For Total Solutions, 2023 is year of Professional Employer Organization

Outsourced services provider Total Solutions expects to double its staff of 20 by the end of the year due in large part to its one-of-a-kind in the Quad Cities Professional Employer Organization (PEO). And its leaders say, that’s just the start of a period of “extreme growth” for the eight-year-old company created when QC entrepreneur […]

Outsourced services provider Total Solutions expects to double its staff of 20 by the end of the year due in large part to its one-of-a-kind in the Quad Cities Professional Employer Organization (PEO). And its leaders say, that’s just the start of a period of “extreme growth” for the eight-year-old company created when QC entrepreneur Aaron Tennant decided to centralize the administrative services required by his growing family of businesses. At the time, he owned Tennant Trucking, which had 300 employees, and he said he found himself relying on its staff to do back office work for his other companies. “I had friends in the same boat and one came to me and said ‘I need to take it somewhere else,’” Mr. Tennant recalled. So rather than continue to burden his Tennant Trucking office staff with those responsibilities, he said, “I think I’ll just start another company that provides these services.”

At first, his companies were the new company’s only clients. So after he sold his Colona-based Tennant Trucking, “I parked myself over at Total Solutions to help grow it a little bit,” Mr. Tennant told the QCBJ. He said he quickly discovered “I’m not not a manager. I’m a boots-on-the-ground type guy, so it didn’t work well with me leading the company. So I hired people to run it and since then it’s taken off and done well.” So well, in fact, that Total Solutions President Kristin Berry told the QCBJ she expects the PEO to go from serving 275 “co-employees” to 875 by the close of 2023. The company’s larger, even more aggressive goal is to have 5,000 co-employees by the year 2030.  The PEO’s expected growth also is responsible for its recent move to bigger quarters at 111 W. 76th St., Davenport. “The PEO is very unique for our area,” Ms. Berry said. “There are no other true PEOs in the Quad Cities.” Total Solutions PEO, Ms. Berry said, is on paper a 275-person-strong company that is used to buy health benefits, ancillary benefits, 401(k) plans and worker compensation coverage. “So we have more buying power than, let’s say, a business that employs five-10 people.”

