Calculating Employee Benefits.

Thomas Farrell Human Resources Services Leave a Comment

For many small businesses, the final quarter of the year is soon upon them. Q4 is the defining quarter, the one that can make or break the financial projections so carefully set last year. While setting a budget in anticipation of a bright future can be difficult, it is even more so when Q4 rolls around and you realize that you are coming up short.


Planning an accurate budget is not an easy thing. So is spending carefully during the year so financial missteps don’t derail the whole year’s efforts. If you are finding yourself in the midst of turmoil heading into Q4, you may want to consider a few things before you make any rash decisions.

Q4 Shows What Is Costing Too Much While Trying To Save Budget


If you took a business calculus class in college, then you might have gone through the exercise of finding out which of the 3 top telecom carrier plans was the one that would save you the most over time. If you did then you were probably surprised by which one was actually the real cost savings. SPOILER ALERT: Not the cheapest one per month.


Just like in that exercise, the kinds of companies that lead with a cheap price are the ones usually making the most on the backend and leaving you paying for it. It behooves the reader to know that no company ever set out to save their customers money at the expense of their own bottom line, even if they tell you that is what they are doing. Margins are everything and trust me, they are watching theirs very carefully.


There are three common things that small business owners jump to use to save money while only winding up spending more in the long run. Here they are:


Overuse of Temporary Workers – There really is a case for using temporary help and freelancers to help you get the jobs that take a little extra oomph done. No one is disparaging temporary help here. However, it does start to tax the bottom line when you are using temps over and over for the same types of tasks you could hire someone to work on at least part-time for less per hour.


Temporary workers are either hired directly or through an agency. In both cases, you are getting an inflated hourly rate because either the freelancer and/or the agency knows that the job is going to go away at some point. Finding a regular part-timer can drastically reduce hourly wages, provide stability in job-to-job performance and significantly increase productivity because that person is familiar with your work, your company, and the tasks at hand.


If Q4 is looking tight to you, take a look at what you’ve spent on freelance and temporary help this year so far and see where a regular part-time worker could have saved a few bucks and plan on bringing one or two aboard before the end of the year.


Trying Too Hard To Keep Everything “In House” –  This is another situation that on the surface appears to be a totally legit financial decision. Not paying extra to get it done, right? Who is doing the in-house work? People who already have other jobs to do and are taking up the slack, and burning the candle at both ends to save a buck or two. Truth is, it doesn’t save anything when employees get frustrated by working too hard for too long. Those people leave your business grateful to not have to work another day at your sweat shop.


How about you? What does it cost you to do everything yourself as a small business owner? There are only so many hours in the day and doing too much costs plenty in dissatisfied customers, resentful employees, family and friends. No one should be a one-man show and expect that things won’t suffer. If you are too busy doing everything then you are likely not doing anything well.


Small business owners that take too much on themselves are not looking for new business. Don’t fool yourself. If you are coming up short so far this year, this may be the reason for it.


Spending Too Much On Discount Employee Benefits – If I’ve never heard one thing it is a small business owner telling me that their cut rate employee benefits were the best thing they ever did for their company. If the rates are so low then the coverage is too scarce. Employees who don’t have competitive employee benefits will find an employer who offers them.


It costs a lot of money to hire people, do you want to keep burning through employees over your discount employee benefits? Looking for new hires, taking the time to interview, onboarding and training are all costing your business a lot of money, never mind everyone’s time. If your turnover rate has bitten into your profits, take a look at what you are offering for benefits. That could be a major culprit.


Where A PEO Can Help With All Of These Budget Burners


It might surprise you to know that a PEO can help you with all of these Q4 culprits. PEOs succeed where small business owners fail with knowing how and where to find temporary help, providing excellent benefits at a lower cost than most discount employee benefit plans and especially taking the load of a small business owner by outsourcing payroll and HR to trusted hands.


Most small business owners are ill equipped to navigate the ever changing HR landscape. A PEO is a trusted ally in protecting the small business owner from potential government fines and even some litigation. Could you use some lightening of your burden in the HR space at your small business? Most small business owners would. The fact of the matter is, PEOs free up budget, not take a bite out of it.


So how is your Q4 looking? Is there some cleanup work to do before you close out the books? Might there be a better outcome for next year by taking care of some of these Q4 pitfalls with a PEO? There is only one way to find out. Talk to a PEO broker like PEO Spectrum today and see what a PEO can do for your company’s financial future.


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