Episode 59: Inside the Largest PEO: 5 Things Brokers Should Know About ADP TotalSource

Speaker A: Foreign.

Speaker B: I'm M. Cassandra Novak and I'm part of the Savoy PEO center of Excellence. My role is to help brokers position PEO strategically avoid those missteps and bring the right partner to the table at the right time. Today we're kicking off our session with Kimberly Cram from ADP Total Source. Hey Kim, how are ya?

Speaker A: Good. Cassie, thank you so much for having me today.

Speaker B: Thank you. We all appreciate your presence and your ability to attend today. Um, what I'd like to start out with is to just hear a little bit about yourself so that everyone can get to know who you are.

Speaker A: Yeah. So I'm Kim Cram with ADP Total Source. I've been with ADP for the last nine and a half years and specifically working in the broker community for the last eight and a half years, helping them to bring innovative solutions to their clients and prospects. Previously I was in the role of running an organization and I had about 300 businesses, uh, 300 employees. And I was very overwhelmed and was always thinking, isn't there a better way to do this? And then I was introduced to somebody who was running around in the PEO world and I thought it would be a great opportunity for me to be able to expand my skill set and do something different.

Speaker B: Well, that's great. And I'm sure everybody appreciates understanding and knowing a little bit about who you are and how you came to be with, um, ADP Total Source. Now we could certainly learn a lot more about ADP and um, ADP Total Sources product. So if you could give us sort of the 30,000 foot level of who ADP is, um, what size organizations primarily you support and then, you know, just describe the footprint nationally.

Speaker A: Yeah, no problem. So in about 1949, ADP got into business to help organizations with their payroll and they started there. And from that point forward, organizations started asking for more and more support until eventually ADP got to the point where they realized that a PEO would be a great opportunity to be able to fully support their clients. So what's great about ADP is that we could support people a la carte or we can support people from a, uh, full outsourcing perspective. In the PEO world, our average size client is about 65 lives. And typically we look for groups that are about 50 to 150 lives.

Speaker B: And I'm sure that context is super helpful to our newer brokers and even those brokers that may know who ADP Total Source is but haven't really taken a dive into working with adp. Um, so let's just get very practical for our brokers. If when a broker is reviewing their book of business and wondering whether ADP Total Source could be a fit, what are some things that immediately stand out to you that they should look for? Like, are there core industries where you see the most success or are there types of employers that benefit most from your business model?

Speaker A: Yeah, definitely. So I think first and foremost is what's going on in the organization. Are they multi state, where they have employees nationally across the board that they need support with? Um, if they have multi state, the more complex the organization's going to be, they're going to need more support between leave management laws, needing national plans, needing, um, support with workers comp and tax administration. Um, from there I'd say it's also. Has there been turnover in key positions? You know, what does the HR team look like? Do they have that full support or do they have one person who's wearing a lot of hats, which prevents them from really being able to be strategic? Um, and another point would be if they're growing or if they're downsizing. So if they're reorganizing, that's another good opportunity where we can step in, um, and be able to support the business overall, especially if they're eliminating any of the HR positions. From there, I'd say really looking at the industries to see if it makes sense. So where we see ourselves doing best is tech engineering, uh, professional services, H vac, manufacturing, property management, nonprofits. We definitely like some risk. Um, you know, so we have some white and gray collar, we have some blue collar, but that's an area that, you know, we're a little more conservative in. So that's where I would ask brokers just some more questions to identify whether it's the right risk model for us or not to be able to see if we could fully support them.

Speaker B: And that clarity is exactly why engaging with Savoy's PEO center of Excellence early is so important. It saves time and protects the broker's credibility because we work so closely with some of our partners that we have that insight view and that can certainly help push the process along. Um, do you feel that way, Kim, that the partnerships between your brokers and your general agencies really helps understand your

Speaker A: platform even better, 1,000%. I mean, the support that your brokers get from going through Savoy and just really working directly with me is huge. Um, there's a lot of support there and you're really able to help give them the expertise that they need to be able to navigate between all these different peos and what we have to offer.

Speaker B: So you did mention risk and being cautious of the type of risk that you, um, bring on. And we talked about the scenario of, you know, what might look like a good client to you. On the flip side, what are some of the flags or scenarios where brokers should pause for a moment before pursuing a peo? I mean, are there specific industries that ADP Total Source steers away from because, uh, of that type of risk and exposure? And are there other specific industries that just kind of stand out?

