Should you jump on the free online payroll bandwagon?
There are a lot of promises being thrown around that you can have it all for free by some fast-moving companies trying to take over the benefits/payroll/human resource servicing world. How do you know if this is the right move for your business? They are cheaper in many ways. That’s true. But is that the only thing worth considering? Cost control is very important, and for some, this might be just what they need to grow their business. But for most businesses, there’s more to consider than just finding the cheapest solution to payroll, HR, and benefits.
- Know the online broker business model. It’s quantity, not quality. Their business is based on volume. They make money by taking in a large volume of low-paying clients, use more automation than people, and are not focused on quality of service.
- Read the fine print! Not all services are completely free. There are hidden costs in all that sizzle, “if you buy this-sign up online and everything else is free.” Look closely for the disclaimers. Decide if you want to be hit with a cost later that wasn’t thoroughly explained up front. Having a personal relationship with your broker means they walk you through everything you need to know, in-person so you are informed at the time of signing up.
- Know the benefit limits. Being hurt or having an employee with a catastrophic illness or injury is not the time to find out how limited your coverage actually is. Many of the big companies aren’t focused on you and your needs. They are focused on making sales, period. You can hedge your bets that you won’t (hopefully) have to go through navigating an injury and worse, an audit from OSHA. But if you do, who do you want working with you? Someone who has never heard of you or someone with whom you’ve been working with on a personal level that understands your business needs and will fight for you if needed against a governing agency?
- Start-ups are risky. We’ve seen them fail before. Don’t be taken in by the hype. Remember, their hook is catering to one aspect of your benefits, payroll, and HR needs-the cost-and they are running on start up money, not profits. It takes profits to stay in business and if their start up money runs out or the broker commission model changes, there goes their longevity-and your benefits. What happens then?
- If it sounds too good to be true, it could be. They can offer a lot of free services when they’re running on start up investment money because someone else is paying for it. What happens when that money runs out? Do they fold up, take their profits and slink away? It’s happened before. Will your service fees go up, you can plan on it. They already have you hooked by then. What happens to you and your business? Where will you be? It’s worth thinking about before you make that jump based on one aspect.
- You can be talked about by Forbes and still not be a good deal for consumers. If all you’re hearing is bragging about how big they are and how fast they’re moving, they’re not focusing on the right thing: the service they provide customers and the quality of those services. That’s the real story.
Moving your administrative services over is a big decision. There’s more to consider than just the monthly price. If you decide to move to a big box company, remember the potential impact it will have not just to your business but the overall economy as well. This point is really worth stopping and looking at. Do we really need more big businesses shutting down little ones?
They are hunting in the small to medium business benefits backyard and running their business off. This will eventually put a lot of people out of work and reduce options and services. And in doing so, this will concentrate the types of services and options that are out there to only the big players. Do we really need more big businesses running the show?
It pays to do your homework and a little forecasting on the impact. It could work out well for your or you could be left in high and dry without the robust options you have now because so many payroll/HR/benefits companies went under while everyone chased after a business model that wasn’t sustainable.
Link: related article The 5 Flaws to a Zenefits Approach