“Liquor and Fireworks. What could go wrong?”
This is a sign outside a liquor store in Northern Wisconsin, advertising that they also sell fireworks. Separately, most times you will safely use each and enjoy a beautiful summer day. Together, however…well, you may not have the outcome you desired.
What’s the connection between “liquor and fireworks” and your practice? Let’s start with an assumption…you are an exceptional financial advisor, with a highly successful practice. Your clients are at the heart of what you do, and that’s where you’d like to spend your time. Your practice has grown, and you now have a staff of experts – some of them may be relatives, most of them colleagues whom you have chosen because of their backgrounds and knowledge.
Your core expertise is financial advice and client service. Your staff’s expertise…is financial advice and client service. You’ve always run the “business” side of the practice yourself or with an office manager. Now that you have a larger, more complex practice, ask yourself a few things. Are you an expert on payroll? Employment law? Legal entities? Benefits? Is anyone on your staff? In your desire to save money are you unintentionally about to blow up your practice?
It’s time to take a serious look at the real “cost” of running your practice, your return on investment in both time and money. Let’s start with the litany of everything you are responsible for as an employer:
- benefits compliance
- wage & hour
- employee classifications (exempt vs. non-exempt)
- employee classifications (common law vs. independent contractor)
- pension plan compliance
- paying your employees and contractors
- employee records and files storage requirements
- human resource compliance
- performance management
- claims and risk management
Even if you have only one employee, you must ensure that each of the above is done correctly. Add more employees (and independent contractors) and the amount of work increases exponentially.
How much time do you spend on payroll and administrative duties? How do you handle employee complaints? How do you keep up with changing regulations, withholding rates and government forms? More importantly, would you pass an audit if the IRS or Department of Labor walked through your door?
Small business owners spend about 25% of their time handling employee-related paperwork and issues. Is this the most productive use of your time? Let’s look at a couple of scenarios and see how they translate to lost time and revenue.
Let’s estimate your hourly rate at $200 (this equates to roughly $415,000 in annual revenue). We’ll start with something very minor but very common in your day-to-day practice: employees asking you about paid time off, or sick time questions, or other basic policies. Say you spend 15 minutes each answering questions four times a month, on average. Just an inconvenience? This equates to $2,400 of time lost you could have spent working with clients or growing your business.
What about something more significant, like a problem employee with a history of issues who resigns rather than improve his performance – and then files for unemployment benefits? You will have to create protest letters with supporting documentation, follow up with an Administrative Law Judge via phone and email, schedule and follow up on phone hearings, write appeal letters, and other tasks. Beyond the cost of your time (which will likely equate to the five figures), do you REALLY want to deal with this kind of thing?
So, you decide to outsource some things. How do you know if you are really protected?
It’s not enough to outsource certain things just to save you time. It’s critical that you outsource the right things to the right people! And that those people back you up in the event something goes wrong. How do you estimate the financial value of holding someone else responsible for the work they do for you?
To be more specific, let’s use a real example. An EmployShare client’s attorney decides they are better crafting offer letters than EmployShare (this happens a lot). They create an offer letter for a new receptionist – not a high wage earner, not a big deal, right? Wrong. Their offer letter contained an insinuation that the company gave annual $10,000 bonuses. Guess what happened? The employee was let go for non-performance, went to her attorney…and our client had to issue a check to her for $10,000. Words mean things. Every word has a reason. You need employment law specialists who are experts on state laws, laws that are regularly updated and may affect your next offer letter.
Is it worth the time and money for a practice owner to run their own HR function? EmployShare’s number one priority is protecting what you have worked so hard to build. We understand how important every employee is to the success of your business and we want to eliminate work that is non-revenue producing. We can be your one point of contact for all administrative operations.
Contact us. We’re here to help.
Dan D’Alio, President
A single source solution to manage and protect your practice