Simplifying Payroll: Why Smart Contractors Are Turning to PEOs | Buying Local #69

00:00:00:12 – 00:00:16:00
Speaker 2
Welcome to Buying Local. I’m your host, Mike Nelson from Five Towers Media. Joined by Nick. You know, I’m going to mess up. I’m going to try it though, Nick, because I often I often don’t even try. But we’re going we’re going to try. Nick. Scrub scrub scrub.

00:00:16:02 – 00:00:25:05
Speaker 1
But that’s perfect. This a lot worse. So I will I I’m good with it. You did a good job. Like, we’ve been hanging out too much. Okay.

00:00:25:07 – 00:00:27:05
Speaker 2
How do you how do you how are you supposed to say it?

00:00:27:05 – 00:00:28:16
Speaker 1
Nick Koroma.

00:00:28:18 – 00:00:29:21
Speaker 2
Scurll okay.

00:00:29:24 – 00:00:34:18
Speaker 1
Okay. My main relatives, it’s great. They like they use the Ukrainian.

00:00:34:20 – 00:00:54:24
Speaker 2
The UK yeah, but it’s funny because anyone that listens to the show often enough knows I almost never attempt to save you. Like the last episode I recorded with an old friend of mine, Jacqui Aquia. Damn it. Sorry, Jack. But I, I don’t know why I struggle so hard with names, man, and I hate butchering them, but I guess it’s.

00:00:54:24 – 00:01:07:23
Speaker 2
I guess it’s my thing here. It’s my shtick. So, Nick, you’re you’re with a, a company and, called people Ease. And I’ll let you explain, what people is and what you guys do over there.

00:01:08:00 – 00:01:33:14
Speaker 1
Yeah. No. Absolutely. Yeah. So we’re a professional employer organization, but we’re unique in the industry. So majority of the CEOs or ATMs, companies, they’re going to be more about benefits, and focus on that piece. We’re, we’re we’re work comp driven. So we’re, up to each of the blue and gray collar. We’re not we can’t write white collar, but we’re not interested in taking a $10 per 100, code like an 88.

00:01:33:14 – 00:01:53:10
Speaker 1
And we want the more, tougher codes that it’s going to cost employers a little bit more to have, electrician or a construction worker or a laborer. We want those because we can really show a great value, not only on the savings, but on the services behind that.

00:01:53:12 – 00:02:00:08
Speaker 2
Very nice. And now, people, these is a regional company, right? Is it like East Coast? I think.

00:02:00:10 – 00:02:37:11
Speaker 1
Now. Yeah. We’re national. We do operate in all 50 states. And from, you know, East Coast to the West Coast. And I happen to sit here right in New York, where this is where I’m from, actually grew up in New York. That’s where I graduated high school and stayed in New York, went to Suny Potsdam, and then, after, you know, after college, I did some, did some travel up in various areas, lived in Vermont, Boston, Florida, outside of Philly, and then came back, here in 2018 and to 2018.

00:02:37:13 – 00:03:01:05
Speaker 1
I was just chasing promotions and chasing money really is what I was doing. But, you know, I fell into this industry, in Florida, and it was new to me. But I just saw the impact that it has on the business owners. Yeah. Not only have I seen them blow out their five, ten, 15 year goals, after we became clients of ours or mine.

00:03:01:07 – 00:03:19:11
Speaker 1
But I just seen it just make their lives easier. And, I’m seeing that and selling into all of the big cities that I, you know, just name. I was like, that can work here, too, in this area. And that’s, that’s that’s really my main focus.

00:03:19:13 – 00:03:34:11
Speaker 2
Well, you know, you pass the first test for proving that you’re local. When you said Corinth. So, you know, that’s, everybody knows now, right? They’re like, okay. Yeah, he’s definitely a local guy for sure. Yeah. Just,

00:03:34:13 – 00:03:37:11
Speaker 1
They thought whatever. Yeah.

00:03:37:13 – 00:03:58:00
Speaker 2
So, you know, let’s talk about POA because it is I still think there are a lot of business owners that don’t necessarily understand POA, what it is, what it does, why they would want that as opposed to going a traditional route with their employees. Can you can you kind of give us the rundown on that?

