EXECUTIVE鈥橲 DESK
Harstrick: New Mexico鈥檚 employees need to be in New Mexico鈥檚 hands
New Mexico鈥檚 greatest asset is its people, but our laws prevent us from taking proper care of them. For reasons no one has been able to articulate, the state created enough uncertainty about how PEO-sponsored plans are classified that many professional employer organizations, or PEOs, hold back from operating in New Mexico. We still have PEOs in the state; they鈥檙e just not from here. And so 鈥� as is the case with too many things 鈥� our welfare is left in the hands of organizations that do not fully understand the ethos of what New Mexico needs.
PEOs give small businesses the leverage to provide the same high-end benefits as big businesses. Insurance, payroll, compliance 鈥� like in all things in business, the more people you have, the better the rates and benefits an organization can command. What makes New Mexico great is its grit and spirit, embodied by the entrepreneurship so prolific across the state. Nearly all 鈥� 99% 鈥� of businesses domiciled in New Mexico are small businesses, one of the highest percentages in America. That鈥檚 about 157,000 businesses in total that do everything from making the clothes we wear to the food we eat. But we handicap our entrepreneurial spirit when these businesses have to fend for themselves in negotiating all of the auxiliary aspects of their operations.
New Mexico knows work is only partially about salary. This is the state that brought universal childcare and free college to its citizens. It鈥檚 New Mexico鈥檚 passion and advocacy for the future that made these things 鈥� and so many more 鈥� possible.
But New Mexico still has work to do, and that will require two things to change.
First of all, we need to clarify NMSA 1978, 搂 59A-23-20, and make it clear that a PEO鈥檚 fully insured plan is a single-employer plan, so New Mexico law accurately reflects how these plans work. That sounds nuanced, but it鈥檚 important and it鈥檚 a big enough deal that that sentence has stopped people from moving here.
The second step is to bring a best-in-class PEO here, led by New Mexicans, based in New Mexico and designed with New Mexicans in mind. That鈥檚 why we built Arkenstone and why, as its first investor and first board member, I am promising to do all I can to achieve the above for New Mexico.
While this state is growing into the industries of the future, having a world-class PEO here must be part of that growth. PEO-enabled businesses grow two times faster than others, fail 50% less and produce a 27% return on investment from cost savings alone. With the burgeoning revitalization of new businesses in the state, ensuring they have the back office they need without needing to build it themselves should bring the employee benefits we expect for all working New Mexicans.
New Mexico鈥檚 greatest asset is its people. Its people deserve the best in employee support, and I feel strongly that in short order, one of New Mexico鈥檚 best and most valuable companies, Arkenstone, will do exactly that.
Alexander Harstrick is the co-founder and managing partner of J2 Ventures. Executive鈥檚 Desk is a guest column providing advice, commentary or information about resources available to the business community in New Mexico. To submit a column for consideration, email mnarvaiz@abqjournal.com.
