Payroll

We will explore the challenges of multi-country payroll, from tackling cultural issues to handling smaller country populations, including:

– Payroll Data
– Assessing Strategic Options
– Planning for Transformational Change- Payroll Strategy,
  Business Planning & Vendor Selection

Resource Guide: PEOs & ASOs Case Study

Outsourcing helped a legendary Florida Keys resort reduce workers’ compensation claims.

by Scott Simmons

Holiday Isle Beach Resorts and Marina is a sprawling four-resort complex that includes hotels, restaurants, shops, recreation, and entertainment in Islamorada, Fla. We have more than 275 employees and all the complex payroll, risk, safety, and human resource issues that come with such an expansive seasonal organization.

FINDING CALM IN THE CHAOS
We first began utilizing professional employer organizations (PEOs) several years ago as a resource for reduced workers’ compensation rates. We had to go through a number of PEO relationships, however, before finding the right outsourcing group that took the time to partner with us to establish compliance procedures that would really get a handle on reducing costs. It got to the point where our average annual costs for compensation claims was well into the six figures. And that was before September 11th. 

The entire hospitality industry experienced considerable loss in occupancies and halting reservation projections during the latter part of 2001. Rising claims costs and the severe drop in revenue could have spelled disaster for what has become something of a legendary resort (not to mention our “world-famous” Tiki Bar). Thankfully, by that time, we had signed with AlphaStaff. 

AlphaStaff is a PEO that already had customers in the hospitality industry, so they understood the destabilization that we were experiencing after 9/11. Plus they established processes for our resort community that forced us to review how we trained our employees on safety and human resource issues and how we approached our staffing in general.

SURVEY SAYS
A detailed survey of our health and safety programs revealed a number of improvements that could be implemented to create a safer working environment and control costs. AlphaStaff laid out causation factors for claims from the past three years. They presented a loss control service plan–complete with goals, target dates, and formal reviews. They even sent our head of security to a three-day safety management class so he could better understand the processes. He returned enthused and ready to work hand-in-hand with our outsource partner. 

Such safety programs do not even address everything our outsourcer offers in regard to payroll, technology integration, and human resource management, as well as their disaster preparedness in the face of hurricane devastation, which is extremely important for any business located in the Keys. They helped us establish “best practices” with reporting payroll and provided reports for auditing that ensured our employees are accurately compensated. They have provided training on documentation for new hires and other required documents for account maintenance, and supplied customized reports to assist with our GL accounting. They keep us informed of any new HR laws, such as the recent FLSA changes, to ensure there’s no negative impact, or at least that the impact is mitigated. But it’s their focus on safety that reduced our claims cost from a couple hundred thousand dollars in years past to less than $50,000 in 2004 and projecting to almost half that amount in 2005–more than an 85 percent drop in claims.

SAFETY FIRST
Possibly the most beneficial aspect to this particular outsourcing experience was how extremely interactive our PEO was with our employees. They made sure that everyone, from our senior management to our janitorial staff, understood their contribution to maintaining a safe work environment. AlphaStaff made safety education a priority and engaged with every department until the entire organization was on board. An additional benefit to this employee focus has been a significant increase in employee retention. The heightened awareness of all safety issues has proven to be a wonderful demonstration of how much Holiday Isle values our workforce, and our employees have responded appreciatively. 

All PEOs are not created equal. But if a hospitality, or any, organization can find a vendor that takes so much interest in reducing risk and touting safety throughout the company like AlphaStaff has done for Holiday Isle, we would recommend they sign on immediately. Then maybe the HR manager making such a cost-conscious decision on behalf of their organization can reward themselves with a trip to the Florida Keys, of course!

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Gecis Global Adopts Genpact Name, Touts Growth

One of the heavyweights in the enterprise outsourcing market, New Delhi, India-based Gecis Global has changed its identity to Genpact. The former GE unit said the change was to better convey its global scope.

            We chose [the new name] because it so aptly communicates our brand promise generating value, commitment, partnership and impact, said Pramod Bhasin, president and chief executive officer, Genpact

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THE PROTECTIVE GROUP ENLISTS ALPHASTAFF TO ACT AS THEIR HUMAN RESOURCES PROVIDER

Growing Defense and Safety Contractor Sought Partner to Upgrade All HR Functions 

BOCA RATON, FL September 21, 2005 The Protective Group, Inc., a Miami-based company specializing in the manufacturing of personnel protective material for use in military, security and firefighting applications, and AlphaStaff Group, Inc., a market leader in Human Resource Outsourcing (HRO), today jointly announced that they have entered into a partnership through which AlphaStaff will provide the Protective Groups more than 200 employees (including its subsidiaries of Protective Materials and Chieftain Safety) with critical support in all areas of human resource administration

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ADP TotalSource Introduces Health Savings Accounts Through JPMorgan Chase

HSAs Help Business Owners and Their Employees Control Health Care CostsMIAMI–(BUSINESS WIRE)–May 31, 2005–ADP TotalSource, Inc., oneof the nation’s largest Professional Employer Organizations (PEOs),and part of the Employer Services division of ADP, Inc., todayannounced it is expanding its benefits program to offer health plansthat are compatible with health savings accounts (HSAs). EffectiveJune 1, 2005, clients may select HSA-compatible high deductible healthplans (HDHPs) as part of the comprehensive suite of health benefitsoffered by ADP TotalSource, Inc. Clients who elect an HDHP through ADPTotalSource, Inc. will make their worksite employees eligible toestablish Health Savings Accounts (HSAs) through JPMorgan Chase BankN.A., a leading provider of HSAs.