00:03:58:02 – 00:04:38:08
Speaker 1
Yeah. Yeah. So most POS there’s there’s four really or pieces that it’s going to be it’s one’s going to be the worker’s comp. It’s going to be payroll, it’s going to be compliance. And then it’s going to be your, your support, whether that be benefits or, or any other type of, support that you need. But it’s just relate to employees that what, what makes it nice is that the back office things that need to be taken care of, like making sure that your payroll taxes are paid on time, making sure that your handbook is up to date and has the most, recent law changes, and Covid, we saw

00:04:38:08 – 00:05:00:08
Speaker 1
so many different laws go into place during that time just because we’re living in a different world. Right? And people aren’t owning the office, they’re remote. So now these office workers now have to have some sort of telecommuting, policies. So these things change and these laws change frequently, and they’re not really necessarily in the news all the time.

00:05:00:10 – 00:05:24:12
Speaker 1
Things like hairstyle. You know what what what determines discrimination. Now, there’s different things that used to be just sex, age, religion, sexual orientation. Right. Where the main. But there’s some others that fall into that. So, people, these allows you not to worry about that, and just worry about driving your business. And that’s what you the majority of the business owner has gotten the business to.

00:05:24:13 – 00:05:46:05
Speaker 1
As to run a business because it’s something that they like to do. And they want to continue to grow. So we, we offload that for you, and let us handle the back end that pops stuff. And then it’s a one call, one, one call versus making four calls or five employees. Right. Who has my worker’s comp?

00:05:46:05 – 00:06:00:06
Speaker 1
Oh, I got to call, and we just had a claim. Who’s who’s who’s my CPA. I gotta make sure that they file my taxes. Right. One call support team, just really makes makes makes life easier.

00:06:00:08 – 00:06:28:15
Speaker 2
Yeah. Which I know. Speaking as a business owner, we all like our lives to be easier. And I feel like we’ve been, you know, the age that we’re in business wise, that the that outsource solutions like this are becoming paramount to the success of organizations. You know, where years ago you used to try to in-house or you’d have a business owner like myself with a small team, they’d be trying to do all the work and, and probably not doing it correctly or doing it.

00:06:28:15 – 00:06:38:22
Speaker 2
Well, I think every time I talk to you, you say something to me. I’m like, oh, I don’t know if I’m doing that. Actually, I, you know, there’s a lot to worry about, right?

00:06:38:24 – 00:07:05:11
Speaker 1
And the majority companies will, even if they do hire an internal person, that HR person is more like an HR general manager. Job is to answer the employee’s questions and to the satisfaction of the businesses required. Right. They’re really not there. That process payroll really not there. Don’t worry about the the the the taxes change the the fucking rate change the federal unemployment accurate state income.

00:07:05:13 – 00:07:27:11
Speaker 1
Those things are not that’s really not what they’re meant to do. Which is who are the people you assume are such a unique people that we have no no issues. You know, working if you did have a third party, say you had a TPA or you had a bookkeeper or a CPA that, you know, that did process your payroll, we had no problem getting access to the information that they need.

00:07:27:13 – 00:07:45:23
Speaker 1
Based off of what you tell us to give them access to, or some come in and they’re like, hey, you can get rid of your entire department. We’re not like that. We’d rather work for them. And one thing I didn’t talk about what I was told. All the PTO. It’s a coffee as well, too. And it’s like buying in bulk on the beaches, going to Costco’s.

00:07:46:00 – 00:08:02:16
Speaker 1
You know, you’re by you and you run down the stewards, right? So since we’re local, we can do that. If I go to Sam’s Club or whatever and I buy paper towels, I buy a big, big package of paper towels. I probably can get those for maybe $0.50 or more. I should say. You have to run down to stewards in a pinch.

00:08:02:18 – 00:08:23:21
Speaker 1
That’s going to cost me 3 to 4 bucks for that one roll, right? So that’s the buying power that we have. And that’s why we’re able to do that cost savings. So because we take our for body of worksite employees and we use that to benefit our clients because we say, hey, we’re doing X amount and premium.

00:08:23:21 – 00:08:27:21
Speaker 1
Why do we need better rates on these codes?

00:08:27:23 – 00:08:53:03
Speaker 2
Yeah. That that was something I was going to ask you about. Right. Is that, one of the benefits to the PEO is that you’re able as a, as a business owner, I’m able to get a discount because of the number of people that you guys have in, how how to phrase that. Right? Like you’re basically packaging all your clients employees into one pool, right?

