Many Small Companies Now Seek Outsourced Benefits to Attract & Retain Employees
Small Businesses Gaining Affordable Access to ‘Large Company Benefits' by Using Certain HR Providers, Such as TriNet Group, Also Report That They Gain a Competitive Hiring Advantage in the Process
SAN LEANDRO, Calif. (September 6) - Health benefits are key to attracting talented workers who help companies obtain and keep a competitive edge. But most of the nation's 5.6 million small businesses say they can't afford to offer those benefits.
As a result, uninsured workers at small companies account for 57 percent of all uninsured workers, according to The Commonwealth Fund, a health research group.
But that's not all – some businesses are left with no alternative but to drop their health benefits altogether. In 2003, only 65% of firms with three to 199 workers offered any kind of health benefits, down from 71% in 1999 according to the Kaiser Family Foundation.
Many small businesses are now overcoming this obstacle by partnering with a human resources outsourcer (HRO). TriNet is one HRO that has effectively made Fortune 500 benefit plans available to its entire serviced payroll population, enabling employees at TriNet's small and mid-size business customers to participate in fully insured plans with no individual underwriting, guaranteed, issue, and first day coverage.
TriNet, a leading HR services provider based in the San Francisco Bay Area, has customers nationwide that enthusiastically testify to the need for "large company" benefits that can't otherwise be obtained except through outsourcing. One example is Synergenics — an organization that operates a consortium of commonly-owned but independent start-up biotech companies, providing member companies with shared laboratory facilities and a wide range of experienced management and administrative services. Synergenics was founded by life-science veteran William J. Rutter and is based in San Francisco, California.
Susan Vandegrift, Synergenics' vice president of finance, explains that gaining affordable health insurance was key for getting the small company up and running. "We knew that our employees would need a minimum level of benefits offerings, but we also had a budget to maintain. In this situation, having benefits in-house simply wasn't feasible. We needed a provider that could aggregate many companies into a single pool and offer affordable, ‘large company' benefits."
Vandegrift adds, "If you have an employee population that doesn't necessarily need high-end benefits, such as disability and life insurance, then outsourcing may not make sense. But if your employees expect these types of benefits, then obtaining them becomes paramount if you want to attract and retain the talent you need."
InPhase Technologies is another TriNet customer that depends upon outsourcing in order to obtain affordable, large-scale health benefits. Founded in December 2000 as a Lucent Technologies venture, the company intends to be the first to bring holographic data storage technologies to market.
"We needed a competitive benefits package," said Andrew Evans, CFO of InPhase. "That meant finding and hiring the best talent in the storage industry—a tall order even in the midst of a slow economy, as the best engineers and scientists were already gainfully employed by large, public companies. TriNet helped us compete with those larger, better funded entities."
"TriNet's benefits package continues to help us attract the talent we need," Evans continued. "We are currently able to manage benefits and HR without a full-time, dedicated staff person."
TriNet's benefits services are particularly well suited for companies that need to attract and retain "highly compensated" professional talent, including architects, engineers, accountants, attorneys and others. In addition to medical and life insurance plans, the TriNet suite of benefits also includes flexible spending accounts, commuter benefits, accidental death & dismemberment, short- and long-term disability, and even pet insurance.
TriNet's services also include payroll, risk management, workers' compensation, and on-site HR support and guidance.
DISCLAIMER: Nothing contained herein constitutes an offer to sell, buy, or procure insurance. Persons interested in such services, whether bundled with HR services or not, should contact an insurance agent or broker, or seek appropriate professional advice.
About TriNet Group, Inc.
Founded in 1988, TriNet (www.trinet.com) delivers comprehensive human resource services to small and medium-sized companies. Its offerings include human asset administration, employer risk management, online HR services and support, payroll processing, tax compliance, workers' compensation, group health and welfare products, and strategic human capital consulting services throughout the United States and Canada. More than simply an HR services provider, TriNet contractually assumes certain legal and financial responsibilities regarding employer rights, legal compliance and risk management.