Episode Overview:

This episode features host Bob Pettke and guest Emily Osborne of Arvo Tech discussing the Work Opportunity Tax Credit (WOTC), a federal tax incentive designed to encourage businesses to hire individuals who face barriers to employment. Emily explains that many staffing companies miss out on this revenue source, which can average around $2,000 per eligible employee. The conversation focuses on how modern, integrated software solutions—like the one between ABD’s Ultra-Staff EDGE and Arvo—eliminate the historical difficulty of running a WOTC program, making it a simple “set it and forget it” source of income.

Emily highlights that Arvo’s key value is maximizing the credit for clients by proactively managing the entire certification process and maintaining high screening and certification rates. She encourages listeners who aren’t utilizing WOTC, or who suspect their current vendor isn’t getting them the maximum credit, to explore the integrated solution to effortlessly add significant money to their bottom line while placing deserving individuals in jobs.

Listen to the Episode:

Episode Transcript:

Bob Pettke: [00:00:00] Coming to you from the Ultra-Staff Studios in Chicago. Welcome to the Staffing Buzz Network with your host, Bob Pettke.

Hello, staffing friends, and welcome to another edition of the Staffing Buzz Network. My name is Bob Pettke. I am the host I’m also the Chief Sales Officer here at Automated Business Designs. We are a full service front office, back office, ATS CRM solution. And after many years being in the staffing side about a year ago I made a change and came over here to work for Automated Business Designs after being a user of Ultra-Staff EDGE.

And in doing so, we’re sitting on a whole lot of information, a lot of connections, and a lot of knowledge when it came to staffing. We are doing the Staffing Buzz Network yet again. And we are just bringing in different folks and vendors, and partners in the industry to share some insight and some helpful [00:01:00] information.

Really excited about today’s call because it’s gonna give some folks in the staffing world, a little bit of insight when it comes to maybe earning some money for the organization and taking advantage of some things, or actually looking to make sure that you’ve got the best partners when it comes to certain types of opportunities to make money just based on doing what you do best by putting people to work.

What I’ll do is I’ll get started here and just talk a little about the person that we’re gonna have on here today, we try to have people that are partners with us that we work hand in tandem with. And so today I’ve got Emily Osborne on, she is from Arvo, so she’s gonna be on with us today.

So, just some quick information about Emily and about Arvo, so we’ve got a relationship with Arvo. We have an integrated system with them where we’re able to handle. WOTC, and we will talk about WOTC. There’s probably about 70 or 80% of you who know what Waze is.

Some of you may not know or have not even taken advantage of an opportunity to get what are called WOTC [00:02:00] credits, which we’ll talk about. And so Arvo themselves have been around since 2014, and their sole purpose is bringing WOTC E to the staffing community. With that said, so Emily, hi.

How are you today?

Emily Osborne: I am good. I’m happy to be here

Bob Pettke: Emily. We are glad that you are here. So before I get started with you, I’m gonna give a little bit more backstory on who you are. A day in the life of Emily Osborne. Let’s talk about who you are. So you are a director of sales in marketing. At Arvo Tech, and you’ve been there for four years, your responsibility is working with staffing companies, large and small, maybe even mid-sized, for that matter, to provide tax credit services.

You’re working with clients to establish a vision and a goal that ultimately leads to a WOTC program optimization, and your goal is to bring transparency into the WOTC program by offering the best practices and resources to help companies [00:03:00] financially thrive in new and exciting ways.

Am I doing okay so far?

Emily Osborne: You’re doing fantastic. It’s the best intro I’ve had in a while.

Bob Pettke: Perfect. I’m glad to hear that. Emily, we’ve got a lot of folks in staffing that know what WOTC is. Is it W-O-T-S-E-E? Is it an acronym for something? What is WOTC?

Emily Osborne: Yes. So WOTC? The acronym is W-O-T-C.

Okay. It stands for the Work Opportunity Tax Credit. Not to be confused. Now, if you do a quick Google search, just Google WOTC.