00:08:53:03 – 00:08:55:07
Speaker 2
Is that is that a way to say that?

00:08:55:09 – 00:09:21:07
Speaker 1
Perfect way to say it. Yeah. And one pool. So when we have a bigger negotiating power now. Right. I’m going in. We have 80,000 worksite employees across the country. So when we go in to our carriers and our vendors that we use, hey, we have this, we have we look real big to that. So yeah, but if you want to keep us, we need better, better rates from you because our clients are demanding that.

00:09:21:09 – 00:09:48:11
Speaker 1
So it’s a perfect it’s, you know, it’s I equate it to like GE right? Like GM when GE was humming right back in the 60s and 70s. Right. They were a huge at thousands. Come on employees. They’re certainly getting not only better rates but better service from whoever vendors they’re using than a general store. So I grew up, you know, you know, general service was my go to.

00:09:48:11 – 00:10:11:01
Speaker 1
Right? So like, they’re getting better rates because, you know, and two to employees, maybe three. Shout out to South Korea out there. It’s the same. It’s the same concept. But this is out on a nationwide. So again, if you needed to move, you fall. You landed a job up to say in Vermont or Connecticut or Pennsylvania.

00:10:11:03 – 00:10:33:10
Speaker 1
You don’t have to give us a call and be like, hey, I need to get this endorsement on my worker’s comp policy’s already out because it is a nationwide policy. So you just you just worry. Again, one less thing for them to do or admin to do, just going to land a job and work, just let us know, hey, these guys are going to be in Pennsylvania right?

00:10:33:12 – 00:10:48:13
Speaker 2
Yeah. So that’s a huge advantage to contractors, especially like you said, right, that are working in multiple states and and not having to navigate the bureaucratic nightmare that I imagine it must be in order to make sure that your employees are properly covered and you.

00:10:48:14 – 00:11:08:22
Speaker 1
Need to register. And that’s because we’re already registered employer because you want you do oh, employment model. So you come underneath our FERPA, you know, for the purposes of those big, you know, big business business benefits. Yeah. People use an employer record. But all of our clients maintain control and direction of their company. Which just makes me, again, makes life a little bit easier for me.

00:11:08:22 – 00:11:29:14
Speaker 1
Allows them to expand their footprint a little bit. And it’s likewise with, you know, we do partner with a lot of, like, partners, either, you know, insurance brokers or CPA and or bookkeepers. I have talked about them a lot. We partner with them too. They don’t necessarily have a license. Let’s just say I have a friend who just move out to Missouri, and he or she wants to start a new business.

00:11:29:16 – 00:11:44:13
Speaker 1
They don’t have a license out there, but we’re not an insurance company for. Yeah, so they can still bring that and people is. And we’ll be able to put a price on it and then still get paid commissions on it. You know, I know we’re far outside. That’s pretty cool what we do.

00:11:44:15 – 00:12:01:13
Speaker 2
Yeah. I and I know one of the things you and I have talked about in our conversations is kind of the, the misnomer that people are like, wow, you know, those they’re not actually my employees. If I’m using the pool. Right, I, I feel like we should probably speak to that in case one of our listeners is saying that very thing.

00:12:01:15 – 00:12:27:06
Speaker 1
Yeah. That is that’s the old way of PTO. So used to be called employee leasing. So basically that that’s how it works. The, the employer would give their employees to their PTO, all the time, and they’d lease and back to that employer. So they lost all that control because their only, their only thing they’re showing on W-2s is that the videos, they’re uploading a record and that’s it.

00:12:27:08 – 00:12:58:16
Speaker 1
So it was more difficult to get those arrangements, but, you know, there was a lot of lawsuits back then. I’m talking about 80s and early 90s and, a lot of the POWs who weren’t doing that just shifted to me saying, and once we were just shifted to a company, hey, we can still operate both ways. I mean, there’s a lot that went on behind the scenes as far as, like, laws that, you know, that our associations went fight or to make sure that that we could do it that way.

00:12:58:16 – 00:13:14:10
Speaker 1
But yeah, no, they’re your employees. They will always be your employees. It’s even in our agreement, right? There’s no solicitation of either either side. But you can’t solicit me to come work for you if you’re a client of mine. And I can’t solicit your people from work for me.

