Thursday, January 24, 2013

2013 - A Year of Incredible Opportunity

When one year ends and a new year begins, many people sense the opportunity for a fresh start and make resolutions for doing things differently in the new year.  Unfortunately for human nature, the majority of these people fail to make any real change because it can be uncomfortable or scary to do something new.  The people and companies that are successful in overcoming their nature typically reap the rewards, whether it is losing weight or improving their bottom line.  Here are my top 10 reasons why 2013 is the year to make changes to improve your staffing firm.

10.  The world didn't end in December 2012, so our lives and our businesses will likely continue on for year's to come.  No more procrastinating with the hope that Doomsday would bail us out.

9.  Even though the major part of the Affordable Care Act doesn't go into effect until 2014, the 12-month "look-back" period started on January 1st, 2013.  If your business has not already started planning on how to use this "look-back" to minimize penalties for uninsured employees, you may want to figure this out before the middle of 2013.

8.  Uncertainty in the government & economy will force many companies to consider adding to their contingent workforce.  This uncertainty is creating opportunity for staffing firms to find clients that have never used a staffing agency before.  These clients will need to be educated about the value of your service and may be willing to pay a mark-up that will provide a healthy profit margin.

7.  Improving the value provided to your clients will solidify your place as their go-to staffing provider.  With all of the changes during the next year and increasing costs of Workers Comp, Health Care, etc., there has never been a better time to provide a valuable service in order to keep clients at the right mark-up rate.

6.  Workers Comp rate increases and coverage restrictions are not slowing down.  This is the year to explore the long-term options that will allow you to maintain profit margins for the years to come.  It will be important to find an insurance partner that is comfortable with the types of placements that you make and where they will draw the line and deny your ability to service a client.  Have a plan in place to continue to service all of the business that you choose to service, rather than just letting the insurance company dictate your client base.

5.  Change is difficult, but with impending changes to tax laws, health care reform, and the constantly changing environment in the staffing industry, you don't have a choice.  2013 is the year that you and your staff will probably spend more time researching and making changes to your business than actually getting out and finding new clients.  Spend a little extra time and make the changes that will impact your bottom line for years to come.

4.  Changes in technology make servicing a business easier 24/7 from anywhere.  Researching the appropriate changes in technology will allow you to stay ahead of the competition and make your employees more productive.  This is the year to explore software and hardware options that tailor to your business and will allow you to impress your clients.  Use webinars, video chat, blogs, your website, and email to keep valuable communication lines open with clients and prospects.

3.  The health care reform is going to be on the minds of many business owner's in the coming months.  Sharing your knowledge with clients and potential clients will create a sturdy foundation for building a long-term client relationship.  Be the market leader in your area and help your clients prepare.  I would bet that when you help their business succeed, they will return the favor ten-fold.

2.   Group captive insurance programs will be very competitive in 2013.  During the past few year's guaranteed cost insurance was being offered to staffing firms at a deep discount by a dozen different companies.  Now, the discounts are gone and so are half of the insurance companies.  Group captives can prevent large fluctuations in premium and are able to put profits into your pocket, rather than the insurance company executives.

1.  Make changes to improve your business during 2013 so that you can make a resolution in 2014 to enjoy being three steps ahead of the competition, and the increased profit margins that go with it.

So get your staff together and talk about what changes will be made this year.  Get everyone to pull together and make 2013 a year of exciting improvements that will increase the success of your business for years to come.

Visit today to learn how we are helping staffing firms make more money from the pitfalls of Workers Compensation, Health Care Law Reform, and More.

Wednesday, August 29, 2012

Loss Picks & The Staffing Industry

One of the most common questions I am asked by the owner's of staffing firms is "What kind of quote can you get for me?"  This inevitably leads to a discussion about insurance companies and the outrageous rates they charge for workers comp.  At this point, I typically ask, "Do you have an outrageous 'loss pick' that would justify being charged those rates?"  And then, I see a confused look, practically begging me to explain what the heck a "loss pick" is.  So...what is a "loss pick"?

