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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