Bob Pettke: You can Google WOTC, right? When it comes to WOTC, it’s, and you mentioned tax credit, so talk a little bit about what that looks like. What does that mean? ‘Cause credit sounds good.

Emily Osborne: Yes. So it’s an employment-based tax credit. It was created in 1996. And the purpose of [00:04:00] WOTC is to incentivize businesses to hire individuals who have historically had a hard time finding work.

Bob Pettke: Okay.

Emily Osborne: What that means to a business owner, specifically a staffing agency, is you can get a tax credit for simply hiring an individual that falls into nine target groups that the US government has identified as a group that’s had a hard time finding employment in the past.

Bob Pettke: Okay, got it. And so we talk about WOTC, we hear the term credits, we talk about getting, in essence, money back for putting these folks to work, which is a great thing. Talk to us a little bit about like a WOTC process. How does that all happen?

Emily Osborne: Yeah, so I touched on the nine target groups.

So those groups range from someone who may be on temporary assistance, they may be [00:05:00] on food stamps, unemployed veterans, ex-felons, there’s a group called Empowerment Zones for a little detail on that. Basically, the government looked at a map of the US and identified specific areas where there may be low-income spots or they’re rural, and they circled them, mark them empowerment zones.

So if you hire an employee that lives in an empowerment zone, you’ll get credit for WOTC. So there’s nine of those groups. I won’t go into all of them, but the first process of WOTC is to screen your applicants or your new employees that are coming on board to see if they fall in those nine groups.

Once they’re screened, what our job is, our most job is to take that information and send it to one of the 50 WOTC state workforce agencies. Okay, so one thing that’s important to mention [00:06:00] is WOTC is a federal tax credit, which is great. The money’s guaranteed by the federal government, but it is run by the states. So, each state has their own dedicated WOTC department, a state workforce agency. So you screen your applicants or employees, we send them off to, for example, we’re out of Ohio, so the Ohio State Workforce Agency, Ohio stamps it and says, yes, this is an ex-felon. Yes, this is an unemployed veteran. Yes, they are in an empowerment zone. That means that they are now certified . The next level. So there’s chunk one. Now, what we need to do is, yes, your employee is certified.

Now we take payroll data to help determine how much tax credit your organization will earn while this employee is working for you.

Bob Pettke: Okay, perfect. And, being in the industry and, so I’ve been doing this for a year and there are times [00:07:00] when we’re talking, on the software side of things, when we’re talking to people that are out there and they’re looking at us as an A-T-S-C-R-M solution and, it’s not everybody, but we do come across people who don’t know wa what WOTC is. They might be on another ATS system that doesn’t have an integration. And we’ll talk a little bit about integrations here in a minute. But for somebody that’s not taking advantage of WOTC what are, what’s the typical impact that somebody can expect?

You may, if you even can, to their bottom line.

Emily Osborne: Yeah, so we get this question a lot. Some people will say, yeah, I just don’t hire enough people to make WOTC make sense. Just to do some quick math. And I’m not the best at math, so I’ll keep the numbers very easy.

Bob Pettke: Round numbers are good.

Emily Osborne: Yeah. Say you’re hiring a hundred people a year, 20% of them will be eligible for WOTC. And your [00:08:00] average tax credit is around $2,000 per employee for the year. So quickly that adds up. You can make $40,000 off of WOTC in one year if you’re hiring a hundred people annually now, if you’re hiring 10 people. And 20% on average is eligible. That’s two people. That’s 4,000 annually.

Bob Pettke: Okay?

Emily Osborne: But the way to look at it and what we tell, even if you’re hiring 10 people, you’re hiring five people, one person’s eligible, two people are eligible, 20 people. This is money that you didn’t previously have access to, and you can then use it at your discretion.

Increase the bottom line, use it to hire additional employees, get additional office chairs, whatever you need. It’s just another source of revenue for the organization, no matter how big or small.

