The situation surrounding Bench’s acquisition by Employer.com is complex and involves multiple layers of uncertainty. Here’s a breakdown of the key points:
1. Layoffs and Layoff Process
- Immediate Layoffs: On December 27, all Benchmark staff were laid off without prior notice or severance pay. The company instructed clients to file for extensions on their IRS tax forms to continue using their current bookkeeper.
- Tax Extensions: Clients are encouraged to request six-month extensions from the IRS to ensure continuity of service.
2. Employer.com’s Acquisition Process
- Quick Acquisition: Employer.com acquired Bench in a seemingly last-minute deal, with no prior experience in accounting or finance. The acquisition was completed on January 4.
- Immediate Hiring Practices: To fill the roles left vacant by the layoffs, Employer.com is offering some positions for 30-day contracts to new hires.
3. Concerns About Future Sustainability
- Short-Term Contracts: While many staff were hired back, at least some are being offered only 30-day contracts, which raises concerns about job security and customer experience.
- Lack of Experience: Employer.com has no prior background in accounting or finance, relying instead on Bench’s reputation for people, experience, and customer base. However, this could be a significant risk if the new owners lack the expertise to maintain the company’s core services effectively.
4. Risks to Bench’s Sustainability
- Accounting Expertise: Accounting is the heart of Fintech, and Bench’s reliance on Employer.com for these roles may introduce critical knowledge gaps.
- Customer Experience: The sudden departure of all staff could disrupt customer service quality, especially if new hires are uncertain about their roles or processes.
5. Success Metrics
- Temporary Contracts: Some employees will be hired for only 30 days to ensure continuity while long-term infrastructure is being set up in Canada.
- Commitment from Bench’s Leadership: Jennifer Bouyoukos, Bench’s chief people officer, emphasized that the short-term contracts are a "temporary measure" aimed at ensuring customer continuity.
6. Potential Implications
- Job Market Impact: While this acquisition may save jobs for some employees in the short term, it could also result in further layoffs if Bench fails to adapt or maintain its services effectively.
- Customer Retention: The uncertainty created by sudden changes could lead to churn among existing clients who are already facing challenges adapting to a new provider.
7. Risks for Employer.com
- Relying on Bench’s Reputation: While Bench has a strong customer base, its acquisition by Employer.com raises questions about whether the company can maintain its operations in a new, unfamiliar industry.
- Short-Term Fixes: The 30-day contracts may be seen as quick fixes that do not address the root issues of Bench’s lack of expertise in Fintech.
Conclusion
Bench’s acquisition by Employer.com is an exit strategy that could save jobs but also introduces significant risks. The success of this deal hinges on Employer.com’s ability to quickly adapt, maintain service quality, and ensure long-term sustainability. While there may be short-term relief for employees and customers, the future of Bench remains uncertain until it can address these challenges effectively.
Potential customers should be cautious about this acquisition and carefully evaluate their options moving forward, considering alternative solutions that provide more stability and expertise in Fintech.
