In our current society, we all have cultivated a taste for nice things. With things being “nice” it is also usually associated with being “expensive”. This correlation comes from the old business saying that you get what you pay for, and sometimes this statement is extremely relevant while other times it is not the case of all.
It all starts with quality of service or product. For instance, if you are buying a wallet; you are going to have hundreds of options. The first filter is what type of material you want; you will see the plastic (not as well made) ones, up to the fake leather ones, to leather wallets. They all rise in price as you go up from plastic. You decide on leather because you want something that is good quality but, why do you still have so many options that are ranging in price for the same exact thing? This is where we get into trouble. Businesses and brands take advantage of the fact that they know consumers want the best product and will pay the high price tag for the peace of mind that they have something that will last. They then over charge them to a ridiculous extent because they can while the regular consumer doesn’t really understand the difference other than they have the mentality that the most expensive is the best. One of the best examples is how these brand name companies have outlet stores which heavily discount their products that aren’t sold in department stores. How are they able to sell these products at such a low price and still make a profit? It is probably because they were extremely overpriced in the first place. So in this case, are you really getting what you pay for or are you paying too much for what you are getting?
This same mentality translates into the employee leasing and payroll sphere. When it started up, these companies had the advantage of the consumers not understanding how much work they were doing and what an appropriate price would be to pay them. So now most of the brand name payroll companies use a percentage of payroll because they would be able to maximize their profits that way and over charge their clients without them having anything else to compare it too. It sounds good when it is 3%-5% of the payroll they charge for administration, because that number sounds so low. On the contrary though, they get paid more if you hire clients, give them a raise, or just are being more successful as a company, which isn’t fair.
Here at AYS, we do low flat fee pricing because we don’t believe in over charging our clients for our services. With this, we end up being one of the least expensive options when you want to outsource your payroll. This isn’t because we offer a less effective service than the brand name companies; it is because we know what a reasonable price is for our services and aren’t interested in charging the people that work in our community with us more.