Speaker A: M. I'd say some of the things I'd keep in mind is, you know, are there tower climbers or are there people scaling buildings, washing windows, um, you know, doing extremely risky construction that they're actually doing themselves? A lot of times it's asking the questions to understand what does the business do itself versus what they're outsourcing. So I have worked with a lot of, um, construction companies, engineering firms, where they're not actually doing a lot of the work themselves, they're outsourcing it. So it's just really important to know. I'd say some of the groups that are really not going to be fit are going to be public entities, municipalities. Um, you know, we don't really do much work at this point yet with, like, the cannabis industry, um, you know, anything that's kind of gearing into that. ADP is a conservative company. Um, that's what really lends itself to our stability with being a publicly traded organization that, you know, we're just cautious with the groups that we underwrite and bring onto our book.

Speaker B: So going back to the, you know, um, people that are window washers and things like that, would you just say, like anything of above two stories and less and less than six feet under, Is that sort of what we go with?

Speaker A: Yeah, roughly. I mean, if it's a small percent of their work that they go above that, it's okay. We really do get a little bit more nitty gritty to say, like, what percent of your work are you doing this? And then we'll take a look at, like, what's the safety? But I'd say that's like a good rule of thumb. Um, you know, very good in such

Speaker B: a competitive PO market. From your perspective, what truly differentiates ADP Total Source from other options brokers might be considering? I mean, we all know that there are a lot of different peos out there that, you know, are soliciting and doing business just as you are. So what sets you apart?

Speaker A: I love that question. It's one of the favorite ones that I have that I get. Um, so number one, ADP is the largest peo. And I should have mentioned that in the beginning. So we have about 800,000 lives that are now on our book. Um, what's even more unique about us is that's all been organic growth. So ADP has never acquired another company's book of business. Everything's been carefully underwritten from day one. Um, from there, I'd say, like some of the big things is one our data. Um, ADP pays one in five Americans. I'm sure a lot of you see that. You know, we're always providing the labor reports. And what that does is it lends itself for us to be able to share that data with our clients. So all that data gets housed in our system and, and it lets us provide unique benchmarking to our clients to show them what average pay is, what average benefit contribution is, um, in every single state that they're in. And that helps them to make sure that they're right at the right pay scales and it's all integrated into the system and they can work with their HR business partner. And from a broker standpoint, it's important for you guys to know that we can also be able to provide a free benchmarking report anytime a client goes through an evaluation through Savoy with us. Um, it's really unique though, because of the data that it gets. There's companies that pay, you know, up to $10,000, $15,000 to get that. So that's an everyday that lends itself to our technology. We have our own technology. Um, so what's really great about that is we are always working on it, we're always advancing it. Um, you know, it's not a third party vendor, so we're not at the mercy of waiting for them to be able to do updates. We're able to do it in real time. And I think a great example of that is, um, when Covid happened, right, we had to adapt really quickly to what was happening and to be able to do the daily health checks. And ADP was immediately able to get that into our software. So the technology is really great. And it's always like, I'm always being surprised. Um, you know, I think it's one great thing that we're doing this upcoming year. I don't even know if I had mentioned it to you, is we're going to be able to have international employees in our system. Um, we won't be able to be the employer of like the record for them, but we'll be able to have them in there for reporting purposes. And that's been an ask of our clients for a really long time. So we're super excited about that. And then just the last two pieces, I'll mention our service team, um, ADP is taking this broker world to the next level. Anybody who comes to us from a broker lead is going to get a specific broker service team. And it's really important to note that because one of the biggest, um, complaints that we get from brokers, right, is not being broker friendly. But in this world, those HR BPs, those payroll advisors, those risk and safety people, they only work with brokers so they know how important it is to be communicating with the broker on things around the medical or if there's anything going on with their clients that they should be aware of. So I mean, I'll keep it to that. You know, um, I think those are like three of the main things that are really important to note about ADP and kind of what makes us different from the competition.

Speaker B: Well, that's fantastic. Kim. Let's talk about execution because even great opportunities can fall apart in the process. What are the most common mistakes you see brokers make when submitting PEO opportunities?

