Aloha from ProService Hawaii—

Happy Holidays! As we wrap up 2022, I'm very thankful for all this year has brought, and I would like to share some of our journey with you in the hope that you can learn from our experience and make your business better as a result.

Reflecting on 2022

2022 has been a year of strong growth for our clients and us! We're on track to process $2.5 billion in payroll this year, and we will pay over 44,000 Hawai’i employees in December. This compares to us top-ticking 40,000 employees in February of 2020, then plunging to 27,000 in May 2020 before beginning the slow climb back. Coming out of the pandemic, it’s been great to see clients hiring and dealing with the good challenges of strong demand, especially after reflecting on where we’ve been and what we’ve all gone through.

But coming into 2022, ProService faced big headwinds. While our team provided great advice and service through the pandemic, by late 2021, we were tired from the constant changes of the prior two years. On top of this, we were losing staff to out-of-state companies that were recruiting at higher (possibly tech-bubble-inflated) wage scales. Worse, as we “ran our systems” for recruiting, hiring, and training staff, we found that these systems—which had been so strong for us before—were degrading and becoming less effective. Our culture and service were not being reinforced, and we were learning the hard way that onboarding and training employees remotely was not as effective as training employees in-person! From my vantage point, the foundation that had once made us so successful—our people and culture—were at risk, and it was going to take all of us working together to refound our culture and strengthen our service foundation. Refounding our culture to rebuild Best Local Service became our rallying cry for 2022!

This year ProService has focused on these two interlinked goals. First, to refound our ownership culture; and second, to rebuild our systems and practices for delivering the best local service. Why were these goals so critical? For us, culture is foundational for taking ownership of client issues and working as a team to resolve them successfully.

Our Single Most Important KPI: Service Responsiveness

We’ve been working hard all year to help our people live our core values better, focusing in particular on Clients are Partners, and We Learn. We trained our people to be curious, ask probing questions, and ensure they understand the underlying issue clients need to be resolved. We formed cross-functional teams to innovate and scale the delivery of critical new services, specifically ones that help clients hire remote employees on the mainland or get more money back through the Employee Retention Tax Credit. We have also tapped into ProService’s competitive culture to gamify our key KPIs, making dashboards visible to everyone and having everyone in the company work together to drive a singular goal around client responsiveness. And foundationally, we read books together, including The Founder's Mentality, Turn the Ship Around, and Oz Principles, to strengthen our shared language and understanding of key principles.

What began slowly has gathered steam through the year, and we are ending 2022 with big improvements in our ownership culture and service delivery. What you should be feeling and experiencing from your ProService team is better answers and problem-solving, faster turn-around, and clear action items to resolve your issues. We track this daily at the company, team, and individual levels, and all the programs I mentioned are meant to improve our responsiveness and ownership of your issues. Our progress energizes me. We have come a long way but still have further to go. Progress is not easy or straightforward. But I hope that by doubling down to strengthen our culture with We Learn, you are experiencing better service and a deeper partnership that comes from Clients Are Partners.

Looking Ahead to 2023

As we enter 2023, we will continue our focus on culture and service and will accelerate the improvements in our offering. Our goal is to make it easy for you to be an employer in Hawaii—which is really tough to do! We will also continue to work to drive programs that lower costs and save you money. To do this, we focus on the cost drivers impacting local business, and inflation has taken center stage. We believe inflation will stay higher for longer, and we must prepare to live with it for the next few years. This means that anything possible to mitigate or offset costs is a big help. We do a lot here with our insurance programs, but today I’ll focus on two areas of near-term opportunity that directly impact your cash flow.

Rallying to reduce SUTA rates (again)

According to state law, SUTA rates must automatically increase a lot unless a bill is passed and signed by Governor Green to mitigate the increase. These rates are released in March and are retroactive to January. As we did two years ago, ProService will work to advocate for a change in the law to minimize the employer SUTA tax burden. More to come here, but please be on the lookout for our guidance. In the new year, we’ll share how businesses can become involved to help testify and make this law change possible. Particularly during these times of rising costs, it will be critical for us all to band together as we did two years ago to lobby for a better bill to pass.

The final deadline to apply for ERC is Friday, Dec 30, 2022

To date, ProService has filed approximately 600 client applications totaling $100 million in credits. If you haven’t already, this is our final appeal to please start the application process for your Employee Retention Credit (ERC) if you’d like to take advantage of this opportunity. Many local employers, including those who are essential businesses, qualify. Although the process with the IRS can be painfully long, the dollars are ultimately substantial and are in addition to your forgiven PPP loan.

But for ProService to process your application and amend your tax return, we need you to begin the process this week. Please start by completing the application for the ERC year you would like to apply for (ERC 2020 or ERC 2021) by Friday, December 30.

Closing Thoughts

We began 2022 with lots of work needed to rebuild post-pandemic. We found our footing and are on the right path, laser-focused on culture and service. I’m super optimistic about continued improvement in 2023. In addition, enhancements we had planned to roll out in 2020 are now back on our roadmap for 2023. Thank you for working with us and trusting us as your HR partner.

Mele Kalikimaka!

With Aloha,

Ben Godsey

President & CEO