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HR Outsourcing Services 101

For the next 6 weeks, our blog will be getting “Back to the Basics” of Human Resource as America goes back to school. We will be presenting a crash course on what companies can expect if they sign with HR Strategies and begin to use our services; a kind of HR Outsourcing 101 course, if you will. We will start with payroll, move to employee benefits, and work our way through workers’ compensation, regulatory compliance, HR consulting, and training. If you are interested in learning more about what we do, please contact us today at 770.339.0000 or here on our website: Contact Us Page

HR Outsourcing 101 Book


The Importance of Communication in 401(k) Offerings

We have discussed 401(k) plans in the past, either by simply mentioning retirement planning in passing or dedicating full posts to the subject. If you are a client or a follower of this blog, you know that HR Strategies offers 401(k) programs, retirement planning, college financial planning, and many other ways for you and your employees to save money.

Recently, an article came out by Stephen Miller concerning 401(k) matching. Miller is an online editor/manager for SHRM, the Society for Human Resource Management. The article, entitled,401(k) Match: ‘Thresholds’ Drive Participation More than Rates: A sampling of the wide variety of matching formulas”, discusses the importance of employer-to-employee communication in regards to choosing a 401(k) plan matching formula. Miller draws from a July 2012 report by Brigitte C. Madrian, the Aetna Professor of Public Policy and Corporate Management at the Harvard Kennedy School of Government. Her findings show that changing matching formulas can result in higher savings for employees, while keeping the employer contribution the same. Here is a basic scenario using two example formulas from the article:

Employee A and Employee B earn the same yearly salary: $100. Here are the two match formulas they have to choose from:

Employee A

Employee B

50% of the first 6% of Salary

25% of the first 12% of Salary

EE Contribution/Quarter=$6

EE Contribution/Quarter=$12

Remaining Yearly Salary=$94

Remaining Yearly Salary=$88

Employee A sees the higher match percentage and goes with the 50% of the first 6% of salary. Employee B does a few equations, and decides to go with the 25% of the first 12% of salary.

50% of the first 6% of Salary

25% of the first 12% of Salary

50% x (6% of $100)

25% x (12% of $100)

50% x $6

25% x $12

ER Contribution/Quarter=$3

ER Contribution/Quarter=$3

As you can see, the employer contribution is the same for both employees. However, as we go further, we see that there is a definite difference in the employee savings.

EE Qtly Contribution+ER Match=$9

EE Qtly Contribution+ER Match=$15

Employee Earns= $36/year

Employee Earns=$60/year





Madrain states that there is a risk that employees are more likely to perceive the higher rate/lower threshold as a better savings plan. However, in the example above, we can see that even though the employer match is the same for both employees, by choosing the lower match rate/higher threshold, Employee B is earning an extra $18 a year. Furthermore, the effect of higher savings is compounding! Employees contribute to their 401(k) on a pre-tax basis, thus increasing savings and take-home pay, while setting aside money for their retirement. In most cases, and with proper alignment of education and diversification tools available, higher deferrals typically result in higher returns, increasing the compounding effect of savings.

While those of you who are well versed in the language of 401(k) might see this as common sense, a majority of your employees may not see it that way. This is why the article stresses the importance of making sure your employees are in the know about 401(k) matching. The cost will stay the same for you, the employer, but your employees will be benefiting from increased savings and the knowledge that their employer has helped them work towards stability in their financial future.

The Employee Retirement Income Security Act (ERISA) identifies the fiduciary responsibilities of plan sponsors to include education of participants and eligible employees. Lack of education often leads to inadequate diversification of assets and thorough understanding of the plan’s features. Each plan sponsor must ensure that they dedicate the proper resources and time to thoroughly educate their employees about their 401(k) plan.

Don’t forget, HR Strategies offers a variety of retirement savings plans. Our knowledgeable HR Consultants will help your employees with their 401(k) needs, while helping you to fulfill your fiduciary responsibilities.

Contact Us Today!

HR Strategies HR Consulting Case Study

HR Strategies Aids in DOL Audit


HR Strategies supplies a variety of human resource solutions to many different client companies, including HR consulting and regulatory compliance. For many companies, the thought of a DOL audit can be stressful and overwhelming. HR Strategies recently had a client, a 20 employee commercial cleaning company, who was subject to a US Department of Labor Wage and Hour Audit. HR Strategies’ client was investigated on hours worked, overtime, salaried vs. hourly status, work permits, and time cards; during which current and former employees were interviewed. The client needed to supply information and handle all requests made by the US DOL, in a timely and professional manner, while still focusing on running their business.


The client notified HR Strategies of the investigation and HR Strategies was able to work closely with the client. HR Strategies provided consultation and helped manage the investigation. With the aide of HR Strategies the client was able to provide all necessary documentation on payroll data and at the same time shored up the clients current pay practices. In addition, HR Strategies staff was able to join the client to meet with the investigator in person multiple times, for a total of nearly 5 hours, thus providing the client with the reassurance of having a professional HR team on their side.


At the end of this vast investigation, no violations were found and no fines levied on HR Strategies’ client. The client was very appreciative of the extensive efforts made in aiding them, and stated that without HR Strategies he could not have managed this exhaustive investigation.

See All HR Strategies Case Studies Here

Attention Clients: Do you offer a 401(k) plan?

Is it time to offer a 401(k) plan with us?

As 2010 winds down, planning for 2011 will soon be underway. Our 401(k) plan through Transamerica is a great tool for employee attraction and retention. You will be offering your employees a high-quality 401(k) without having to assume responsibility or liability for the plan. Yet, you still have plan design options. For example, you may select no employer match, an employer match of your choosing, or a safe harbor match. 

The benefits of participating in our 401(k) plan with Transamerica include:

  • No administrative work for you
  • Relief of the fiduciary responsibilities
  • No cost for plan set up, discrimination testing, or government spending

Click the picture below to check out the video from Transamerica:

Call us today to set up a 401(k) plan to match your company’s needs!

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