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How Will Small Businesses Make It?

Posted on: June 29th, 2016

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small businesses face tough times in an era of legislated benefits

Small business owners continue to face challenges in dealing with the rising costs of doing business. Annual increases in the minimum wage, combined with laws like MA sick time and the Affordable Care Act (ACA), are significantly increasing labor costs, and adding overhead to administer these new laws.

Small business owners are frequently asking themselves, “How can our small business make it in the current business climate”?

Larger organizations can insulate themselves by reducing office space, putting pressure on the supply chain or perhaps combining operations. But small businesses like a single boutique store, a hair salon or a small restaurant have fewer options — and feel the sting of rising labor costs even more.

Unfortunately, these laws are not going away. Many of the new laws, like minimum wage, are set to rise annually. More recently, the DOL just announced new overtime laws that raise the wage ceiling so that more than 4 million workers will be be eligible to earn overtime starting on December 1st, 2016.

Hardest hit will be non-profits, as well as retail stores, restaurants and hospitality.

Small business owners can raise prices to offset higher wages, but only so far. So, how will small businesses make it in the wake of increased labor costs and legislated benefits?

Message to small businesses — You can’t do it alone

You cannot expect you, the business owner, nor an office manager or an executive secretary, to stay current on all of these new laws. They are very time-consuming to understand, and have become so complex that’s its risky to think you can fully understand your responsibilities. Very often these laws require you to change your business process or company policy, and you’ll need guidance on the best ways to do that.

Suggestions to help small businesses “make it”

1.  Invest in HCM Technology

The cost of using human capital management (HCM) technology to manage your employees, keep you in compliance with these laws and process your payroll has gone down significantly thanks to cloud-based solutions. These systems, like iSolved HCM, are both affordable and necessary to help small businesses streamline their operations, collect required documentation, maintain information on their employees and track and report on benefits. See article: The HCM Uprising

Today’s HCM solutions go beyond HR & Payroll basics and come “fully loaded” under a single system. There are options for performance reviews, new hire on-boarding, document storage, applicant tracking, time & attendance, open enrollment and benefits administration and other components so you don’t need to buy or subscribe to multiple applications. See Managing Multiple Systems for the benefits of a single system.

With the growth of smartphones, it’s important that your HCM technology offers a mobile component that allows employees to access their pay and time off information, and perform other tasks, such as clocking in from a remote site, to reduce your administrative overhead and keep your employees moving.

 2.  Consider subscribing to ASO or PEO services

Small businesses today are afraid to take any action against their employees, including disciplinary action or termination, for fear of putting the business at risk for violating a new law or inviting lawsuits. Many are now seeking outside help to ensure that they are “doing things right” with regard to proper employee management practices and compliance. Retaliation is a big government focus right now – and to be avoided at all costs.

There are two types of services for small businesses to consider. Whichever is right for your business will depend on many factors, including level of control, budget and depth of services needed. Read ASO vs PEO – Understanding the Differences for further details.

An investment in an ASO or PEO service ensures that small businesses stay in compliance with current and new laws, provides “on-demand” expertise to guide you through employee events/issues that arise and ultimately takes the administrative and compliance burden off the business owner and internal staff. Think of this option as an insurance plan to protect the business against penalties, fines and lawsuits.

Read about MassPay’s ASO Services

 3.  Get involved

Here in Massachusetts, we have active Chamber of Commerce Associations, and industry associations like Associated Industries of Massachusetts (AIM) that fiercely advocate and lobby on behalf of businesses. Seek out similar associations and organizations in your area so that your ideas and opinions are heard.


These options provide small businesses with the technology, expertise and advocacy they need to reduce the administrative costs of running their business, keep them in compliance and have organizations fight for their interests within the legislative bodies. With these services in place, small businesses can then focus on strategies to grow their businesses and better weather this era of legislated benefits.

About MassPay

MassPay provides a cloud-based Human Capital Management (HCM) solution called iSolved, which allows small to mid-sized businesses to utilize technology to streamline their HR & Payroll processes and optimize their workforce. iSolved tracks detailed employee information, administers benefits, calculates work hours, processes payroll, offers employees self-service and keeps businesses in compliance with ACA and other regulations.

MassPay also offers ASO services to provide businesses with guidance on HR/Payroll issues, including adverse actions, and helps them set strategy for company policies, address compliance issues, and implement best practice hiring, on-boarding, training and performance.

Contact us to learn more!

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