00:13:14:12 – 00:13:46:22
Speaker 2
Yeah, yeah. It’s, it’s, pretty. I don’t know, a pretty wild thing, to think about that, that whole process and how that used to go. So with the I. A question that came up in my brain. Sorry, I’m stumbling a little bit on my words here. A question that came up my brain when you were talking was, you know, from a pro standpoint, are you involved in the hiring and firing side of things?

00:13:46:22 – 00:13:51:01
Speaker 2
If the if your client wants do or do you stay away from that? How does that work?

00:13:51:03 – 00:14:09:15
Speaker 1
No, we stay away from it. But what we can do is we can give you best practices. Right. Hey, these are the things that have work because we work with so many of the same industries. We can help with job postings, be like, hey, listen, these guys just had to hire around 20 people. This is what their job listings look like.

00:14:09:17 – 00:14:27:02
Speaker 1
Not only that, and so if you come on to us, you still have. Even if you don’t take any of our benefits, like our medical benefits or anything, your employees would still have access to our ancillary business. So if they wanted to go get, a 401 K vision Dental, all the, you know, gap coverage, all that, they can still have access to it.

00:14:27:02 – 00:14:50:05
Speaker 1
So now you can add that to your job post as well too. You have access to insurance, blah, blah, blah. You know, all these, smaller, things that do impact people. So it just allows your talent pool to grow because people who are looking for specific things can get them, just by just by the employer partner.

00:14:50:06 – 00:14:56:22
Speaker 1
What else? And they don’t have to fund for it, you know. Yeah. So it makes it more interesting.

00:14:56:24 – 00:15:14:01
Speaker 2
And what about, you know, obviously as a pool, you’re covering a lot of stuff. But that’s not the only thing that you guys do. Right. Like, people does quite a few things. Can you kind of expand or unpack that a little bit as far as the different kinds of ways that you help, blue and gray color businesses?

00:15:14:03 – 00:15:38:13
Speaker 1
Yeah, it’s specific to the blue and gray and. Well, any industry too is like worker’s comp is our work comp is our job, right? So we work we every every one of our client is has a risk mitigation team member part of it. So some of the statistics on that side are that, you know, we are closing claims 70% faster than the open market, and we’re closing that 30 to 35% less than the open market.

00:15:38:15 – 00:15:57:00
Speaker 1
Not only that, we have a return to work program. So you can imagine a lot of the blue and gray collar businesses that we work with. They don’t have our light duty, but we do. And you can utilize ours. We typically and with the nonprofit, and they’ll check somebody out at a cash or goodwill Salvation Army, things of that nature.

00:15:57:00 – 00:16:26:19
Speaker 1
So it helps keep that cost of the claim lower. Because whatever that nonprofit is paying that person to work there on that light duty, the insurance company, essentially the business owners all are responsible for that difference. So we can help keep driving their might down by having lower claims. And the one thing but it’s very important in the insurance industry and talk to any insurance provider is that, close claim is a known amount and a claim that is still open.

00:16:26:21 – 00:16:50:16
Speaker 1
It’s an unknown. And that puts termination in some actuaries. Right. Because we never know what’s what’s that final number going to be. So we’re closing these out. You you already know. And we can give you indications. Hey your mind might go up. And speaking of worker’s comp matters, there’s a lot of contracts that are out there, whether it be state, local or private contracts that require a certain worker’s comp modification.

00:16:50:18 – 00:17:12:12
Speaker 1
It’s typically 1.0 or less. Let’s just say you have one shock loss one day. It’s a windy day. You guys are up on a ladder. Whatever the case would be, fall off, get hurt, and your mind goes up over one and now you lose that contract. But if you partner with people, you inherit our worker’s comp mod, which is well below one, and you can continue to keep that contract.

00:17:12:14 – 00:17:32:17
Speaker 2
That’s interesting. I didn’t know that that was I didn’t know that that’s how it worked. Speaking of like, you know, the the more we’ll say challenging things when it comes to worker’s comp, as I’m just wondering, you know, I’ve, I’ve, you know, I have a lot of contacts with contractors in different areas of, of the trades.

