MIND THE GAP: WHAT YOU’RE NOT OFFERING CAN HURT YOU

In the world of HR, benefits and payroll, partners matter. In fact, finding a trusted partner is why the PEO industry is readying itself for rapid change. When isolved surveyed HR leaders working with PEOs, for example, over a third of them indicated they plan on switching their PEO provider this year. The top reason? They need a broader HR technology platform.

There’s a gap that exists between what HR decision-makers expect today from the technology they have and what PEOs are currently offering. As such, clients are exploring their partner options to fulfill their top business needs, requiring PEOs to address critical gaps in their offerings. This is particularly true in the areas of strategic HR analytics, scalable platforms and secure human capital management (HCM) software.

HR ANALYTICS: THE NEED FOR ACTIONABLE DATA

HR clients increasingly rely on robust analytics to make informed decisions. Many PEOs, however, need to provide comprehensive analytics solutions. In isolved’s recent survey of ASO, PEO and PSPs, less than 25% of these service bureaus indicated they offer essential solutions like benchmark insights, predictive analytics or artificial intelligence (AI) assisted tools. The lack of these solutions can leave clients feeling underserved. In fact, according to the survey above of HR decision-makers, HR analytics is their number-one investment area. And, when we asked those same leaders about the positive impact that AI can make on HR, 64% said AI could make HR more strategic. Long seen as a tactical cost center, HR clients could use a helping hand – and they clearly see AI and analytics as that support channel.

To bridge this gap, PEOs can offer integrated and intelligently connected analytic and AI insights, ensuring clients can access and leverage critical data to drive their business forward by making strategic decisions and enhancing overall HR effectiveness. Ultimately, a single source of truth will enable HR clients to:

• Learn what matters to employees
• Predict the outcomes of changes in the employee experience
• Gain deeper insights, improve productivity and automate processes
• Demonstrate the real-world impact of HR strategies
• Translate the value of a positive employee experience into tangible business benefits

This comprehensive approach is crucial for PEOs to support their clients and drive business success effectively.

SCALABLE PLATFORMS: GROWING WITH CLIENTS

Another significant gap is the scalability of platforms offered by PEOs. As even the smallest of clients grow, they require platforms that can seamlessly scale alongside them. In fact, what is most prevalent in HR decision-makers’ minds today is how they’ll grow tomorrow. Growth is a common theme when it comes to HR leaders’ expectations for the HCM technology and provider they’re investing in. In fact, the number-one expectation for an HCM platform from HR leaders is support for organizational growth, followed by prioritizing continued innovation (according to the same HR decision-makers research study).

Many existing solutions lack the flexibility and integration capabilities to support this growth, leading to frustration and potential attrition. PEOs must prioritize investing in modular, intelligently connected platforms that can adapt to clients’ evolving needs as they need them. This approach not only enhances client satisfaction but also fosters long-term partnerships. We see the most successful PEOs:

• Seeking platforms adaptable to various business sizes
• Prioritizing seamless integration of HR functions
• Choosing solutions offering plug-in-play modules
• Ensuring clients can adjust modules as their needs change
• Looking for platforms that integrate with existing systems
• Opting for solutions offering AI-based personalization
• Partnering with providers offering comprehensive support including peer and self-service learning

By investing in platforms that can scale alongside the business, small companies can avoid disruptions, maintain efficiency and focus on expanding their operations without worrying about outgrowing their HR infrastructure.

SECURE HCM PARTNERSHIPS: ENSURING DATA PROTECTION

Ensuring robust data security measures is critical for PEOs as they navigate the complexities of offering HCM solutions to their clients. By partnering with HCM providers that prioritize security and regularly update their protocols and processes, PEOs can safeguard sensitive client information and mitigate the risks of breaches and compliance issues. This proactive approach not only offers clients peace of mind but also demonstrates the PEO’s commitment to protecting their data. Additionally, educating clients on security risks and encouraging the implementation of best practices further strengthens the PEO-client relationship and enhances trust.

Balancing cost savings with security considerations further demonstrates the importance of prioritizing data protection in today’s landscape of increasing cyberthreats. By establishing administrative and physical safeguards, PEOs can empower their clients to navigate the evolving cybersecurity landscape with confidence, ensuring the safety and integrity of their employee and employer data while also addressing the concerns highlighted by HR leaders. And, it is a worry. According to the previously cited survey, 41% of HR leaders are concerned about being a victim of a data breach – this year.

Ensuring that technology partners prioritize security, conduct background checks and regular training for employees, and adhere to standards such as the National Institute of Standards Technology (NIST) cybersecurity framework are crucial steps in mitigating security risks and enhancing data protection.

The consequences of a security breach can be devastating, leading to financial losses, damage to reputation and even legal liabilities. By partnering with PEOs that prioritize data security and adhere to industry standards, small businesses can mitigate these risks and protect their sensitive information. This not only safeguards the company’s assets but also builds trust with customers, employees and stakeholders.

CLOSE THE GAP FOR COMPETITIVE ADVANTAGE

To remain competitive and keep clients, PEOs must address these critical gaps in HR analytics, platform scalability and data security. By enhancing their service offerings in these areas, PEOs will better meet the evolving needs of their HR clients, ensuring sustained strategy, scale, security and satisfaction.