By popular demand, Staffing Talk has been following every new development the Affordable Care Act can dish out because, as readers like you have made clear, it’s kinda a big deal to staffing. Unfortunately it’s been a little while since we’ve had an update for you, and because of that you’ve sent in a barrage of emails and comments calling for more. Of all those messages, by far the most frequent is your desire to read about examples of what staffing companies are planning to do about ACA.
Well as you know, the government is releasing regulatory updates practically weekly to inform people before it goes into effect on Jan. 1, 2014. In turn, staffing owners, insurance companies, and attorneys are scrambling to wrap their heads around all this and develop a feasible plan for all involved. All this has added up to a perfect storm of confusion, so your cries for stories about what staffers are planning was a tall order … but we’ve finally delivered.
We reached out to a lot of staffing bigwigs, but sadly most of them said they were still trying to figure it all out. As you can gather from the three answers below, it’s still a little early for people to know 100% about what they’re gonna do, but they have a pretty good idea of how their business will change because of the impending legislation.
David Webb, president of SelecSource Staffing Services
SelecSource has been staying very close to ACA before, during, and since the election. We will be incorporating a few different strategies to hopefully enrich the value we can offer our clients. Our evaluation suggests in some cases we will be forced to extend a price increase where there are long term associates working in the client environment. The models we have already presented to these clients appear to still fit into their budget. In other cases, we have been able to illustrate to other clients that flex up and down throughout the year that we can assume a larger ratio of variable hour to their FTE and create savings. Since we have been, and still are, somewhat uncertain on the entire impact of ACA, we began shifting our branch model to be leaner while facilitating some process improvements that will sustain growth without increasing staff. This began in 2012 and has resulted in significant savings in our overhead in 2013. We remain optimistic that we will thrive with ACA and our preparedness will enable continued growth over the next few years.
Jerry Brenholz, president/CEO of ATR International
To date, we have not made changes or taken any specific financial steps as a result of the ACA. At this point I think everyone is still working to fully understand the ramifications and sort through all the advice. There are both financial and legal implications that need to be carefully considered before any decisions are made. My staff has been actively attending the programs offered by various industry and other organizations, including the upcoming ASA Staffing Law Conference. It’s likely that changes will be implemented; new business regulations almost always result in some kind of an adjustment, but so far we’re still in the educational phase.
I can say that I am not inclined to play numbers games or put limits on internal hiring or placements in order to avoid triggering certain provisions. We are in the business of putting people to work, something that our country needs now more than ever. I’m confident that ATR will be compliant with the ACA while remaining focused on our true mission – helping clients and consultants alike to succeed. There may be parts of the legislation that need fine tuning or even significant changes, but overall I support the goal of the Act – making healthcare more affordable and available to everyone. We’ve been a leader in the staffing industry in providing benefits and whatever decisions we ultimately make we’ll remain committed to doing the right thing for all our people.
Michael D Hayes, owner of Momentum Specialized Staffing
It’s a shame that we have to plan to get around a giant headache caused by the Feds. Being a boutique firm, my plan right now is to stay below 50 employees until the train wreck is cleaned up.
Right now we run between 25 and 35 employees, and we’ve been doing a lot more direct hires, which is really good because the only expense we have is time (we don’t have to worry about workers comp). We’re more of a niche provider, so we’re not expecting to get huge. If we grow, it’ll probably be to move into consulting and speaking engagements. So, as a small guy, the best thing for me to do is stay below 50 for the time being. I know that at 45 to 50 employees we can do really well, and I’m happy with that.
At least for now, until this all shakes out. We’re never fully going to be rid of Obamacare, but after a year or two, who knows? Maybe it’s a trainwreck and the administration will pull a bunch of issues out of it, or a new one will come in and do it.
When you look at workers comp going up 15-20% and the cost of healthcare insurance itself, it’s gonna force a lot of mid-sized firms to raise their rates significantly. I’ve been reading all about it and thinking about it, and there’s a lot of confusion from people about what they should do. There’s gonna be a lot of adjustments to cost structures, and with all the uncertainty they might throw the biggest numbers against the wall to just ensure they don’t fall short. I’d love to see what the big guys like the ManPowers of the world are going to do.