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The PEO Profitability Model

Some profitability models are simple and straightforward, like your neighborhood lemonade stand. Others are a little more complicated—Pokémon for example. Pokémon started out as a video game. Then Nintendo created a trading card game with Pokémon characters, based on the Pokémon video game. Then came another video game, this time based on the Pokémon trading card game that was based on the Pokémon video game. There are approximately a bazillion permutations of Pokémon on all kinds of merchandise, and Nintendo sells these to new crops of kids every year, as well as selling more, more, more to those who already have some (and to collectors, who are no longer kids!). It’s truly ingenious. Know More

Departments

Risk Management

Workers’ Compensation Markets at an Inflection Point

Insurance markets are historically cyclical, and most PEO operators and observers carefully monitor the workers’ compensation cycle and its impact on the PEO industry. In the post-9/11 hard workers’ compensation market, insuring capacity to the PEO sector dried up to nearly nothing, causing material structural changes in the PEO industry, not the least of which was a significant shake out of companies unable to secure workers’ compensation insurance—a “forced” rather than strategic transition to hybrid ASO (non co-employment) models, a wave of industry consolidation, and regrettably, the formation of illegal workers’ compensation schemes which, in several cases, led to the perpetrators’ convictions for fraud and a dark shadow being cast by their actions over the PEO industry.

Legal Currents

Extended Contract Terms

Typically, PEO client service agreements (CSAs) are terminable for convenience (at will rather than for cause such as a breach) on relatively short notice, often between 30 and 90 days. This can be an important selling point; if for some reason a client is not satisfied, it can terminate the relationship easily.

Human Resources

What it Takes to Be an ‘Employer of Choice’

What company doesn’t want to be known as an “employer of choice?” I was recently the keynote speaker for the “Best Places to Work” luncheon in Columbus, Ohio, and was pleasantly surprised by the companies in the region dedicated to this objective. They were not only successful, but they were having fun too! Unfortunately, they are still in the minority.


Columns

Statehouse Update

Striving for State Regulatory Uniformity Tim Tucker

The states have been dubbed “laboratories of democracy” for their ability to find creative solutions to public policy problems, which most will agree has served the country well. However, one undeniable challenge with creating regulatory systems on a state-by-state basis is the difficulty ensuring uniformity.

PEO Index

The Employment Index and the Economy John Slavic

It is very difficult to accurately predict the future, but correctly assessing the present is easier and eminently more valuable. The index was essentially flat to slightly positive for the last quarter of 2011.


The PEO Files

Three-Pronged Growth Strategy

Headquarters: West Palm Beach, Florida Top Executive: Mark Perlberg, President and CEO Years in Business: 16 PEO Clients: More than 4,000 PEO Worksite Employees: More than 124,000

NAPEO Notebook

Partners in NAPEO’s Journey Patrick J. Cleary

As I write this, we have just returned from the NAPEO strategic planning session in San Antonio with our Board of Directors and Leadership Council chairs


NAPEO Advisor

PPACA Employer Voucher, Title VII Violations, CLASS Act, Severance Pay, Discriminatory Employment Actions William J. Schilling, Esq.

Q. How will the employer voucher system under the Patient Protection and Affordable Care Act (PPACA, or ACA) work? A. It won’t.

The Inside Word

Marketing for Growth Arthur L. Geiger

It was once said of an underachieving son of a famous NFL quarterback that he had a lot of potential and always would. One could argue that the same can be said of the PEO industry. From the beginning, our industry has been marked by periods of growth, potential, change, and, in some cases, disappointment.


Innovation Alley

Flipping ‘Employer Services’ on its Head Stephen Cilley

I have been asked countless times why I started a PEO. Over the last three years, I’ve also asked myself that question, but I quickly remember why: I love business. I’ve owned multiple businesses throughout my career, so I know how difficult it can be to run a business.

Global Insights

The State of American Business Thomas J. Donohue

Each year at the U.S. Chamber of Commerce we take stock of the state of American business and chart the year ahead. As we begin 2012, the state of business is improving, but it is doing so weakly, slowly, and insufficiently to put enough of our country back to work. We are still down 6 million jobs from the start of the recession.


Employment Law

Social Media and Privacy Barry Salkin, Esq.

There is no question that using social media has a number of advantages for organizations. It is an external business generator, promoting an organization’s brand. It also increases the visibility of the organization, and for non-profit entities, it can increase public support and enhance fundraising.

Employment Digest

Three Things Every PEO Must Know About Child Support Nancy Benner

New hire reporting is the process by which PEOs as employers report information about newly hired employees to a designated state agency shortly after the date of hire.


Capitol Comment

Opening New Doors in Congress Thom Stohler

An old joke in Washington, D.C., goes along the lines of, “Legislating is a lot like sausage making. If you like both, you should not watch either being made.” As we enter the third month of the calendar year, the legislative sausage factory is up and running.

 

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