00:17:32:17 – 00:17:51:13
Speaker 2
And, you know, roofing is one of those things, right? Where I hear like, I, you know, getting worker’s comp or if, for the contractors that are doing certain kinds of work, they have to make sure that they’re not getting on a roof because their worker’s comp won’t cover it. Well, I mean, are you guys able to cover pretty much all of those industries?

00:17:51:13 – 00:17:55:13
Speaker 2
Like, do you have any kind of limitations on what you can get coverage for?

00:17:55:15 – 00:18:18:07
Speaker 1
We do we do our at the roofing just because you brought up roof and we do on residential. Okay. Over two stories. But commercial. We’re we’re 100% up behind it. If there’s like an 85, 15 split, 85 commercial, 15 residential, it’s that pitch roof versus the flat roof. I like that. There’s some others, industries that we won’t like.

00:18:18:07 – 00:18:42:06
Speaker 1
So if there’s any sort of, like, mold remediation, even though we’re a preferred vendor for Servpro, but Servpro, majority of them, they swap that out for somebody else, like mold remediation or specialist removal. Those types of things. And, can’t do any like the government entities, can’t do firemen, we can’t do cops. And those, those may and paramedics.

00:18:42:08 – 00:19:01:13
Speaker 1
But we could do like agency. I mean, we could do like a school. I mean, I think that I just met like, personnel up there, and we just, armed guards. So before armed security guard, before we weren’t able to do them. Now we could do it. That was as of the end of January. We’re now able to go in that there’s some stipulations to it.

00:19:01:13 – 00:19:22:17
Speaker 1
You just let that training have to be in business for at least two years. I want to say training and not like firearms training, where we’re hiring and both types of thing, we’re you’re not you know, those are some standard markets do those. But a majority of the time you got to you got to go outside of that, whether it’s a safety group or a or the state bond, to get coverage there.

00:19:22:19 – 00:19:44:11
Speaker 1
But then you run into that issue that there is a plan, right? Because those groups, especially the state one, they’re inundated with claims. So they have a tough time getting them closed out just because of the mere volume. It’s not anything you’re doing. It’s just the volume. Because if you’re in a state known as a business, you’ve had some pretty significant losses.

00:19:44:11 – 00:19:54:00
Speaker 1
So that’s that’s why you’re there for the most part. And you’re paying for it with that hours, you can come to us and we can make sure these are closed.

00:19:54:02 – 00:20:04:16
Speaker 2
Interesting. Now, what about things like so worker’s comp is, you know, a big driver for you guys or do you get into the payroll services. You do that for the for your clients. It’s all part of it. Or.

00:20:04:18 – 00:20:23:20
Speaker 1
Yeah. Yeah. The only two requirements for us are worker’s comp and payroll. And we do take care of the payroll. We you know, we file of the federal, local and state taxes, for all of our, our clients. We just handle that on our own, on the compliance side. So all your, OSHA posters, your labor posters that you need, you get them from us.

00:20:23:22 – 00:20:59:01
Speaker 1
We do employee handbook reviews and rewrites, if need be. We have, full library of different types of trainings, not only just related to the HR part. So obviously, in New York State, you have to have your sexual harassment training every year. We have those, but also on the safety side as well, too. We have a bunch of different, training programs, especially if you’re getting into something newer, just, you know, kind of thing I’m trying to think of, you know, something of that nature.

00:20:59:01 – 00:21:15:05
Speaker 1
Let’s just say you your, logistics company. Right? But you never done warehousing before. You just you just move. You move boxes, then all of a sudden, you picked up, you know, you picked up a larger contract, and, they want you to move stuff from the West coast to the East Coast. But you want. How is it in between?

00:21:15:05 – 00:21:39:15
Speaker 1
Because you, you want to have your warehouse stocked with that stuff where you can just bought real quick? We have all that kind of information of different safety policies that you would need to look out for as a warehouse manager or warehouse owner. So it’s just tons of tons of different information. I mean, I know I keep going back to work.

00:21:39:17 – 00:21:57:03
Speaker 1
Stop. I think you guys are getting the theme here that we’re here, but we have, like, real time claims information as well, too. If you do have a claim. So at any point you could call us and be like, hey, your claims analyst actually, you know, be like, hey, what’s going on with this? We’re the patient advocate. So the employee’s hurt.