Bob Pettke: Like I mentioned, I do come across people. They don’t run it. They don’t use it.

[00:09:00] There’s maybe a handful of folks that don’t even know that it exists. Why are people skipping out on WOTC altogether? What’s that about?

Emily Osborne: Yeah, so those two parts I mentioned earlier with WOTC, and I’m happy these questions are flowing this way, because if you had asked this first, it’d be a little hard to explain it.

But the two parts are the survey and payroll. Okay. And the reason someone might not run a WOTC program is because, in the past, organizations were forced to try and run it on their own. Screen on their own, get the payroll calculations correct and send it all to the state. Wait for the states to come back to them.

Now, in the space that we’re in, where everyone is integrated and there’s ATSs, like ABD out there that are integrated WOTC solutions, it takes little to no lift for the employer themselves to set up a WOTC program and run it. What we run into the most is, oh, it’s too much. It’s too hard. It’s taxing on our [00:10:00] branch managers, or it’s taxing on our tax manager.

What our job is through integrations with ATSs and payroll companies, we’re able to embed the survey and onboarding and then pool the payroll data we need so that you as the employer doesn’t have to do any of that work with the states or with the survey or with the payroll data, that is what your vendor is in charge of doing for you.

So that’s a lot of people are like, no, I’m too small, and it’s too hard to do with an integration. You can do it even if you hire one person a year, and you don’t have to lift the finger to get it done.

Bob Pettke: So I was gonna, you know, my, you answered some of the next questions. Is it difficult to run? The answer is no.

How much time does it take? It doesn’t sound like a whole lot on the side of the people in the staffing office. Talked about how, my question is, and you’ve alluded to it, when it comes to falling for credit, so you talked about needing the two things.

One was the payroll and the survey, so they have the payroll, they have the [00:11:00] survey, and they likely have an integration with us, and maybe you talked about this already and if you have, just tell me and it might be even ask you to repeat it, but how does somebody file for these credits specifically when they’ve got all these ducks lined up in their own?

Maybe they’re doing it for the first time.

Emily Osborne: Right? Yeah, that’s a great question. So they’re doing it for the first time you set up WOTC, our surveys embedded in ABDs’ onboarding, the payroll is being pulled. What you should see out of a WOTC vendor, whether it’s us or another vendor, is you should see reporting on how much credit you’re earning; that’s the most important KPI to track. Your WOTC vendor should be just sharing with you how much credit you’re earning. There’s a lot of other KPIs to track as well on the health of a program. But the way WOTC works is you can file it annually. So you file it when you file your annual taxes, whether you’re on a fiscal year or annual calendar year.

And you can actually choose to file the WOTC credit you’ve accumulated over a year [00:12:00] in the year you accumulated it or roll it over for 20 plus years. So we have some customers where they will make five grand every year. They’ll wait until year five. So then they have 50 grand in their WOTC bank account that they’re able to file at the end of the year.

Bob Pettke: And then they have a big pizza party.

Emily Osborne: Exactly. Yes.

Bob Pettke: Okay, so I get that part, and I think you know this, as people are listening, it’s all starting to make some sense here. Not difficult to run doesn’t seem like it takes a whole lot of time. We understand how you file for the credits. So, Arvo, you’re not the only ones in the country in the world doing this as a partner for staffing people, are ya?

Emily Osborne: We are not.

Bob Pettke: So there is competition, which we will not name by name, by any means. This is your time, your call, your podcast here on the Staffing Buzz Network. Let me ask you this question. How can I, as a staffing company who’s maybe going through the WOTC process, and I’m working on these [00:13:00] tax credits, and they’re embedded with WOTC.

How could they ensure that their partner, your competitor, how can they make sure that they’re getting the best credits available? In other words, how can they tell they’re getting the most bang for their buck when it comes to WOTC?

Emily Osborne: Yeah, so there are, and I alluded a little bit earlier to the importance of reporting from a WOTC vendor.

