Wasting Money with Bundled HR Services

Did you ever see one of those carnival tricks where the
trickster places a pea under one of three shells, moves
the shells all around, and then has you guess what shell
the pea is under?

It’s interesting how the trickster wins every time,
primarily because the pea isn’t under any of the shells.

This “shell game” is similar to what often happens to
companies that purchase Human Resource (HR) services as a
bundled package with payroll and other seemingly related
services.

We recently “rescued” a client from this game. The client
had less than 20 employees and purchased HR services and
payroll services from a large payroll company.

When the client asked the payroll company to break-out the
two services using our template, the client discovered
that it was paying $300 per week ($15,600 per year) for HR
services alone. The client was paying an additional
amount for the payroll service.

Essentially, the client was paying over $15,000/year for
on-call HR services and the payroll company was getting a
great “annuity.” The client ended that relationship for
HR only and is now using our à la carte HR program and
saving thousands of dollars annually!

HR POINTER: There are times when bundled services can
provide a savings. However, it seldom works with services
that are their own specialty such as employee benefits,
payroll, Human Resources, etc.

If you know of any firm that is paying for a package of
services that are bundled together under the concepts of
economy of scale or one-stop shopping, we would be happy
to share with them our template for isolating the HR
component of that bundled package.

If you would like to receive our template, contact the
Member-Partner in your area or our corporate office and
help an unsuspecting company avoid being victimized by the
“bundled service shell game.”

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