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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!

Tags: Engaged Workforce, Payroll

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