With growth comes greater cost control responsibilities. Recent events and the resulting dynamic culture have stimulated the staffing industry fueling companies to obtain solutions that facilitate efficiency during the uptrend.
Labor force predictions for 2024 predict a shift in the pattern from the Covid driven “Gig-Economy”. Now at the crest of this wave, it is the perfect time to consider costs and goals that include margin optimization.
Operative solutions for growth like EOR’s and Payroll companies that provide reporting services have been a popular solution. While their convenience has its purpose to assist growth, it does come at a cost. Why is that a problem? Because it’s baked in and generally inflated.
Minimize costs, increase confidence, and maintain control by splitting from your EOR.
The Era of Specialists:
The best solution is the most transparent, and a team of specialists will outmatch a generalist. Fortunately, IT and Data exchange enhancements are changing the market. It is now possible to work with a team of specialists, as conveniently as an EOR with transparent costs and improved quality of service.
Payroll reporting should be a simple data exchange, and now it is.
Secure data sharing channels have now been established between (strict) payroll companies and Insurance Carriers. Additionally, some Carriers (Philadelphia Insurance) are pursuing, outsourced reporting specialists, to offer at nominal costs.
Workers Compensation and Payroll are saturated markets. In such a market a specialist can outperform a generalist at a lower price due to developed efficiencies. Specialists focus on long-term success, while typical EOR’s and Payroll combo companies rely heavily on market capture over retention.
7 Steps to Exit an EOR and Prepare a Team of Specialists:
While it is hard to break from any relationship, specialists who take pride in their work can offer a more genuine experience with thorough answers. This granted confidence improves the working quality of the business relationship.
Already shopped insurance to exhaustion from years of experience? These steps proceed the same and the agent will still act to confirm your best-in-class coverage along with the feasibility of breaking from the EOR generalist.
1st Step: Review your EOR Contract and Identify the Period Required for Cancellation Notice.
Once this has been identified, you are now in control again. Begin with step 2 in advance of the required notice date.
2nd Step: Talk to an Independent Agency with Staffing Experience
An Independent Agency will be able to shop the market openly and explore the options according to the specifics of size, experience, and industry. Not all agencies have the same portfolio of Carriers, or communication style. It is good to speak to several before divulging business information in the quoting process.
3rd Step: Talk to a Payroll Specialist
Referrals are always your friend. Both national and regional payroll companies have the prowess to handle the complexity of the staffing industry. One payroll company that is a leading player in data integration with the insurance industry is Heartland.
4th Step: Have the Agent Produce a Quote
Use the relationship established when shopping for your agent to achieve your best solution. The agent selected should understand your needs and demonstrate the best option. This involves comparing best quotes from multiple Carriers to the current coverage. Premium basis factors during comparison must be entered equally to appropriately compare rates and costs.
5th Step: *If Applicable* Ask Agent about Premium Financing Interest Rates
Staffing companies commonly experience large work comp premiums, and not all companies are within the appetite of the admitted market which provides payment plans. Those who are serviced by the Assigned Risk Pool or Excess & Surplus Market pay interest to finance their premiums. Agencies contract with a variety of premium financing companies. Inquire about this rate, and depending on company size, this is negotiable.
6th Step: Discuss the Payroll, Audit, and Reporting Scenario with Agent
Use the agent’s knowledge of Carrier capabilities to place you with a company that facilitates your needs. They will be the introductory liaison to establish the relationship between the payroll company and the Carrier. Whether it be through direct data interchange or a reporting specialist, the agent will provide costs and functionality with a quote.
7th Step: Schedule Future Bind Date to Match EOR Exit Date
Work with your agent to eliminate gaps or overlaps when scheduling the shift. They will set coverage to match the needed date. If selecting to break from EOR that does not coincide with insurance renewal, agent will process cancel rewrite. The new payroll company will be able to import data from the EOR if the data was not bound within a contract.
Staffing Carriers Portfolio – Wes Connor Insurance:
Our Agency is appointed by but NOT LIMITED to the following Carriers and Brokerage Programs related to Staffing Risks.
- Philadelphia Insurance Company
- Comprehensive Staffing Company Coverage
- Everest Insurance
- QBE
- PMC Insurance Group
- Staff Pro 3 – Insurance Solutions for the Staffing Industry
- ASA Member and sponsor of 2022 National Staffing Employee of the Year
- US Risk Underwriters – StaffPak – (Markel, Key Risks, Napeo)
- ASA Member
- California Staffing and Recruiting Association
- Amtrust Staffing Specialty Programs
- Hiscox Staffing
- NSM
- Staff Pro 3 – Insurance Solutions for the Staffing Industry
Coverage Types:
We are proud to be able offer complete coverage to our commercial clients that includes but is not limited to:
- General Liability
- Property
- Workers Comp
- Business Auto
- Commercial Umbrella* – Not just “Excess Liability”
- Professional Liability / Errors and Omissions
- Crime
- Cyber Liability
- Employment Practices Liability
- Directors and Officers (Protection for Board)
- Molestation (Protection for entity)
- Environmental risks
Photo Credit:
“12 Steps to Opening a Medical Staffing Agency.” Medical Staffing Consultants. May 7th, 2019. Logic Web Media. 2023.