Speaker A: I say the biggest thing is just not having complete census information and honestly the renewal documents, um, those are the two areas. So you know, for me, I think the cleaner that you can submit a case, the faster we're going to be able to get that approval. When my team has a clean case, I can typically get that in through the system between two to five days, depending on whether, you know, it's a large group or we have to go through the claims, um, whether the level is self funded. But if we don't have a complete rfp, then it just turns into a lot of back and forth with asking for, you know, a child's date of birth or a, ah, cobra, date of when somebody was termed and when their cobra could possibly expire. So really having a complete RFP is important. We can help with that too. So if there's ever a broker who has a group coming from another peo, you know, we have lists of the different documents that we need to get and that's super important to make sure that we're getting like all the right documents. AP's underwriting is unique because we underwrite upfront. So there's a lot of peos that will give illustrative quotes and then that quote, you know, is subject to change depending on the Data when it's submitted in its completion. For us, we underwrite up front. When we give you our quote, it's valid for 90 days. We're not going to ask for another piece of information until after that. 90 days. So it's just really important that from day one we have everything we need to make sure that quote is accurate and even like, honestly making sure it's a complete census. Because I've had groups that give me a census and then, um, you know, two weeks later they're like, oh, well, here's the full census, you know, and then I have to truly bring that back to my underwriting team because the last thing I want to do is, is provide inaccurate data to a client, you know, in front of a broker. Um, I take it pretty seriously that I'm being trusted by a consultant and I want to make sure that everything is above board and accurate.

Speaker B: So I'd like to add that this is where Savoy really does add value. We pre vet opportunities, clean up the data and help align expectations before anything is submitted. But I think that even in those cases, um, it could hold up the process. And what I see most often, even through our scrubbing, is that an invoice doesn't match with the census and the census doesn't match with, um, the renewal data. What, in that process is the most important and what documents are you. I know that you're cross referencing things, but what, what is essential to actually managing the process and getting it through underwriting?

Speaker A: Honestly, I really, what I think the most important thing is is brokers, um, giving you access to the client and making that introduction right away. Because a lot of times once that conversation starts where there's, we need more data, it's going through multiple people, right? And then that just holds up the process. So if you're not in front of your email or the broker's not in front of their email, when the person sends something back, you know, that could delay things for a few more days. So I think access to the client is most important in just having that conversation and allowing you to be, um, as Savoy, the one to help collect that data and just making sure everybody's comfortable. Um, I think that's the most important. But the census is really, because for us there's a lot of, um, variables that we look at, right? We're looking at their demographics, you know, we're looking at, we use gradients, so we're kind of looking behind the scenes to see, you know, what we should be aware of with the group. So having that is really important. Um, if it's a large group making sure we have all the claims experience or if they're level funded. So you know, in New Jersey especially, um, we have a lot of, you know, Aetna Horizon level funded, um, Oxford. And it's really important to make sure that those claims reports, the monthly and the large claims are all there in that packet. Those are probably the hardest is the claims reports and then you know that renewal document, if it's a prospect, when it's the broker of record. Right. They generally have all that data but when you're prospecting it's a little bit harder to get. So I think if they could get a complete list from you. So Kassy, and have that and make sure that the client understands like up everything that's needed, I think that's probably the most important piece.

Speaker B: So Kim, as you look ahead over the next year, two years, what changes or trends should brokers be aware of when discussing PEO clients? Um, are you seeing that regulatory or compliance shifts, uh, in the industry, benefits and strategy evaluations? You know, maybe it's employer concerns you're seeing more frequently. What would you outline as being trends for change?