HSAs, which were authorized by the Medicare Prescription Drug,Improvement and Modernization Act of 2003, are portable health savingsaccounts that individuals can use to pay for qualified medicalexpenses.

“With health care costs far outpacing wage growth during the pastseveral years, employers large and small are challenged to provideaffordable coverage,” said Carlos Rodriguez, ADP TotalSource’sdivision president. “We’re regularly evaluating benefits that we canoffer to our clients to help them attract and retain the bestemployees. The availability of HSA-compatible HDHPs means thatemployees will be eligible to establish HSAs, and this will provideour clients and worksite employees with a means for reducing theoverall cost of health insurance while encouraging employees to besmarter health care consumers. To help our clients decide whether theHDHP/HSA option is right for their business, we offer access toexpertise from our human resources representatives and a variety ofself-service decision support tools, including cost calculators,educational Web casts and plan comparison tools.”

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SCI COMPANIES EXPANDS IN INDIA AND U.S. TO PROVIDE TREMENDOUS GROWTH CAPACITY

TAMPA, Fla., May 19, 2005 – SCI, a national leading Professional Employer Organization (PEO), announces the opening of a new office in New Delhi, India, and the expansion of its Atlanta operation center. The expansion comes as the company scales to meet increasing demand for outsourced human resources (HR) services

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Duke Energy Inks HRO Contract with Hewitt

CHARLOTTE, N.C. — Duke Energy today announced that Hewitt Associates, a global human resources services firm, has been selected to provide comprehensive HR back-office administrative services to the companys U

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NY HR Week 2005 Trumps Expectations – Up 32% to 3710 Registered Attendees

HR Executives In Record Numbers Attend HR Conference —

Top Issues Include Outsourcing, Diversity, Benefits & Technology

Milford, CT,April 20, 2005 NY HR Weeks conference directors today released recordattendee totals for the 2005 NY HR Week held April 12-14, 2005 at the New YorkHilton, making it the nations second largest HR event. Registered attendeestotaled 3,710, with conference attendees numbering 706.  The totals represented a 32% increase overthe 2004 totals, and included a record 106 media attendees.

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PwC: Almost All Fast-Growth Companies Outsourcing HR Functions

PricewaterhouseCoopers Trendsetter Barometer interviewed CEOs of 360 privately held product and service companies identified in the media as being among the fastest growing U

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Case Study: Lifestyles of the Rich and Outsourced

Multi-million dollar Anderson Companies still likes to save money through HRO.

by Marsha Kendall

 

The Anderson Companies are a real estate development operation focusing on recreational and residential communities. Founder Lyle Anderson defined this market in the early 1980s with the creation of exclusive golf communities in north Scottsdale, Arizona. Current properties are located in Santa Fe, New Mexico; on Hawaiis Kona coast; east of Phoenix, Arizona; and Scotland. With a variety of business interests in luxury homebuilding, golf-related enterprises, and investment properties, the HR department had to juggle numerous employees in different regions and with different needs. It made Anderson the perfect candidate for outsourcing.

 

Our employees serve a very sophisticated clientele, explained Bill Siwek, executive vice president and chief financial officer for the Anderson Companies. In choosing an HR provider it was critical that we partner with an organization that understands our business as well as treats our employees the way we expect them to treat our members.

 

Andersons initial needs were the consolidation and standardization of accounting and payroll functions. However, after re-evaluation, the opportunity for full service human resources and payroll outsourcing was present. In late 2002, Anderson partnered with Core3, Inc., a provider that specializes in human resources, payroll, finance and accounting, and information technology outsourcing for the mid market, with shared service centers located in Phoenix, Arizona and Delhi, India. The company chose Core3 because it provided every level of service from field support for the Anderson Companies employees and management to strategy, recruiting, training, and transaction processing, as well as access to a Phoenix-based shared service center.

 

This is a unique delivery model in that the client wanted to maintain employee visibility to HR on a daily basis, while improving the quality of the function and reducing costs. The provider has on-site staff who are committed to employee and management support, while all strategy, development, and the majority of transaction processing are handled on a centralized basis at the providers shared service center.

 

The first-year results were impressive. Employee satisfaction with HR grew from 74 percent at the start of the relationship to 92 percent by the years end. Accuracy in benefit administration rose from 64 percent to 100 percent in the same time frame, and payroll accuracy has consistently exceeded 99 percent each month.

