Artificial Intelligence is a topic of widespread interest and is often touted as the solution to nearly every business challenge. While AI’s complete impact is yet to be seen, most would agree that it will influence nearly every industry, including PEOs.
If asked, an AI engine like Chat GPT might say “AI can transform PEOs from being viewed as administrative vendors to strategic business partners by offering predictive, proactive, and personalized services at scale.” A shift that changes how a marketplace perceives the industry could bring significant opportunities for PEOs.
Jarryd Bradley, Chief Technology Officer at Workforce Management Agency, anticipates AI-powered PEOs will play a big role in how employees get work-related information. “Interactive chatbots have become mainstream. Most people are familiar with talking to a chatbot like Siri or Alexa, and generative AI has shifted the search engine user experience.”
“However,” he continues, “Human connections are still essential. AI isn't a total replacement for business experts. It’s a tool that advances self-service to a place where issues and business processes can be handled much more quickly and efficiently.”
AREAS OF AI INFLUENCE IN THE PEO INDUSTRY
Task automation
Predictive analytics
Benefits enrollment and administration
HR decision-making
Employee recruitment and onboarding
Customer service
AI will affect the entire breadth of the industry, including PEOs, their HR business partners and other trusted advisors, PEO clients, and the employees who work for the clients. Some areas where AI is likely to play a part in the predicted industry transformation include data-driven matching, customer service, chatbots, and data acquisition.
PEOS
PEO platforms are ideal systems for AI deployment. They feature a wide range of functions, quickly analyzing and providing insight into large datasets as they grow. AI-influenced changes made by the PEO companies will influence entities and individuals throughout the PEO development, sales, and usage environment.
Benefit Enrollment
More than just streamlining benefit enrollment processes for PEOs, AI enables PEO companies to add personalization and intelligence to match companies with relevant benefit programs.
AI-driven systems can analyze a company’s HR, benefits, and compliance needs, then match those requirements against a broad array of PEO offerings. This data-based analysis ensures a precise fit between client and PEO. As they select the best PEO solutions for a company, AI algorithms may consider factors such as industry, company size, risk profile, and desired benefits as it makes its recommendations.
Customer Service
Manual methods dominate the actions PEOs take to maintain client relationships today. With AI on board, PEO companies can be more strategic about how they ensure their clients are happy, satisfied, and likely to renew their contracts.
AI could, for example, monitor each client’s use of various aspects of the PEO platform and issue quarterly personalized reports showing each client how much time and money they saved with the PEO services. Client communications generated by AI might also include informational content about underutilized PEO services, automating part of the process to connect businesses with important improvements to their operations.
A.I. FOR PEO ADVISORS AND HR BUSINESS PARTNERS
Bringing on a new client for HR and PEO service providers can occupy the time of many individuals working over a number of weeks. AI technology can automate many of the tasks an organization must complete, such as analyzing data or composing inquiries sent to the entities involved. The technology offers an opportunity to shorten the implementation process and use fewer people to do it. This allows these organizations to grow and prosper while reducing overhead.
Task Automation
Mundane tasks, such as managing appointments, client outreach, prioritizing, and scheduling, can be done more efficiently with AI assistance. The technology can help track implementation objectives, manage required documentation, and monitor compliance deadlines.
AI-powered virtual assistants can also provide answers to client questions, guiding them through claims or onboarding processes and keeping them up to date on progress.
Businesspeople have become comfortable with AI assistance very quickly. Every search engine has AI built in and the degree to which many people have experimented with prompting far surpasses most other recent technological innovations. The barrier to entry and acceptance level of using AI to support customers through a business process are quite low.
Data Collection
AI tools can automate data gathering activities and extract information from company applications, contracts, and other documents PEOs require for underwriting and onboarding. The act of requesting information and waiting for responses typically slows PEO onboarding efforts. AI-powered quality control features can catch data inconsistencies or highlight missing information, eliminating many of the delays caused by communication loops that occur between PEO underwriters, brokers, and clients. AI never sleeps, takes breaks or gets swamped by emails. This allows businesses to complete the data submission process much quicker; possibly in a single session.
AI FOR PEO CLIENT COMPANIES
Intelligent features built into PEO platforms can offer PEO clients enhanced performance in many areas of their businesses. The technology can often turn tasks traditionally handled with in-person, phone, or email communications into self-serve applications that deliver satisfactory results whenever they are needed.
Interactive HR Chatbots
Specialized AI chatbots supplied by the PEO and made available to the client’s employees can reduce the need for company HR professionals to answer common employee questions. AI can handle questions such as “Is my doctor in-network?”, “What is my co-pay for office calls?”, or “How do I start an FMLA request?”.
AI chatbots might also help clients with business questions about workers’ compensation claims, payroll and tax questions, employee compensation rates, etc.
This always-available resource could allow employees and their family members to deal with problems as they arise, allowing the issue to be dealt with instantly without drawing key resources like HR away from other critical tasks.
Will AI dispense medical advice? Probably not. Employees should not rely on AI for medical diagnosis or treatment plans. However, it could supply general guidance for things like remembering to make doctor appointments for follow-up visits or providing suggestions for physical therapy from highly rated providers covered by their health plan. AI might send wellness reminders for recommended tests or check-ups according to the employee’s age, health history, and physical condition.
Existing data from previous cases and similar conditions lets AI offer more clarity to the people that need it most, enabling them to ask the right questions of the professionals delivering the final course of action. After all, being as informed as possible about your condition and potential solutions are key to getting the best medical treatment.
Employee Recruitment and Management
AI can review resumes of job applicants to find candidates to fill a new vacancy. It can also speed up screening and ranking of new job candidates, identify employee retention risks, and highlight workforce trends.
AI-driven onboarding platforms can guide new hires through paperwork, training modules, and benefits selection, making the process faster, more intuitive, and less stressful. Chatbots can answer questions instantly, ensuring new hires feel supported from the beginning of their employment.
AI can analyze performance data and compare employees against industry standards, providing personalized feedback and identifying areas for growth. Employees benefit from clearer expectations and more constructive, actionable reviews based more on verifiable facts, and less on opinion. The AI can recommend training and career pathways that lead employees to their desired career goals.
THE PEO TRANSFORMATION
Companies involved in developing AI see a future where people develop high trust in AI and come to expect digital assistants to do things for them. With access to calendars, communications, individual history, personal and professional objectives, current events, and other information, these digital assistants can relieve humans from routine tasks that occupy our time and our mental bandwidth, freeing us to do more creative thinking and problem-solving. AI will definitely change the way PEO professionals and users work, and it might even change the way clients think about their PEO partners.
BY Mark Steiger
August 2025