Under a PEO, Ms. Berry added, “You truly co-employ the employees in a long-term relationship and Total Solutions is the employer of record and then we lease the employees back to what we call the worksite employer.” Who benefits from a PEO?  “The reason is different for every company,” she added. “It’s either they want to start offering health benefits and they don’t know where to start and we handle the compliance, the payroll, the health benefits administration. Or maybe they need access to work comp and we can be more competitive on workers compensation rates than what they could be on their own.” Ultimately, too, PEOs allow owners to focus on growing their business while leaving the details of HR and payroll to Total Solutions’ expertise. Many times a business of five to 20 employees doesn’t keep an HR person or payroll person on site, Ms. Berry explained. “So it's the owner trying to maneuver through it.” At Total Solutions, she said “we have that expertise on our team, and really through the PEO the employers don’t lose any control. They can hire or fire on their own. They can provide direction to their employees. We are just the W2 and paystub employer.” Today, the PEO is Total Solutions’ fastest-growing service and is attracting all sizes of businesses including Mr. Tennant’s own Cantrell Towing & Recovery company. In spite of that, however, Mr. Tennant said he was not an early fan of the PEO concept. “PEOs were very popular in the trucking space where I used to be,” he told the QCBJ. “I used to get pitched on it quite often and I was very closed-minded and said absolutely not. There’s no way I’m ever going to ‘give’ my employees to somebody else just to save some money or worker’s comp and health care administrative needs.” Later, however, he decided the model would be good for small business owners because it could take some of the administrative burden off their desks and “quite frankly save some money because you’re bundling the purchase of those things.” Still, once launched, growth was modest at first. “Just like I would not open my mind to it when I was a trucking company owner, it was really hard to tell the story and explain what a PEO really is and that was the hill we had to climb,” he said. Presidents drive its growth Its expanding PEO space suggests Total Solutions is succeeding. “It took the right people,” Mr. Tennant said, pointing to Ms. Berry, who he said “has done a fantastic job of explaining, telling the story, getting in front of the right people so that they understand it, and using those people that trust us as good references to go forward.” Ms. Berry joined Total Solutions in September of 2021 to replace Melissa Pepper, the agency’s first president who left to take a leadership role with the Davenport construction/development firm Russell. Mr. Tennant, who at that time was board president of the Quad Cities Chamber of Commerce had been trying to lure Ms. Berry, the chamber’s chief strategy officer, to Total Solutions. When Ms. Pepper joined Total Solutions in 2018, the percentage of Total Solutions internal – or Tennant-owned companies – vs. external clients was 80-20. Mr. Tennant said he wanted to see that reversed, Ms. Pepper told the QCBJ. Three years later, she accomplished that goal even with the COVID-19 pandemic. “We had an awesome team and they still do have an awesome team,” she added.  “I think where Kristin really shines is to not only continue to grow but to match it probably with a little more discipline around the process” thus ensuring that the current clients’ needs continue to be met, Ms. Pepper said. “That’s so admirable because it’s hard to grow and keep discipline at the same time to serve your own clients.” Mr. Tennant sang the praises of both leaders who helmed and grew his company. “We wouldn't be where we are today without them,” he admitted. “When I really needed to step away and go spend some time with another business I brought Melissa (Pepper) in for primarily a sales marketing role, identified her skill set and all the sudden she’s the president of the company and really taking it to the next level.” Then, he said, “As luck would have it, it came together with Kristin (Berry) and she has been taking it beyond what Melissa did.”  That has allowed Mr. Tennant to concentrate on growing his towing business and other business interests including The Bend XPO Center, the Rust Belt, the Combine, The Palace Tavern and the My Place Hotel going up in The Bend – all in East Moline. Regarding the PEO’s current upward trajectory, he said, “Kristin has done a fantastic job of explaining, telling the story, getting in front of the right people so that they understand and using those people that trust us as good references to go forward.” In fact, Total Solutions’ growth has come from its website and by word-of-mouth recommendations from satisfied customers. Now however, the effort to grow the PEO is kicking into higher gear. In addition to hiring accountants and an HR person, Total Solutions also lured away the Quad Cities Chamber’s Manager of Business Growth Deb Mueller, who has come on board to sell and grow the PEO. Ms. Berry credited the company’s rapid rise and ambitious expansion plans to her staff as well as to the Entrepreneurial Operating System that Total Solutions has adopted. EOS is popular in metro areas such as Des Moines. It’s still relatively new to the Quad Cities. But a growing number of organizations and companies, including the Quad Cities Chamber, Bush Construction and Russell, are in various stages of use and implementation. “I think it is a gamechanger,” Ms. Berry said. “It has really helped us look forward in a strategic way and helped us stay laser-focused. It’s allowed us to leverage our people and focus our business strategy.”  She also stressed that the company’s overall business strategy continues to include the Total Solutions' traditional popular outsourced service lines: accounting, marketing (including social media, blogs and websites), human resources and payroll as well its ever-growing PEO. This team makes house calls Another thing that makes Total Solutions unique, is that its employees can frequently be found out in the field working directly with clients. That includes Sarah Kramer, its director of human services, who spoke to the QCBJ while driving to a regular weekly visit to a client in Milan.  Ms. Berry said, “All of our team operates as an extension of our client’s team so it’s not uncommon for us to get holiday cards in the mail from clients that include our Total Solutions employee because they’re like a team member.” Through those employees, Total Solutions builds relationships with clients and their teams. “The difference is you’re not calling an 800 number, you’re calling Sarah,” Ms. Berry said. Ms. Kramer is one of the company's longest-serving staffers. She started there in June 2015, as Ms. Kramer put it, just as Total Solutions was “beginning to transition to the concept of shared services, starting to get new clients and doing these types of things for small businesses outside of Aaron’s ownership.” Throughout her time there, she said, she’s been lucky to have leaders “who have allowed us to take off with ideas and implement things.”  That includes the PEO expansion which, in her HR role, Ms. Kramer now is helping lead. She said she’s excited by the possibilities  “We’re looking for some extreme growth, I would say. The year of the PEO is what we’ve kind of been calling it,” she told the QCBJ. “I feel like we learn something every day and every week about the PEO industry events and practices so I think we’re really gearing up for that,” she added. As for the ambitious goal: “It’s definitely manageable, it’s doable and it's something I certainly know we can do.”