So if you are a lot in the staffing agent or staffing world have their own WOTC vendors. Now, if you’re looking at your WOTC vendor, the things that you wanna check for the health of your program is first, do I have access to my WOTC reporting? Is there a dashboard that exists that I can go look at and see if they’re tracking anything when it comes to KPIs or when it comes to credit, even?

Where can I access my reporting data? So that’s first, is there an [00:14:00] area to find the reporting? Now, once you’re in there and there isn’t an area, hopefully, there’s some dashboards there. Some of the key KPIs to look for the health of your program is first screening compliance. Okay? So I touched on the survey with an embedded solution.

You want to make sure that your survey, at minimum, 95% of all of your employees are participating in that survey. The first step to the health of a WOTC program is that you’re screening. So if you’re able to look at your WOTC program, and if you can’t see it, maybe ask Hey, what is our screening percentage?

How many of our employees are being screened? That’s KPI one to check if it’s lower than 90. It would just be why. You know what, who’s missing? Is there a way that we can look into the reporting and figure out, like the people that are skipping the survey, is the integration set up correctly? Those types of questions.

The next would be certification rate. So [00:15:00] I mentioned earlier, you have the survey, it’s great. In an ideal world, a hundred percent of your employees take the survey. Your WOTC vendor is then sending those surveys to the state workforce agencies, confirming that someone’s certified. You wanna look for that certification rate.

So, of the eligible employees that you’re sending to the state or that your WOTC vendor is sending to the state, how many are coming back certified? What we see at Arvo is it should be an average of 50% of all the eligible employees that you send out should be coming back certified. If it’s lower than 50%, I would encourage you to ask your WOTC vendor why that is. There are certain states, like Texas, for example, where, and I could get into the weeds, I’ll try not to here. If there is a veteran, for example, you need a DD two 14 accompanied with their survey to get them certified. What Arvo makes sure to do [00:16:00] is, Hey, we have a veteran in Texas.

Make sure we get the DD two 14 for them. So Arvo actually goes and gets that document. We submit it to Texas, so Texas can go ahead and certify them. Okay. If your vendor isn’t doing that and they’re just sending the survey without additional documentation, that veteran will sit in pending, and it will say, needs documentation, before they’ll get certified, and that’s why you’ll see that certification rate drop to 10, 20, 30%.

So I could go on. There’s others, but those are the top two. The screening percentage and the certification rates. You wanna make sure screenings 95% or higher, and then certification rate is 50% or higher.

Bob Pettke: Got it. Okay. That’s making a lot of sense. And again, as an ATS, we do have the integration with WOTC.

We’re partnered with you. And again, we’re trying to get out ahead of those things to make sure that our clients are positioned when they’re folks enroll, that we’re getting that [00:17:00] information, right out of the gate. But from what you’re telling me, it is possible that there are providers out there that might not be following and doing all the steps necessary to make sure that you’re ensuring that you get the most bang for your bucket of credit.

Emily Osborne: Right? Yeah. Because if someone, say you had 10 veterans in a year in Texas and they never get that additional documentation, you’re never gonna get the credit for those 10 employees, and that can add up very quickly.

Even if your vendor’s only missing 10%, that adds up very quickly at the end of the year.

Bob Pettke: Got it. Question, it just came to mind. Obviously, to partner with you, you don’t have to get into the details of putting together a proposal to me, gimme a general idea as a partner, ’cause you know, partners get paid, how does that work?

How does the company end up having to pay you for that?

Emily Osborne: The great thing about WOTC is that it’s a hundred percent contingent on the staffing agency or the employer earning a credit. You’ll set up your survey. For [00:18:00] example, say you wanna move forward, your survey’s embedded, we’re pulling your payroll data.

There is no startup fee or monthly fee to screen your employees. Arvo only charges once you actually begin earning. So, for example, say you start in July. You hire 10 individuals in July. They don’t start working for you until August, and then it takes them a few weeks before they start hitting the markers that we track for them to earn you a credit.

