Think about your typical day as a business owner and employer. You are running a business – perhaps a veterinary office, an accounting firm, a construction or engineering company, or maybe a marketing agency. You have clients and customers to keep happy and a workplace to run.
As your business grows, you add employees and start to think about how you can streamline your operations. The administration side of your business starts to take more time – processing payroll, filing paperwork with government agencies, and paying taxes.
Handling the administrative side of being an employer is…a lot. There is a reason large firms have human resource departments! Thankfully, there are companies and software systems out there to help you process payroll and handle every aspect of leading your employees including managing any benefits package you choose.
With all these options, how do you know which one is the right one? Today we’re discussing payroll companies and how benefit brokers like ABS collaborate and work alongside them.
What is a Payroll Company?
A payroll company is a service provider (often called a PSP – Payroll Service Provider) that either assists with, or manages every aspect of payroll on behalf of another business. They handle all the payroll calculations, typically using technology to accurately and automatically calculate payroll processing and ensure it is delivered to the employee on schedule.
Payroll companies bring tremendous value to the table for employers because they simplify the payroll process. Ensuring payroll is accurate, on time, and meets all current regulations can be a tedious process even for a company with a few employees. They take care of withholding contributions for Medicare and Social Security. Payroll companies can automate unemployment taxes, workers compensation, and help business owners keep track of hourly rates and overtime pay for employees.
Doing all these tasks manually is an inefficient use of time and resources in our digital age.
The Best Results? A Payroll Provider AND Employee Benefit Brokers Provider
Because there are so many aspects of employee management, it can be a little confusing trying to figure out who you need to hire to do which tasks.
Do you need a payroll provider and an employee benefits administrator? Our answer is yes! Many of the companies we work with find the best results when they work hand-in-hand with a dedicated payroll provider and an employee benefit brokers company.
We all work within the same ecosystem, so while we can’t live without the payroll companies, they can’t live without insurance brokers like us!
The Value in Using a Payroll Company
In short, payroll companies provide an effective option to automate and streamline much of the administration of running a business, such as:
- Make sure the payroll is processed on time
- Handle all compliance matters at both state and federal levels
- Oversee new and existing direct deposit accounts
- Ensure accurate payroll tax and deductions
- Generate reports and payroll records and distributes them to employees
- Enable time tracking for each employee
Popular companies that offer payroll services include ADP, Paycor, Gusto, and Paychex. Chances are, you probably use one of these companies or you’ve heard of them if you have spent any time looking for a payroll service provider.
Most of these services charge a flat monthly rate depending on the features you include, coupled with an additional fee per employee. If your time is better spent on core business operations instead of calculating payroll, your small business should have a payroll service provider.
Collaboration Matters with Your Payroll Company and Benefits Administrator
Payroll companies may offer attractive additional benefits like an HR module to automate the process of onboarding and training employees, or an employee benefits module to administer your employee benefits from medical benefits to retirement plan contributions.
While these additional benefits sound like an easy way to handle every aspect of employee administration, be leery of payroll companies who encourage you to use only their services and no one else. Without collaboration, decisions are made in isolation and unintended consequences could be detrimental.
When you’re hiring a payroll company, consider asking these questions:
- What is your process for working with other professionals?
- Will you integrate with experts in other service areas?
Each one of us are experts in our own area, and benefits can be complex. A professional partnership where clients have the opportunity to consult their support teams creates the most optimal environment for efficiency and cost-savings. It truly takes a village!
The ABS Way: Personal Service for Employee Benefit Brokers
We partner with employers to truly understand what is best for the employer. That includes helping business owners find a payroll company that will meet their needs and integrate with the benefit brokers services they need.
We want to hear about your goals for your employees, the goals you have for your business, and more about the specific needs of your employees and their demographics. Then, we search the entire market for plan options that will meet your objectives.
4 Reasons Why You Might Not Want to Buy Insurance from your Payroll Provider
1. Customer Service
Payroll companies typically have a 1-800 number for clients to call instead of a direct line to someone who can help them file a claim and understand their benefits.
When your employees need help, claims issues can be complex. Time is of the essence for communicating efficiently and effectively. Payroll companies are huge. ADP alone states they service over 700,000 customers! When you have an employee with an issue or someone who needs help with a claim, you may not be able to get the response you need quickly.
2. Many Payroll Companies Do Not Quote All Plans
The efficient path for a payroll company is to renew your plan as-is. Even though that is efficient for a benefit broker as well, we know that our job is to find you the best plan and price on the market. However, many payroll companies will not quote certain carriers, nor plan types (like level-funded).
3. It Could Cost You More
Payroll companies like to talk about their negotiating power. The truth is that while you might benefit from this up front in the first year, payroll companies are receiving steep commissions for delivering thousands of customers to their preferred insurance carrier.
4. Payroll is Their Core Business
We have a very specific set of knowledge that has taken us years to hone and understand. Payroll companies are great at their core business: payroll! They may not have the expertise and information to guide you through the benefits process. You may not even know what you qualify for or what options you have available to you in a crisis scenario.
A quality, experienced insurance broker like Advanced Benefit Solutions will act as your advisor for the entirety of your benefits journey. When you need to select new coverage or resolve claims issues, we will pick up the phone and handle it.
The Bottom Line
Some payroll companies treat benefit brokers like a simple add-on service. In our experience, clients have the best results when payroll companies integrate their services with other service providers and we all collaborate effectively for YOUR benefit!
Using your payroll provider for your employee benefit brokers is a move that might save time, but in the end it may not add value to your business. If you’re looking for a more personal approach, reach out to Advanced Benefit Solutions to build a benefit program that is customized for your company and the needs of your employees at (800) 291-2009 or contact us today.