A loss pick is simply a prediction of the total claims dollars that will be paid by the insurance company during the policy year.  These are developed by the insurance company actuaries using statistics and predictive models.  In another blog, I will explain in detail the process for calculating a loss pick.  For today, suffice it to say that the loss pick is calculated using the past claims experience of a business.  The more claims dollars paid, the higher the loss pick.

Knowing your loss pick is one of the most empowering bits of knowledge for a staffing firm owner.  If you know your loss pick, you can figure out what your rates should be for any type of insurance program.  Guaranteed cost, retrospective rating, captive insurance programs, and large deductible costs are all calculated using your loss pick.  You can use your independent loss pick to negotiate your renewal and compare the costs of different programs.

Once you have your loss pick, calculated either by yourself, or your independent risk manager, use it to negotiate with your insurance underwriter's loss pick, which will almost always be higher than yours.  The insurance company loss pick will always be more conservative in order to justify higher rates.  Negotiating a decrease in the underwriter's loss pick will always make a bigger difference than just trying to negotiate a lower premium.

Insurance companies have a target ratio of total claims (Loss Pick) vs total premium.  Guaranteed cost programs typically aim for 30 - 40 % in claims dollars vs total premium.  Group captives may aim for 45 - 50% or higher in claims dollars vs total premium.  Top notch captives may be even higher than that, resulting in lower overall costs for the owners.  Large Deductible programs and Retro programs depend on a variety of factors, but they are always tied back to the loss pick.

If you want to start lowering workers comp costs, focus on lowering your loss pick.  I will dedicate a future blog to the topic of lowering your loss pick, so stay tuned.  And before you complain about outrageous insurance rates, your time might be better spent making sure that you don't have an outrageous "loss pick".

Fair Warning: Calculating an accurate loss pick can be a very complex task, so don't hesitate to find a Risk Management Professional that can assist you.

Visit today to learn how we are helping staffing firms make more money from the pitfalls of Workers Compensation, Health Care Law Reform, and More.

Wednesday, August 22, 2012

Why are insurance costs rising?

Staffing firms are constantly asking me why insurance costs are always rising, and every year the pinch is getting tighter.  Workers Comp premium increases are more painful to staffing firms because they know that their markup rates are currently set for all of their clients.  They will have to pay more money without being able to make more.  The cost also has nothing to do with the size of your client, whether it is $100 of payroll or $100,000,000 your cost will be the same percent of all the payroll at that client. 

Competition between insurance companies often provides the biggest swing in premium costs from one year to the next.  Rates from one insurer to the next can differ by 30 – 40 % at times, even if they both pay for the same exact claims.  Why such a big variable from one company to another?  Because most insurance companies avoid the staffing industry like the plague.  There are only a handful of insurance companies that actively pursue staffing firms.  In any given year, 2 or 3 companies will decide to start a staffing insurance program, while a different 2 or 3 will stop.  It is often easy to avoid the ridiculous jumps in premium by sticking with a long-term insurance program that is committed to serving the staffing industry for years to come.  But there are still other issues that cause premium increases…

Like the experience mod.  Staffing firms can have huge jumps in experience because the client base and exposure can change drastically from one year to the next.  Say you have a client that was supposed to have a very safe workplace.  After 2 months and 25 injuries, you decide to part ways because they put the temp employees in the most unsafe positions.  No matter what happens, when those claims are applied to your mod, you will see a major jump in your premium that will affect you for the next three years.  Of course claims are always getting more expensive because of…

Rising healthcare and claim costs.  The costs for even somewhat minor injuries have skyrocketed in the last few years.  Medical costs increase by 5-10% annually, and insurance companies base their premiums on the costs of paying claims.  It makes you wonder why any insurance company ever reduces their rates?  Not to mention the cost of paying lawyers to explain the workers comp system to injured employees with the promise of a large settlement.  It almost seems silly for people to give a lawyer a cut from their settlement when most states have a set schedule of benefits paid for permanent disability resulting from workers comp injury.

At the end of the day, insurance costs are always going to be increasing.  As a staffing firm, the only steps that you can take to maintain a consistent profit are to make sure that your costs are stable and your claims are lower than your competition.  Injuries do happen to everyone, but they can be managed effectively to lower your overall cost in the long run.  Don’t expect the insurance company to do all of the work for you, because they understand that your rates will increase if you have claims and they will probably just end up making more money when they do.

