As a small business owner, you’ve likely had plenty of experience working every aspect of your business, from accounting to operations to recruitment and beyond. This “one-person show” mindset is often a financial necessity in the early days of your business. However, as soon as your company begins to grow, you should consider reaching out for help in areas where you lack expertise.
You’re an expert at the services and products your business provides, and that’s where the majority of your attention should be. Splitting your focus across half a dozen headache-inducing business burdens doesn’t save your business any money. It makes you more likely to make mistakes and causes unnecessary stress. On top of that, multitasking actually makes you accomplish less.
You can better support your business and yourself by identifying the areas of your company that benefit most from your attention. Whether your talent lies in networking with potential clients, managing cash flow or marketing, you’ll be more effective if you devote your time and energy to the responsibilities you’re best suited to.
Small business owners often struggle in five particular areas: Employee benefits, human resources, payroll, retirement benefits and worker’s compensation. It’s no surprise that these all have significant traits in common. They’re all complex, time consuming and stressful.
We will walk you through the importance of these five areas to the success of your business, the common complications small business owners face with each and how outsourcing them can save you time, money and stress.
Employee Benefits: Meeting Employee Expectations for Coverage and Communication
To say the past year and a half has been stressful for everyone is an understatement. The pandemic has caused an enormous amount of change in people’s personal and professional lives, and it has sent stress levels soaring. Employees are more concerned than ever about their health and mental well-being.
In a 2021 Metlife survey, 72% of employees reported that they felt more concerned about the protection and safety of themselves and their families than they ever have before. This increased level of concern means that employee benefits are of the utmost importance to employees. Not only do they want comprehensive coverage, they expect employers to do a better job of explaining how those benefits can be applied to their lives.
Over 30% of employees feel that their employers are not effective at communicating the value of their insurance benefits. When employees don’t understand how their benefits fit together to support their well-being, they’re much less likely to use them. It also increases the chances that they will seek out better benefit options with another employer who can help them put their benefits to work.
It’s no longer enough to provide employee benefits to your workforce. You must be able to make it easy for employees to understand their coverage and use those benefits. This poses a significant challenge for employers because insurance is notoriously complicated. To meet the increased expectations of your employees, you will need to spend time going over coverage for your medical, dental and vision insurance, as well as any other type of coverage you offer such as disability or life insurance.
Just the task of reading and fully understanding the ins and outs of your insured benefits is a monolithic challenge. On top of that, you have to effectively communicate the value of those benefits to employees by explaining how the different lines of coverage work together to support them. These two tasks alone can eat up an enormous amount of your time, not to mention the additional stress they add to your workday.
While you diligently work on this, what other important responsibilities are falling through the cracks? Unless insurance is your area of expertise, taking this on yourself is not an efficient use of your time. Find a provider that specializes in a range of insured products. They can help you select cost-effective plans that provide the benefits your employees want most, and they can help you communicate the value those plans offer.
Payroll: Staying Compliant and Maintaining Accuracy
No matter how loyal an employee is or how enthusiastic they are about their job, they’re there to get paid. Submitting payroll late or making any mistakes that negatively affect employees’ pay are two of the fastest ways to upset your staff and bring productivity to a grinding halt.
There are innumerable ways to make mistakes when it comes to payroll. You have to account for taxes, 401(k) contributions, insurance deductions, correct hours and more for every employee’s paycheck. Avoiding errors requires your undivided attention, and if you slip up, it can cost you. Aside from upsetting employees, payroll mistakes can result in serious tax penalties. In 2020, the IRS issued over $6 billion in employment tax penalties.
Another knock against doing your payroll solo is that it can never be rescheduled. With your many business responsibilities, you likely reprioritize tasks often to provide the flexibility you need. Unfortunately, payroll doesn’t provide any leeway in that area.
Software can sometimes ease a little of the pain involved with payroll, but it comes with a steep learning curve. Even with special software, it’s still easy to make payroll mistakes due to complex user interfaces.
Handing payroll over to an outside agency will ease a huge amount of recurring stress and free up your time. It’s a wise investment that will bring in considerable ROI. With this taken care of, you can turn your attention to the numerous important tasks that always pile up while you’re normally toiling over payroll.
Human Resources: Creating a Healthy and Compliant Work Environment
Human resource management encompasses a wide range of responsibilities, but some of the most common are employee policies, internal communications, compliance and recruitment. Considering that the recruitment process alone takes several weeks and scheduling one interview can take up to two hours, it’s easy to see how managing even a single aspect of HR can eat up your time.