You don’t earn a credit till September. Once you start earning a credit, say you would earn $10,000, We charge just a base fee based on the income you’re getting from the WOTC credit monthly.

Bob Pettke: It makes perfect sense. I can see where your organization and your team is doing a lot of the heavy lifting, and it comes at a cost to do some of these things. Like you said in the old days, trying to do this on their own, it was so cumbersome. People just have avoided it. Was the juice worth the squeeze? Was the effort to it? And again, for just a fraction of whatever it is that they [00:19:00] get back, a fraction I allocate it to you makes perfect sense.

So I could see why people would want to talk with you about that. Where else do I wanna go here? So once we’ve got this going and running. And you mentioned reports, and I know that, working with us, there’s reports and things like that are available, but we talked about this before, but let’s talk about it again.

Let’s talk to that audience that is just not taking advantage of this. This is an opportunity for you. To maybe talk to them and they’re leaving money on the table, right? There’s no such thing as free in life, but at the same time, there’s a reason that the government has set this up in such a way to incentivize these folks that need a second chance or are in a position where they need to work.

For one reason or another, they’re not gonna be the first on the list when people are calling on other folks to work. But talk to that 20 and tell them or encourage them if need be, why [00:20:00] they should do this, and more importantly, maybe even we will include your contact information in the comments below after this.

But why should people reach out to you? What is it about you and your organization that makes you different, where these 20% are gonna wanna work with you?

Emily Osborne: Yeah, just for context on the history of Arvo, I know you touched on it a bit in the beginning, but we were founded in 2014, and the reason that we were founded then is prior to 2014, the law stated that WOTC had to be run a hundred percent via paper.

Which, as you can imagine, if you’re gonna screen every employee. And then you gotta fax it or mail it to the state, and then wait for it and mail it back, that’s a lot of work. Yeah. So prior to around 2014, the only organizations taking advantage of WOTC were 250 million plus annual. And those organizations had their own WOTC departments, so an employee that did [00:21:00] their WOTC program.

Once the law changed, there was an obvious gap in the market for vendors to then service smaller businesses. Even smaller enterprise to medium to very small, and bring WOTC to them that they’ve simply never had a chance to take advantage of it prior to that point, because it was just too cumbersome of a program to run.

What Arvo has been doing since 2014 is perfecting that process to make sure that we can get you the most credit. And not just say, get you the most credit, I touched on it earlier, making sure that we have the integrations we need in the market so you’re, you don’t have to touch anything. We run the survey, and then we pull the payroll data, making sure that we have the highest certification rates possible and at each state, which means we get that additional documentation, not you. There are some vendors that put it on you and your team to go find that DD two 14 in Texas.

Bob Pettke: Okay.

Emily Osborne: We do all of that. And [00:22:00] the other side is since 2014, we’ve built up our state workforce agency group. It’s a dedicated team. All they do is have their finger on the pulse for each state interacting with them daily, as we’re doing our submissions of, Hey, what’s changing in your WOTC process?

Is there a new document that you need? So our whole goal is keeping that certification rate as high as possible in each state. And that really is the big difference between us and other vendors. We’ve also then taken all of that great process and put it into our WOTC platform or WOTC portal. I touched on the importance of reporting and those metrics to track in our portal.

Everything is real-time. So if you hire 20 people, in the last five minutes, all of their survey data will be in your portal. You can see if they’re eligible or not. And then you can see projected how much credit you’ll make, in the next month, in [00:23:00] the next quarter, in the next year, in the next five years.

What we’re then doing with that data is making it actionable and giving you, “Hey, Kelly in Ohio is only five hours away from making you an additional $2,000. Make sure she works those five hours.” We’re making actionable processes with our WOTC reporting that gives you a way to say, Hey, here’s my WOTC program.