Visit today to learn how we are helping staffing firms make more money from the pitfalls of Workers Compensation, Health Care Law Reform, and More.

Wednesday, August 15, 2012

What is a staffing firm?

I spend a lot of my time describing what I do to people who don’t understand the staffing industry.  When I first opened my insurance agency back in 2008, friends, family, and co-workers all gave me blank looks when I would say that we focus solely on providing insurance to staffing firms.  They would then ask what exactly a staffing firm does and my answer would typically be, “they provide temporary employees to businesses that need workers, but don’t want to hire their own employee”.  While this is technically right, I have developed a much better description for what every staffing firm hopes to do.

Staffing firms are actually providing their clients with a product.  That product is typically sold one hour of quality work at a time.  In this economy, there are millions of businesses that need a few hours of work done, but don’t have the need for another full time employee.  They turn to a staffing firm that can provide them with the best quality of work at the best price. 

Staffing firms obviously have a huge resource of candidates looking to work every day.  In order to increase sales volume, many staffing firms drop their mark-up rates to keep clients.  When the profit margin is lower for a client, they automatically start getting the candidates that provide a less productive hour of work.  All staffing firms promise the best candidates to all of their clients, but you can’t argue with economics.  Why would anyone sell a product at a discounted price if they knew someone else understood the value and was willing to pay for it?  Clients paying higher mark-up rates for temporary labor will certainly receive better and more productive temporary employees.

My experience working with the staffing industry as an insurance consultant has proven time and again that the most profitable firms (I have seen the financials to prove it) focus on educating their clients about their costs and holding their heads (and markup rates) high in the face of competition.  There is no doubt that some staffing firms quote lowball rates, but they are also making the smallest amount of profit on the payroll. 
At the end of the day, staffing firms that want to make more money need to stop serving clients that are not profitable and get a reasonable profit from every placement.  Taxes, Insurance Costs, Unemployment, and other expenses are all rising, so the cost of providing an hour of work should rise too.

Visit today to learn how we are helping staffing firms make more money from the pitfalls of Workers Compensation, Health Care Law Reform, and More.

Tuesday, July 17, 2012

New Website, Twitter, Facebook & Blog Launch

Today marks the official launch of our new website at  With the new website, we hope to spark a new movement within the staffing industry.  Our ultimate goal is to improve the profitability of staffing firms across the country.

We have decided to expand our social media presence with Twitter, LinkedIn, and Facebook.  Follow us on Twitter @trinitecorp or check our facebook page at  You can find our LinkedIn page at

During the last few months, we have added some great features to our site that will make life easier for our staffing firm clients.  Our client login area is accessible 24/7 and includes access to certificates, rates, and claims details.

Visit today to learn how we are helping staffing firms make more money from the pitfalls of Workers Compensation, Health Care Law Reform, and More.

A year full of changes...

Over the last year, Trinite has been transforming into the company it is today.  Since we are constantly finding ways to help our clients improve their profits and reduce costs, we are going to start sharing all of the latest and greatest ideas with the public through our blogs, Facebook, Twitter, and LinkedIn.  Our goal is to provide a competitive advantage to the owner's of staffing firms across the country.

We are in a changing time.  Obamacare is changing the landscape of health insurance.  Workers comp rates can vary between 30 - 40% from one company to the next.  The economy can't make up it's mind about whether it will continue to grow or not.

Trinite is changing with the times.  We have updated our website and logo to match our goal as a business.  Our focus is providing staffing firms with the tools they need to take control of their costs.  We will be sharing the detailed formulas that are used to determine insurance rates.  We will share methods to drive down claims.  We will discuss the current outlook for rising costs for staffing firms based on our conversations with other owner's across the country.  We will be using social media to distribute ideas that will help staffing firms increase their profits.

When you need help implementing our solutions, using our formulas, or finding the right insurance program that will be a long-term fit for your business, we will be here to help.  We are the staffing industry experts, and we look forward to working with you.

Visit today to learn how we are helping staffing firms make more money from the pitfalls of Workers Compensation, Health Care Law Reform, and More.