In a day and age of a global economy, the name of the game for businesses is growth and market share. Business is done more rapidly than it has been in the past and what took weeks now takes milliseconds to transpire. To remain competitive, businesses not only have to make accurate decisions, they must do them without a second of hesitation.
Sadly, many businesses fail by making one bad decision. When it comes to service sector businesses, one of the most important statistics is the client retention rate of an organization. Why? Companies can spend millions of dollars annually to attract new business, yet their ability to retain existing clientele is even more important. For example, what good would it be to a company if it increases sales by 10%, but it also has an attrition (loss) rate of 10%? The only way for a business to have organic growth is to add more new clients to its roster than old clients that leave.
The telltale statistic that defines a great service company is its client retention rate. Bar none, no other statistic matters. If a client is getting superior service from a business at a price point the organization finds agreeable, they will likely never leave as a customer
Statistics that you can believe!
Over the past 3 years, America’s Back Office has had the following client retention rates:
- In 2016, 100% of client’s renewed!
- In 2017, 98.8% of client’s renewed!
- In 2018, 99.95% of client’s renewed!
What does this tell us?
That America’s Back Office has an amazing client retention rate! Well, yes, but why? For the average client retention rate to be north of 99%, the relationship between ABO and its client’s companies is one of trust and confidence.
For nearly 500 very different organizations from all over the country to consistently retain ABO as their outsourced HR provider indicates that they truly value the service they are receiving and see tremendous value in the price of the services as well.
It is generally these two factors that dictate a relationship in business. Is the client company being well serviced and is the service at an affordable price point? Service and price are the major influencers in any business relationship. With a more than 99% three-year retention rate, ABO is meeting and exceeding the expectations in these areas for a vast majority of its clients.
Verify, Verify, and Verify some more!
Almost all companies will tout their prowess in a given industry, including ABO. However, at some point there is a discernible difference in levels of service offered between Professional Employer Organizations (PEO’s). Or, as some people like to say, “This is literally where the rubber meets the road.”
A legitimate way to find out about a PEO is to ask for a list of its references. Make sure to ask penetrating questions that relate to things that may have gone awry and how the PEO addressed and rectified these situations. Call several of them and do the proper due diligence up front. This should arm you with a high degree of information that will help to make the right decision when choosing an outsourced HR partner.
Deciding whom to hire for your human resources administration isn’t an easy decision and making the wrong one can lead to major problems that are not only difficult to unwind, but can be quite costly in terms of time, money, and efficiency.
This Will Never Work…Or Will it?
Recently, America’s Back Office went through the most thorough vetting process in its 21-year history. They were one of 35 PEO’s being vetted for a large 200 employee multi-state account that prominently advertised itself all over the media and TV.
The main concern from the client was a lack of trust with outsourcing its HR because it had been turned inside out by one of the largest PEO’s in the country. The previous PEO had made serious errors that the company was still dealing with a full 24 months later. The company CEO hired an outside consultant to try to fix the issue and to spearhead the effort to find “the right PEO.”
Despite the CEO was hesitant saying “it won’t work”, the consultant sent out a 90-question document to all the parties chosen to be vetted. Only 50% responded! That meant 50% were too lazy to even respond (by the way, is that how you want your HR managed?). Of the remaining 50% only three remained at the end of the evaluation period.
The consultant later told America’s Back Office that the level of responsiveness from the beginning made them the leader throughout the entire vetting process. In the end, America’s Back Office earned the account and has been getting rave reviews ever since by this once pessimistic business owner. That CEO, who was burned by two HR service industry leaders, now sings the praises of the industry he formerly loathed of due to poor management of his account by the companies with “the names you know”.
Remember, statistics are empirical evidence and should not be ignored. One must look beneath those numbers to find the true answers about any PEO service provider.