How do I make more money? Oh, I can make sure that all these individuals hit their mile markers. Or, Hey, the screening rate in Cleveland is lower than Cincinnati. Our team will tell you, Hey, there’s a red flag. Let’s look, take a look at this. So it’s really about putting together a program that’s integrated that has good reporting, and then our team’s responsibility is to check those KPIs and make sure that they’re up to par with where the baseline is, to make sure you’re getting the most credit if all your KPIs are where they should be. So it comes down to data, but [00:24:00] it’s a long way of saying that.

Bob Pettke: No, it’s fine. As we start to wrap up here, we’ve got an integration. Any comments or anything to share with a group with, as far as our ABD integration through Ultra Staff EDGE?

Emily Osborne: Yeah. We have an API integration for the tech people. I don’t consider myself a tech person. I’m sales and marketing, but API is the best integration you could get. So we are fully embedded within ABD’s onboarding flow. So your employee comes in, maybe they complete the I-9, they hit next.

It’s the WOTC survey. It’s fully embedded to the employee. they’re not leaving a platform going somewhere else and coming back to complete the survey. It’s just within their onboarding flow and the survey takes about 30 seconds. Our average screening compliance with anyone at ABD is 99%.

Bob Pettke: Perfect.

Emily Osborne: And then the payroll is also connected, so when it comes to our embedded platform connected with ABD, you have everything you need to simply turn it on, and you could just let it flow if [00:25:00] you want it.

Bob Pettke: Almost, I use this term quite a bit, almost like a set it and forget it type thing for the most part.

Emily Osborne: You can, our team will let you know, “Hey, there’s some things you could do to increase your credit over here or over here,” but if you wanted to set it and forget it, it’s available that way.

Bob Pettke: Yeah. It sounds like you know your clients, the people in staffing, you’ve got their back.

This is, you’re gonna do what you can on your end to maximize this opportunity. That’s great, and, really excited to have you here. I think it’s very worthwhile for folks that maybe aren’t taking advantage of it or maybe they’re not getting the full benefits of it based on who they’re partnered with.

You’ve given them some really good insight on how to do that. And as far as our integration goes, we’re in a good space and place where we feel like, Hey, you’re a good partner. That’s why we’ve got you on here today. And before we go, what I’m gonna have you do, and again, we’ll include this somewhere in our comments, but, you know what’s a phone number, an email? What’s a way to get in touch with you?

Emily Osborne: Yes. So you can reach out to me directly via email. My [00:26:00] name’s eosborne@arvotech.com.

Bob Pettke: Got it. Perfect. Then, yeah, so stay tuned. Some folks will be hitting you up, and with that said, we’ll see you next time.

Emily Osborne: Yeah. Thank you so much, Bob. This was great.

Bob Pettke: Thanks, Emily. All right, so there you have Emily Osborne from Arvo Tech. And again, a really good partner and a really good opportunity for the staffing community to put some people to work that deserve a chance. And not only that, there’s financial benefits to you to do that as well.

So, a pretty good space and place to be when it comes to maximizing some additional earning potential. And if you’re looking at ATSs, CRMs, consider us. My information’s gonna be on the outro page, reach out to me because we have this integration and with our front office, back office solution, with some of the things that we’re doing from a technology standpoint, utilizing AI and always upgrading our system, we could very well be a good solution for [00:27:00] you. We’ve got a software solution that you will not outgrow that when you use it, we will help you grow your business and service your customers appropriately, and it’ll go ahead and free your time up.

There is a lot of set-and-forget-it technology in our own system where you can spend more time talking to your candidates, talking to your employees, talking to your customers and actually trying to go out and get new business. So with that all said, I’m just thankful that you guys are here again and again, make sure you put the word out and have people tune in either by subscribing through their favorite podcast platform or watching us on YouTube.

We’re just thankful for the opportunity to meet and contribute back to the staffing world. And, with that said, until next time, I’m Bob Pettke here at ABD. I’m also with the Staffing Buzz Network. Looking forward to seeing you on our next broadcast. Thanks [00:28:00], everybody.