 

Special projects during the first year included the introduction of a standardized HR Policy Manual, new employee handbooks in both English and Spanish, new hire orientation, customized trainings, and the standardization of job titles and job descriptions, thus reducing titles by more than 20 percent. In addition, through a combination of field and support staff, the service provider was able to successfully partner with two Anderson Companies properties and increase staffing by more than 30 percent to handle the seasonality in the business. Equally important, the outsourcing relationship contributed to the reduction of HR/payroll costs by more than 20 percent, and impacted other related costs, such as a 40 percent reduction in legal fees and tighter controls for severance and relocation packages.

 

These accomplishments were driven by the providers combination of HR expertise, experience with global models, and comprehensive set of delivery tools. Core3s familiarity with global delivery allowed it to take the model a step further and understand the challenges and opportunities surrounding the support and management of thier own employees placed at client sites. Daily calls, weekly phone conferences, and regular site visits, are some of the tools they have has utilized to create a sense of team with its HR staff assigned to this relationship. In addition, through tools such as CoreSupport, the HRO companys new issue identification, management and resolution tool, Core3 has up-to-the-minute access to employee issues and concerns. This information allows them to ensure a timely and consistent response at the property level, report to client executives on the specifics surrounding a particular employee issue, plus identify trends for proactive workforce management.

 

Core3 has enabled the Anderson Companies to focus on our core competencies related to real estate development by addressing all our employee related issues. They truly understand our business and continue to deliver innovative solutions to support our success, concluded Siwek.   

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The Super Seven

Mid-market HRO rules and tools.

by Harry Feinberg

Are you a mid-market company with 1,000 to 10,000 employees? If so, youre probably outsourcing specific HR functions to specific providers, for example payroll to ADP, benefits administration to Fidelity, and other processes to other specialists. And yet, if you are reading the pages of this publication, you know theres a better way to be outsourcing your HRhanding all functions to one multi-process provider.

 

Each month, you have read HRO Today cover stories about the largest, global companies engaged in HR business process outsourcing (BPO) dealscompanies such as Sun Microsystems and Proctor & Gamble. You have read about how these companies are reducing costs, gaining expertise, and becoming more strategic. You know as an HR professional that your mid-market company needs the same strategy as the big guysso why are you handling your HR outsourcing differently?

 

With more than 20 million employees in the U.S. midmarket, you can bet that the largest HRO providers are gearing up and equipping their companies to make standardized offerings available so that they can move down stream and start serving the mid-market organizations (admittedly, to make a bucket load of profit). Taking the opposite approach are the service providers known as professional employer organizations (PEOs), looking for a way to take their co-employment model, traditionally designed to serve the small company market, and move upstream to the mid-market (again, seeking profits from the same bucket). These two different approaches have both pros and cons for the potential buyer. So when shopping for an HR BPO provider, it is important to know the service providers model and remember these rules to steer your efforts in the right direction. Here are the seven shopping rules and tools you need to keep in mind when browsing for a service provider in the mid-market.

 

Rule # 1:

Shop in the right shopping mall. Attend HRO World, April 12-14, at the New York City Hilton Hotel. All the providers will be there, all in one place, and all at the same time.

 

Rule # 2:

Seek out the most scalable mid-market provider and you shall find that it is the one that has mastered the art of systems standardization. Multifunction standardized outsourcing that integrates HR and finance and accounting will reduce your costs and reduce your need for managing more than one provider. Standardization allows providers to leverage infrastructure and implement more quickly, more effectively, and at less expense. Be prepared to take on the providers process and change yours.

 

Rule # 3:

Shop for the innovators. They are the ones that created this industry and are doing the most valuable things in HRO.

 

Rule # 4:

Talk with some of the big guys. When we say big, we mean enterprise-level, like Accenture and Aon for example. The big guys are starting to smell the sweet opportunity of mid-market HRO and have begun to move downstream. The large-company market is getting saturated. Analysts are saying that the demand for smaller sized BPO deals of less than $100 million is extremely high in the United States.

 

Rule # 5:

Look for a stellar client reference list from providers. And call them all.

 

Rule # 6:

Determine your HR goals and know your HR metrics before starting your search or outsourcing transaction, so that you can effectively measure cost saving with provider prospects. Know thy annual cost of HR per employee.

 

Rule # 7:

Shop til you drop, or use a sourcing consultant to help show you a more sophisticated way to shop. In fact, think of sourcing consultants as your personal shoppers, but remember they will cost you.

 

Using these rules and tools as your starting point in your search for a mid-market HRO provider will help ease the pain. And as you continue your search and start to add your own rules, please e-mail and tell us about what you are learning so that we can pass on your knowledge to other readers of HRO Today magazine. And, if youre at the HRO World conference and expo and bump into me, please let me know how helpful the super seven are when shopping on the trade show floor.  

 

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