It’s hard to overstate the importance of providing quality HR services for your business. Developing company policies and an employee handbook help guide the culture of your office and lay the groundwork for the way employees should conduct themselves. They also protect your business in the event of an employee complaint about harassment or any other type of misconduct. Having strong policies in place makes it clear what behaviors are expected, the process for reporting issues and the penalties associated with poor behavior or performance.
Internal communications is another essential component of human resources management. Employees today expect regular communication about benefits, policies, new hires and anything else that impacts their work. Reliable internal communications make employees feel involved, informed and motivated, and that directly affects the quality of their work.
While HR duties such as company policies and internal communications are vital to running a healthy business, there’s no escaping the enormous amount of time required to develop and maintain these. Human resources is a full-time job in itself and often calls for an entire department of employees, so it makes sense for small business owners to outsource it.
Business owners who try to juggle the multitude of responsibilities that come with HR management open themselves up to compliance issues and potentially even lawsuits from employees. Outsourcing these duties will provide a huge relief to overwhelmed owners and give them peace of mind.
Retirement Benefits: Ensuring Maximum ROI on 401(k)
A 401(k) plan is an excellent retirement benefit to provide employees. Combined with health insurance benefits, it makes a very attractive offer that will help you recruit the top talent you need for your business.
However, managing a retirement plan for employees is a lot of work, especially if you don’t have prior investment experience. You have to decide which type of 401(k) will work best for your employees, monitor performance, educate employees on your process for selecting funds and maintain detailed records.
Outsourcing your 401(k) management is a huge help for business owners, and it’s better for employees. A professionally managed 401(k) brings in an average of 3.32% more returns than one that doesn’t have an expert watching over it. Considering that many small business owners have the same retirement plans as their employees, that’s even more motivation to ensure you get the maximum ROI on your 401(k) plans.
It’s also important to consider your company’s policy about matching employee 401(k) contributions. While not required, contribution matching is an enticing bonus to add to your employee benefits package. An agency can help you weigh the pros and cons of offering this and how much your company may be able to match if you choose to do so.
Worker’s Compensation: Deciphering Complex Insurance to Support Injured Employees
Worker’s compensation is a requirement in most states, though the laws vary considerably. Even if your state doesn’t mandate worker’s comp insurance, it’s a good idea to look into this for your employees.
Of course, you want to ensure you provide as safe a work environment as possible, but accidents can happen at any time. Your staff is your most valuable resource, and it’s critical that you provide them the support and financial security they need to recover if they are hurt on the job.
Few workers inquire about the details of worker’s compensation when starting a new job, but the moment they get hurt, they’re going to have many questions. You can expect an onslaught of questions such as, “What percentage of my salary will I receive?” or “If my injury is permanent, what ongoing disability benefits do I qualify for?”
Like all types of insurance, worker’s compensation is complex. There are rarely easy answers for these questions or any others your employee is likely to ask. Most solutions will depend on the circumstances of the work injury, so everyone’s case will be different.
Being hurt on the job leaves employees in a vulnerable position, and it’s important that you can answer all of their questions confidently and without hesitation. To do that, you have to have a deep understanding of worker’s comp rules and regulations. It’s much easier for small business owners to outsource this to an agency that specializes in this type of insurance. They can give the support your hurt employee is looking for. Emotions can run high during times like this, and an outside agency provides an objective perspective on the claim.
Get the Support You Need to Grow Your Business
There’s no need to go it alone in your business. Small business owners can increase the efficiency of their employee benefits and back-office operations by outsourcing some of the more complex and time-consuming tasks they oversee. Instead of looking at outsourcing as an expense, see it for what it really is — a smart, cost-effective investment.
Many business owners feel that it’s more cost effective to do as much work as possible themselves, but this is short sighted. Stress and burnout often plague entrepreneurs because they have too much on their plates. As the impossibly long to-do lists and constant multitasking begin to wear you out, you become increasingly likely to get sick or lose the energy and motivation required to stay on top of everything.
In addition to the loss of productivity and decreased well-being, your stress levels greatly impact your employees. It’s important to set a positive example by knowing your strengths and weaknesses, taking time to look after your mental and physical health and asking for help when you need it.
Many small business owners assume that outsourcing is something only large organizations can do. That couldn’t be further from the truth, and this false idea limits your company’s growth. The time to outsource is now, before you get burned out and lose the passion that inspired you to start a business in the first place.
Protect your business, your employees and your health by strategically investing in an agency that can help you with the most complex parts of your business.
To find out how Best Employer Solutions can support you and your business goals, contact us today.