How to Reduce Audit Adjustments in Your Staffing Firm
Few things create more frustration for staffing firm owners than receiving an unexpected audit adjustment at the end of the policy year. These surprises can eat into margins and create tension with insurers.
Why Audit Adjustments Happen
Audit adjustments occur when the actual payroll and class code distribution differs from what was estimated at policy inception. In the staffing industry, this is especially common because:
- Temporary workers move between assignments with different class codes
- Payroll fluctuates with client demand
- Documentation of hours by class code is often incomplete
The Pay-As-You-Go Advantage
One of the most effective ways to eliminate audit surprises is to move to a pay-as-you-go (PAYGo) workers' comp model. Here's how it works:
Instead of paying an estimated premium upfront and reconciling at year-end, PAYGo integrates premium payments directly into your payroll cycle. Each time you run payroll, the system calculates the exact premium based on actual hours worked and class codes.
This means:
- Premiums are always based on actual payroll, not estimates
- No large year-end adjustments
- Better cash flow management
What 1.71% Looks Like
At Nixer Comp, our average audit adjustment is just 1.71% — a fraction of the industry standard. We achieve this through:
- Real-time class code tracking — Every assignment is coded correctly from day one
- Integrated payroll systems — Seamless data flow between your payroll and our platform
- Proactive account management — We review your portfolio regularly to catch issues before they become problems
Take Control
Don't let surprise audits derail your financial planning. The right workers' comp program can give you predictability and peace of mind. Talk to us about transitioning to a pay-as-you-go model designed specifically for staffing firms.