren’t just some arbitrary bureaucratic hassle; they’re a vital layer of business protection, and can literally make the difference between stability and insolvency. So check out your PEO, and make the switch to a stronger, more stable, licensed company if you need to. The business you save may be your own.