5 Uses of Time Saved by a PEO / HRO

5 Uses of Time Saved by a PEO / HRO
22 Jun 2015

Great Article Repost By Rob Blunt of the PEO Consulting Group!

5 Uses of Time Saved by a PEO/HRO…

Last week I was doing some web training for a PEO using my Employee Lifecycle Value Sales approach and software, and one of the newer sales folks in the session asked for an explanation of the difference between the “cost of time” number and the “value of time” number shown on the custom Estimated Time Savings Report, and how they were each calculated.

Rather than use the yeahbutwhatif sales approach, when selling the valuable “save you time” part of your offering (yeah, but what if you did this, or yeah, but what if she worked on that), another way is show a business owner several “time use options” examples with actual sample business numbers. See the very simplistic chart below, and the brief explanations of each option below it.

outsource-hr-services-employers-resource

  • Now: Do not use a PEO; do not recover any time; and nothing improves
  • Option 1: Use a PEO; recover 250 hours; reduce the working hours and pay of the people who were doing the HR admin work. (Most small prospects reject this option; ALL prospects reject the suggestion that this saves them money if they are not going to cut wages.)
  • Option 2: Use a PEO; reallocate the hours towards sales at the respective sales capabilities of the people who were doing the HR admin; illustration is conservative, as it also shows sales related expenses (COGS) going up accordingly with the new sales volume.
  • Option 3: Use a PEO; give general admin work the Exec was doing to the admin person who was doing HR admin before the PEO; Exec uses ALL hours saved for new sales; same increase in COGS as in Option 2.
  • Option 4: Use a PEO; reallocate the hours towards increasing margins (vs new sales) at the respective sales capabilities of the people who were doing the HR admin
  • Option 5: Use a PEO; give general admin work the Exec was doing to the admin person who was doing HR admin before the PEO ; Exec uses All the hours saved towards increasing margins (vs new sales)

I’m sure you think this is really basic stuff, but many of your prospects are running like crazy every day, trying to survive, and they don’t take or have the time to get back to thinking about their basic business principles. You helping them do that should be a refreshing exercise for them. They probably won’t single out only one of the options and say, “THAT’s my Value!”, but they could reasonably agree that their value could be somewhere between the low and high numbers illustrated.

(Example shows $1 million in revenue, simply because it’s easy to do the math on that number; expenses just show “materials” and “wages” as a cost of sales, but businesses will also have other office and G&A expenses; omitting those in these examples does not dilute the principle of the examples; calculations are based on saving a business owner 50 hours per year and an office manager like admin person 200 hours per year; actual numbers will be different for EVERY business.)

Cheers!
Rob Blunt

PEO Consulting Group, Inc.

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