Speaker A: So I think, you know, obviously the benefits world's been really difficult this year. Um, so most importantly is making sure that the company has the right benefit strategy and they're aware of all their solutions. In the PEO world, I think it's super important that every broker is just making sure their client is aware of PEO as a model. And then when they're using us, like from an ADP perspective, I think this benchmarking report is super important because we've been able to really help clients identify maybe where some of their pitfalls are, where maybe they're over contributing, for instance to a 401k that um, employees don't care as much about right now. Right. Because people want money in their pocket or maybe they're offering a high deductible health strategy that, you know, lower income employees or younger employees would want to take advantage of because again, all they want is more money in their pocket. I, um, think the compliance challenges are huge. I get asked weekly about leave management support. You know, it's just very complex because every single state is got a different policy and it's constantly changing. And right now the world that we're living in, um, I mean Cassie, you and I see a lot of small businesses, these HR people who sometimes aren't even HR people, just don't have the bandwidth. They don't have the time or the resources to put into setting themselves up in every single state, making sure that every person has access to healthcare, making sure their workers comp is set up correctly. I mean, people are running around like crazy. And I think the biggest misses employees need the people in their organization. They need their leadership. Right. You know, we're seeing, you know, all these different generations in the workplace. Uh, people want to see somebody present. They want. And you want to make sure you're hiring the right people. So the ability to be strategic is super important. And when you join a peo, what's great is we just do so much behind the scenes and most POs will do this, but having someone else to do the COBRA administration, you know, having some support with the onboarding, it's amazing to me how many companies are still doing paper processes. You know, a lot of employees get turned off by that, and it could really be limiting their candidate pool. So I think it's just really important that, you know, we're also helping companies understand they can get relief. And while benefits, yes, are definitely a driver that we see, you know, pushing people towards, it's really important that brokers are always kind of being aware of what's going on with their groups. I'm now seeing brokers for the first time realizing they have to talk to their groups year round. Right. Like, they have to know what's happening. Just because there's so much going on in this industry right now that, you know, people are subject to be taking calls from other brokers on top of all the payroll companies, on top of, you know, all the financial advisors. So I think really making sure that, you know, brokers are leveraging Savoy, you know, helping their clients to understand their options is gonna be important as we navigate all these new trends and all the things that are changing in the workplace.

Speaker B: Yeah, it's. It's crazy because. Because I'm still a paper person myself. I would prefer to have, you know, I have a million notes around, and then I realize that I can't even find what it is I jotted down because it's on three notepads before. So I. I need somebody to automate my life. But in the meantime, we are coming up close on time, which seems really crazy because I don't feel like we've been, you know, speaking more than five minutes. So I'm going to close off with one more question and we're going to have to tie it up pretty quickly. And that is, what is the biggest misconception about PEOs? What would you identify that stands out for you?

Speaker A: So, honestly, what I get the most is, uh, I'm going to go from a broker standpoint here. And the broker standpoint is that they lose access to the client, they lose their relationship, they lose touch. And I think that's the biggest fear and road block to, you know, encouraging their clients to come onto peo. And what's great, at least I know from the ADP side of the house, we've become so broker friendly that the minute the client is signing paperwork, they're signing a form to give the broker and to give Savoy access, to be able to speak to the HR business partner, to be able to speak to the benefits team. You know, we make sure that that broker is included and that they're the first ones to receive the renewal documents. And we're having those conversations with the brokers before we're even having the conversation with the client so that the broker has an opportunity if they need to shop the group or if the group has outgrown the PEO model, they have the chance to be the ones to bring that back to the group. Um, the other piece with it is, in addition to the broker service team, the broker with ADP gets escalation points. So they still get to look like the hero in the client's eyes, that anytime there's a problem, they can come back. And if they bring it to you or they bring it to me, we're immediately able to engage that escalation team and get that situation resolved as soon as possible. And that person also handles our weekly attrition report. So every week we get a report to show us if there's any clients that are at risk of leaving. And if any clients are at risk of leaving, we're immediately notifying the broker so that they can get involved and they can help have the conversation and see what's going on. And again, if that group wants to come off of the PEO model, at that point, the broker's able to take them back and, you know, kind of put them wherever they want to place them. But I think it's really important to help to get rid of that misconception that, uh, when you turn over a group to a peo, right, it's not. It's. Yes, it's set it and forget it in the sense of the revenue standpoint. Right. Like, but at the same time, we're going to keep you a part of that client while they're here with us, and we're going to make sure that, you know, everything that's going on that's important to the relationship.

Speaker B: Kim, this has been extremely helpful and we appreciate you taking the time today to talk to us. And thank you for sharing your practical insights for Savoy brokers. Listening if you believe ADP Total Source may be a fit for one of your clients, your first step should always be to engage the Savoy PEO center of Excellence. We'll help validate the proper fit, guide the strategy and manage the process end to end. Thank you again to Kim and ADP Total Source, and thank you for everyone tuning in to the Savoy PEO Spotlight. We will see you again on the next episode.