The last couple columns have centered around technology and ways to improve productivity, and thus profits and shareholder value. There is little doubt that you could improve operations if you took the time to analyze what you are doing, and what is available already in the marketplace to help implement the changes.
We covered digital tools to support and improve field service in terms of first-time-fix rates, technician utilization, increased productivity, revenue enhancements and customer satisfaction. Considering the importance of your aftermarket presence adopting these tools is imperative if you hope to just maintain or grow market share.
We also covered what telematics have to offer. Telematics provide a perfect fit with the field service tools mentioned above and really kick up your service levels a notch or two. Many dealers are moving into this area and will have the ability to monitor user fleets as well as provide data regarding both short-term and long-term rental units. Again, if you are not at least investigating this option at this time you will find yourself behind the eight ball.
Both of these topics are covered at AEMP meetings and through their training programs. I encourage lift truck dealers to investigate having an employee get "certified" by AEMP to be a professional equipment manager. This knowledge could be used to consult with customers to help manage their fleet needs.
Customers will continue to find ways to reduce cost and become more efficient. Vendors who help them do that will be at the top of their call list. Fall behind and your risk of losing long-term customers increases significantly.
I had an opportunity recently to meet with a group of dealer CFO's to discuss data management and other industry topics. Great group that provided many useful suggestions on how to do their jobs better. By "better" I mean how do I get rid of compliance issues so I can spend more time on the business.
One item that popped out from the meeting is that all but one of the CFO's are on a five-day-close cycle. When I explored further, the key to this timing was getting rid of spreadsheets and getting all data properly recorded in the system. Get it done right the first time and save time.
Getting rid of HR issues was also high the list. When you are in charge of hiring, training, reviewing, benefits, compliance and all other employee related issues, HR can become a full-time job for the CFO and probably one other person as well. It is expensive to have employees over and above the payroll cost. To make matters even worse, there were about 35 employment laws and regulations to deal with in 1980, and now that number is about 100 employment laws and regulations to content with, making it almost impossible to not be in violation of something. More reasons to try and simplify the HR process, and believe it or not very doable with the latest version of a PEO. To get up to speed on PEO's I interviewed Chris Zdunich of TriNet. email@example.com if you have questions.
A PEO will serve as an outsourced HR department providing comprehensive employment services such as payroll, benefits administration, HR management and employer compliance. The PEO partners with you to help attract talent, contain rising HR costs, create efficiency and minimize risk exposure. PEO' s enter into a shared employment relationship with your company, become the employer of record and is responsible for payroll compliance, workmen's compensation insurance, unemployment claims and other HR functions. Your company retains control and direction of employees.
With the total employee pool PEO's are able to better negotiate costs associated with HR, including Workmen's Compensation Insurance. Payroll checks or deposits are made on company checks but use the PEO Federal ID number. In short, PEO's are responsible for the 100 or so employment laws and regulations referred to earlier.
Negatives associated with PEO's seem to be related to company control and company culture. But since the only difference regarding payroll is the ID number, there should not be much of an issue. In terms of culture, your company is involved in the HR process keeping in mind the 100 employment regulations and laws which no longer give an employer much leeway in how to handle HR matters. On the other hand, PEO's are familiar with just about every employee related issue you can think of. In addition, PEO's have a direct interest in employee safety issues. In the end, employees have state of the art payroll services and benefit administration which may be better then what they currently have.
A PEO will free up the CFO and most of the time of one other person, leaving the CFO to concentrate on more "profitable" issues. The PEO cost is usually 2-3% of payroll before taking into account any reduction in insurance cost or internal payroll cost currently consumed with HR matters. There should not be any increase in cost, but a more efficient HR function that benefits both the company and employees.
These are some ways to keep it simple so you can concentrate on making more money. In today's environment almost every business activity can be completed in less time if you put your mind to it and ask a millennial to see if they can speed up the process.
Keep it simple and profit from it.
Garry Bartecki is a CPA MBA with GB Financial Services LLC. E-mail firstname.lastname@example.org to contact Garry.