Did you know that there are approximately 510 professional employer organizations (PEOs) and 5,700 administrative service organizations (ASOs) and payroll service providers (PSPs) in the U.S.?
It’s a competitive market. With so many providers to choose from, employers are in a position where they can shop around. And they are…
According to our third annual HR Leaders Report (based on a survey of 500+ HR decision makers), 59 percent of organizations who work with a PEO anticipate switching providers and 42 percent who work an ASO or PSP are considering a move.
To understand the market and where opportunities may exist for these service bureaus, we conducted a survey of PEO, ASO and PSP business leaders. The findings in our Industry Benchmarks for Informed Business Decisions report can provide guidance on what your organization should focus on to get a competitive advantage.
Areas of Interest within Human Capital Management
To meet their clients’ evolving needs, your peers offer a diverse suite of solutions that address just about every aspect of managing a workforce. Aside from payroll, the top solution in their product suite is employee self-service with 94 percent offering it. Time and labor management (93 percent), onboarding (92 percent) and benefits administration (80 percent) round out the top solutions offered.
What’s notable are the least offered solutions: AI-assisted tools (10 percent), benchmark insights (14 percent), compensation management (22 percent) and predictive analytics (24 percent). Our research shows these solutions are in high demand. According to our HR Leaders Report, 40 percent of organizations plan to invest in HR analytics this year. How do they feel they can best benefit from this technology? Forty-five percent say to accurately determine hiring costs, 38 percent say to forecast turnover, while 36 percent say to have a single source for workforce data.
If you are looking to elevate your competitive game, you should consider adding these solutions to your product suite. If you already offer them, capitalize on the advantage you have and promote them --but act fast! Forty-five percent of PEO, ASO and PSP business leaders plan to add predictive analytics, 38 percent plan to add compensation management, and another 38 percent plan to add benchmark insights to their offerings in the next few years.
Another area of opportunity is benefits enrollment. According to the PEO, ASO and PSP business leaders we surveyed, one of the technologies their clients have been requesting most is benefits enrollment. This aligns with what was revealed in our HR Leaders Report: benefits enrollment was in the top three technologies they plan to invest in this year.
Outside of Human Capital Management
Many of your competitors provide solutions beyond human capital management. The top services offered include employee handbooks (72 percent), followed closely by HR consulting and 401(k) (tied at 70 percent). Offering services that alleviate your clients’ HR workload is a wise investment. According to our HR Leaders report, HR decision-makers are open to augmenting some of their HR responsibilities. Sixty-four percent say they could benefit from outsourcing HR tasks, and 55 percent say they plan to outsource HR management tasks this year.
While HR services dominated the solutions offered by PEOs, ASOs, and PSPs, insurance and retirement services also ranked high. Seventy percent offer their clients 401(k), 69 percent offer workers compensation and 54 percent offer COBRA. From the diversity of solutions offered, it is evident that your peers are invested in providing clients with a well-rounded suite of products and services.
The competition for PEOs, ASOs and PSPs might be great, but the opportunities that exist are greater. One of the best ways to set your service bureau up for success is to partner with a company that is committed to investing in the solutions, people and programs to help companies like yours Win More and Grow Faster – isolved and the isolved Network.