Looking for ways to minimize your employment-related expenses?
As one of the biggest line items on your P&L, labor-related expenses can have a big impact on your overhead – and ultimately, your profitability.
Unemployment taxes are one of the few personnel taxes you can directly control; therefore, they present significant opportunities for minimizing expenses. Use these tips from Wood Personnel to keep your tax liability to a minimum:
- Use consistent hiring practices. If your business can build a history of few unemployment claims, it may be able to reduce its unemployment tax rate. So find ways to hire smarter. Use consistent screening processes, including pre-hire skills assessments, character screenings, drug tests and thorough background checks to thoroughly vet your candidates. If you don’t have the time or internal resources to manage these on your own, work with a leading Nashville employment agency like Wood Personnel.
- Write everything down, every time. Everyone knows that documentation is important, but do you have the right processes in place? And are they followed consistently? Whether you’re conducting a performance review, taking disciplinary action or terminating an employee, adhere to best practices for documenting these important events. Many times, documentation is the only means an employer has to back up the decision to terminate. Make sure you create solid paper trails to protect yourself as an employer.
- Stop the revolving door. The Federal Unemployment Tax Act (FUTA) imposes on employers a tax rate of 6 percent on the first $7,000 of wages paid to each employee per calendar year. So if a single employee holds a position for the entire year, you pay unemployment taxes only for that employee. But if three employees hold that position within a single year, you may have to pay up to three times the amount. Reducing turnover will help you control your total unemployment costs.
- Diligently audit statements. We’re all human and we all make mistakes. Processing countless claims, government workers do make clerical errors, assigning unemployment claims to the wrong employer or charging employers for workers’ claims that have been disputed and rejected. So be proactive. Diligently audit the benefit charge statements you receive to ensure that every claim is legitimate.
- Consider re-employment strategies. If you are forced to lay off a large number of employees, it may make financial sense to offer outplacement, job coaching or other re-employment services. Helping employees transition to new jobs can control the duration of non-protestable claims – those claims that typically result in the longest duration and highest total benefit payout.
Use Staffing Services to Reduce Unemployment Costs
Wood Personnel’s Nashville staffing services can help you control your unemployment costs by breaking the hire/layoff cycle. Whether your production levels vary by season, or you’re suddenly faced with a huge project, we provide flexible access to the Middle Tennessee’s best talent – for as long as you need it. Once your demand returns to a normal level, we handle worker reassignment for you.
The bottom line? When you use temporary staffing, you pay only for productive hours worked. Managing unemployment claims for temporary staff is our responsibility, not yours.