Where Is The Pain

One of the new buzz terms in the marketplace today is, “Where’s the pain?”

This question is asked to quickly get to the point of what’s preventing a business form accomplishing any particular goal.

For a small business, there are at least two major categories of pain: marketplace pain and organizational pain. Each has its own list of sources, but there is one common cause: They both result from trying to be competitive.

We’ll save marketplace pain for another day. Today, let’s talk about organizational pain.

Organizational pain happens when the business lacks the critical mass to adequately deliver resources at the level at which it wants to compete. The classic example of organizational pain for a small business occurs in the area of human resources.

A small business has too many hats to wear and not enough heads to put them on, so we must hire and keep people who can handle multiple assignments effectively. And in the 21st century, employing smart people is more critical for small businesses than ever before due to one contemporary fact: New technologies have given us the ability to compete for higher levels of business than ever before.

But recent small business surveys show that finding and keeping qualified people is a consistent area of pain. Of course, qualified people can be found, but like anything else of top quality, they cost more. So when a small business identifies HR pain, the discomfort is likely not in the quest, but rather in the compensation. And even if a small business finds the funds to compensate top candidates, there is also the painful issue of benefits, like health insurance and a retirement program, which can add 25 percent or more to HR costs.

Like the story about the young man who grew old waiting for real estate prices to come down, the same thing will happen to us if we delay offering benefits to our employees while waiting for benefits expenses to come down. But there are some things we can do to make this kind of organizational pain convert to competitive advantage, and it’s found in Blasingame’s Second Law of Aggregation: Aggregation prevents aggravation.

The key to minimizing pain associated with providing a comprehensive and competitive benefits plan is to aggregate HR requirements and resources with other small businesses. Until laws are passed that allow for more aggregation, like Association Health Plans, which permit small businesses to purchase business insurance in groups across state lines, the next best thing is to join a Professional Employer Organization or PEO, which is also known as employee leasing firms.

These are not staffing firms; you hire and manage your own employees like always. But you and your employees become part of the PEO’s larger payroll group, which connects you to huge breaks in all kinds of insurance coverage and other benefits management. To find out more about PEOs, go to www.napeo.org

Write this on a rock…
To alleviate organizational pain, think aggregation.