You’ve probably heard the old adage: “Nobody ever gets fired for buying IBM.” It’s a reference to the inherent safety of choosing a well-established, big-name company over a smaller one that may be more suitable or competitively priced. The same concept applies to payroll. There are well-known giants in the industry (we won’t mention them here, of course) that promise seamless service and boast about their seemingly boundless reach.
But are they truly the best option for your business?
We’d like to unveil some of the hidden costs of big payroll companies and national PEOs—and contrast them with the personalized benefits of regional providers like Ethan Allen. Let’s dive in.
Customer Service Issues with Big Payroll Companies
Getting a knowledgeable human on the phone when you need assistance shouldn’t feel impossible. However, with big payroll companies or national PEOs, this simple task can become a draining marathon of calls, automated messages, and desperate key-mashing to reach a living person, ultimately leaving your questions unanswered and patience tested.
If and when you get someone on the phone, the experience can be fleeting. Salespeople from large payroll firms can be present and persuasive until the moment you sign the contract. After that point, they may as well be phantoms. This kind of post-signature abandonment can lead to a severe erosion of trust between the client and the provider.
Misleading Marketing and Compliance Confusion
When dealing with national PEOs, you may hear some bold claims. For example, one of the very biggest payroll firms might tell you they run one out of every four payrolls. This statistic, while impressive on the surface, does not necessarily translate to quality service or satisfied customers. On the contrary, this scenario might make you feel ignored or underserved in a way that belies the cost of doing business.
Additionally, many customers assume they are in compliance with necessary regulations simply because they’ve partnered with a big-name provider. But, the devil is in the details, and the lack of attention you get from a national PEO can lead to avoidable mistakes, such as being out of compliance with the frequency of payroll (i.e., weekly as opposed to bi-weekly), pay dates that extend beyond the requisite seven days after a pay period ends, or even neglecting local legislature like the New York State Paid Sick Leave Act. The complexity of compliance requires a diligent partner who does more than just pay lip service to this critical function.
Sometimes National PEOs Don’t Follow the Money
Big payroll firms may initially appear cost-effective, but a closer examination often reveals a different story. Small to mid-sized businesses, in particular, may find they are not getting everything they expected, all while paying a premium for services they may not need. Some customers might threaten to leave under these circumstances, but let’s face it: a big payroll provider probably wouldn’t even notice.
At Ethan Allen, we’ve had countless consultations with business owners who spend the majority of their time lamenting paycheck problems with large companies. They entered into contracts under the impression of compliance and savings, and they’re often left in a difficult spot when reality sets in.
Speaking of reality checks: Let’s say that a major health plan is looking at a 20% rate increase in the coming months. A large payroll provider may be less likely to pick up on the indications that the carrier is in deep financial trouble due to a lack of focused resources in your area. Before you know it, the health plan is dipping into reserves and struggling to bring in enough cash to pay claims. Partnering with a regional PEO with local ties means you have an advocate with an ear to the ground, paying attention to shockwaves like these.
Benefits of Smaller Payroll Companies at a Glance
Regional PEOs like Ethan Allen tend to emphasize relationships. You’re not just another account number; you’re a valued client whose business matters. In contrast to the above, if customers choose to leave, we notice.
Regional companies also have the flexibility to offer more customized payroll solutions that cater directly to your unique business needs. They adapt as your business grows, ensuring you’re getting exactly what you need at every stage—without hidden fees or needless add-ons. With the right regional provider, you’re far more likely to experience honest, clear communication. They often excel in helping clients navigate complex compliance issues, reducing legal risks, and avoiding unwelcome surprises.
Before you face the stark reality of big payroll companies and their hidden costs, take a deep breath and remember there’s a better option. Regional payroll providers offer significant advantages, such as personalized service, flexibility, and genuine support for compliance issues. As you consider your company’s payroll needs, take a moment to explore and appreciate the value a more dedicated provider like Ethan Allen can bring to your business. And remember: You may not get fired for buying IBM, but as we’ve learned, you may pay more than you bargained for.