00:21:57:03 – 00:22:15:10
Speaker 1
It’s our it’s our responsibility to make sure that we’re following up that way, that they’re going through their physical therapy, occupational therapy, whatever they’re supposed to be doing, making sure they’re going to a doctor’s appointment. So again, another alleviation of, task that somebody within that company would have to do.

00:22:15:12 – 00:22:24:00
Speaker 2
Yeah, I was going to say, it sounds like it sounds like you’re removing a lot of, weight off the shoulders of some, some business owners there or some HR departments.

00:22:24:02 – 00:22:53:04
Speaker 1
Yep. Yeah. Absolutely. Absolutely. At each rock. So, those. Yeah, those are the, the main, you know, main features. It really is a popular offers so much that we do that’s behind the scenes that you’re not going to know do that. It’s just it’s kind of incredible. And especially at the cost point. Right. Of where to be if I were to hire somebody for my company to do that versus me doing it, or it’s outsourcing.

00:22:53:06 – 00:23:00:00
Speaker 1
The cost is so much, so much lower now than, than than expecting.

00:23:00:02 – 00:23:20:02
Speaker 2
Well, I’m like, you know, I always when I, you know, talking to people about outsourcing specifically for marketing is the conversation. I have a lot but I have to assume it’s the same for you guys. Like when you outsource a solution. Like, you don’t have to worry about your HR department being sick that day, being on vacation that week.

00:23:20:02 – 00:23:39:11
Speaker 2
If something happens, right? Like you always have someone on call that is going to answer the phone. And I mean, I assume normal business hours are probably, a part of that. But, it’s, you know, it’s you don’t have to worry about some of those things that come along with having an in-house employee. And that’s a real benefit to business owners.

00:23:39:11 – 00:23:42:09
Speaker 2
I mean, you know, you never know when things are going to happen.

00:23:42:11 – 00:23:59:16
Speaker 1
Exactly, exactly. And half a mile away or any of that. Right. We got it. We’re here for you, you know, and we have we manage all that for you. Yeah. Whether the other asset we could take, you know, we got, employee lead or, you know, let’s say there have, you know, having a kid, you know, maternity leave and paternity if you want it.

00:23:59:16 – 00:24:05:20
Speaker 1
And we manage that for you. That way you just keep going, be pushing through.

00:24:05:22 – 00:24:10:18
Speaker 2
It, focusing on your work, growing your business, not getting bogged down in those details. Right.

00:24:10:20 – 00:24:20:06
Speaker 1
Exactly, exactly. Grow it. Drive your vision and mission and just keep moving forward and let us handle the the the heavy left in in the back end.

00:24:20:08 – 00:24:29:23
Speaker 2
Love it. Nick, if, if people want to learn more about people, maybe they’re, interested in talking to you about, moving their services over to where do they find you? How do they get hold of you?

00:24:30:00 – 00:24:44:13
Speaker 1
Yeah. So, for for people these in general, if you just look for more information, to people News.com, if you’re looking to reach out to me directly, you can, email me at, Nick or and scroll that people is.com. So you have to get that

00:24:44:15 – 00:24:46:20
Speaker 2
We’ll make sure we put that in the show notes.

00:24:46:22 – 00:25:12:12
Speaker 1
Yep. And then I’m, I’m always available on my cell to, leave me a message if you haven’t called me before I do have you say again, it’s (941) 224-8981. I’m literally here to help. Consult. I’m a consultant. First. And then, you know, I just want to make sure, you know, everything is good with you before we move forward on anything.

00:25:12:14 – 00:25:22:08
Speaker 1
Yeah. But since I’m here, that’s the whole point. I want to just get back to the my community that raised me right. And that’s that’s what being back home.

00:25:22:10 – 00:25:39:23
Speaker 2
Love it, love it, love it. Nick, I appreciate you coming on the, show, man, I, you know, we got to get together for coffee soon. I keep saying that’s a guess I haven’t seen in a while. I’m. I gotta get together. Real life man. But, I appreciate you coming on and spending a little bit of time with us, and, you know, of course, appreciate everybody for listening.

00:25:39:23 – 00:25:57:23
Speaker 2
You can find us at buying local.us. All of our episodes are there. You can also search through Spotify, Rumble, YouTube and Apple Podcast, find the audio versions or the video versions, depending on the platform. Appreciate everybody for listening. And, you’ll hear from us next week.