6 Reasons to Outsource Your Company’s Unemployment Claims

Over the last 20 years, when I’ve told a friend or acquaintance what I or my company did, the reaction would range from confused stares to a cringe. I quickly realized that people didn’t understand the unemployment process, nor did they appreciate the opportunity that comes in properly managing their organization’s unemployment claims accounts. Most never realized that a service like UIS even existed.

This is an understandable reaction because, unlike other outsourcing opportunities, most companies aren’t confronted with unemployment issues on a daily basis.

Interestingly enough, this infrequency contrasts sharply with the reaction that people have when they do receive an unemployment claim. Most people hate dealing with it, largely because of the emotion invested in having to go through another round of confrontation with a former employee who has been the proverbial pain in their neck. Others feel that the process is stacked against them and just don’t like dealing with the unemployment insurance bureaucracy.

The most unfortunate aspect of this infrequency is that they fail to see outsourcing unemployment claims as the immense opportunity that it truly is. While the claims and tax sides of unemployment insurance are tightly intertwined, there is almost always an organizational disconnect between how claims management impacts the amount of unemployment insurance (UI) taxes that your company will pay.

Here are a six reasons why you should consider unemployment claims outsourcing as an opportunity to save your organization a lot of money and improve your bottom line.

1. Unemployment is expensive.You may not realize it due to the infrequency of dealing with tax rates or benefit charges, but unemployment insurance costs most employers a lot of money. Each claim can cost thousands of dollars. Each time a claim is charged to you, it negatively influences your annual tax rate. However, UI tax can be controlled or even eliminated in certain states!
2. UI is a controllable taxUI tax is one of the very few taxes that an employer can directly influence. There is a direct relationship in a company’s success in preventing claims to the amount of taxes they pay. It benefits your organization to prevent unemployment claims that are unwarranted. Protecting your account is an opportunity!
3. Understanding what you are protecting.Most employers don’t realize the value and importance of their UI account. I explain to customers that the money they pay into their UI accounts should be viewed as an asset like any other tangible asset. If you pay $100,000 into your UI account, you are never getting it back. The only benefit this money ever creates for your company is to use it to drive down future rates and minimize your tax liability. Make this money work to your advantage by protecting it!
4. Utilizing an expert.If you view your UI account balance as a valuable asset that must be protected, you likely are to change your strategy on how you protect it.UI is unique in labor law as it has its own set of rules and laws that govern it. Using an individual who is experienced in this process greatly enhances your ability to prevent claims. Our clients are amazed at the cost benefit in using our service. By outsourcing your claims management, not only do you save thousands of dollars, but a lot of time and aggravation
5. Eliminate stress and aggravation.When I first started selling this service 20 years ago, I did what any other good salesperson would do: I emphasized the cost savings. But I quickly realized that an equally important motivation for outsourcing unemployment claims management is that people HATE dealing with it. For every person who sees the monetary value in letting us manage their claims, there are three more who are thrilled not to have to mess with it. It is a bonus—eliminating another task off their list while saving 20-50 times their annual service fee while doing it.
6. It pays for itself.How many services do you utilize where you see a clear cost savings? The single biggest thrill I get when we engage with a new client is when we show that we paid for ourselves in the first couple of claims we process for them.If it is done right, and the proper amount of attention and expertise is applied, you have an opportunity to save an immense amount of money. Whether you are a small or large employer, the savings will have a positive impact on your bottom line!

As I stated earlier, most employers have never heard of our service, but the clients who do use us would tell you that it is one of the best financial and stress reducing decisions they have ever made. If you want to add profit to your bottom line or simply just want to get it off your desk, give us a try. I promise you will not be sorry.