Small and midsized businesses (SMBs) are in a personnel pinch.
Even the most well-intentioned entrepreneur, particularly if she heads up a tech firm, can find it tough to match the benefits packages and perks provided by deep-pocketed corporations. Retaining sought-after professionals becomes a challenge when they are enticed by grass that's alluringly greener on the other, skyscraper-lined, side of the fence.
It's a simple matter of economics. Just keeping the lights often leaves little money left over for generous health coverage, retirement plans and other benefits. SMBs find that can't compete against companies with bigger budgets.
Or can they?
How SMBs Can Offer Competitive Benefits Packages
CoAdvantage, a Tampa, Fla.-based professional employer organization (PEO) that businesses call on to outsource administrative back-office and human resources (HR) functions, helps SMBs stay competitive with the benefits packages offered by larger firms. Chad Parodi, senior vice president of sales for CoAdvantage told Small Business Computing that his company specializes in providing "a breadth of products and services" that small businesses may have a tough time procuring or affording on their own.
Among CoAdvantage's myriad offerings, which include payroll, benefits management and Web-based self-service capabilities, is help complying with the Affordable Care Act (ACA), a challenge for many SMBs, said Parodi.
A team of experts at CoAdvantage is charged with knowing the ins and outs of the ACA and its effect on a business' regulatory obligations and finances. Webinars and other resources help demystify the healthcare landscape for small businesses. "We help our clients navigate the challenges of healthcare reform," said Parodi.
CoAdvantage can deliver "a true Fortune 500 benefit package to a small- to-medium-sized business," said Parodi. As boastful as the claim seems, the company manages this feat by leveraging economies of scale.
The company has a client base of 2,200 and manages at least some of the HR functions for 45,000 employees. Those numbers add up to some serious negotiating power that CoAdvantage can use to secure affordable benefits for its customers.
Employee Benefits, Upgraded
One such customer, CM First out of Austin, Texas, took CoAdvantage up on its offer and found a way to keep employees happy and loyal.
CM First is a software developer that takes enterprise legacy software and modernizes it for today's cloud-based and mobile work styles. When Ben Mendoza, the company's financial controller, arrived last year, it was a lean six-person shop. The loss of just one coder could have a major impact on its operations.
It wasn't long before Mendoza was fielding questions like, "Why is everyone here in Austin offering benefits and not CM First?" A competitive tech scene was beckoning. "Standard benefits packages, healthcare, 401K" and the like had "become standard here in Austin," he said.
As a concession, the company offered a $500 monthly stipend—much less after taxes—to help with expenses. CM First needed to up its game fast, but without breaking the bank. "How can we get this working without extending ourselves?" wondered Mendoza.
Enter CoAdvantage. For less than the monthly $500 per-employee outlay, CM First was able to provide its workers medical, dental and vision along with a 401k plan with employer matching. As a bonus, the company instituted a profit-sharing program—money that goes straight to workers' 401k accounts, according to Mendoza—and gained the capabilities of "a full HR department."
These moves helped CM First not only save money and retain employees, but "continue the growth path that we're on," he reported. Since then, headcount has more than doubled and employees now "have the benefits that a large corporation can offer."
Pedro Hernandez is a contributing editor at Small Business Computing. Follow him on Twitter @ecoINSITE.
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