Tips for Service Bureaus: Approaching HCM as a Marathon—Not a Sprint

Wednesday June 9th, 2021

Whether you’re an administrative services organization (ASO) or a professional employer organization (PEO), you’re used to helping your customers adapt. You understand new regulations overnight. You respond to crises in real time. You learn new software and then immediately train others. You seek long-term solutions for short-term challenges. 

Many days, achieving top-notch customer service may seem like running a marathon. At the end of running 26.2 miles, marathoners realize that the real work was done during their time spent training. Race day seems simple compared to all the mental and physical preparation they did during the months before.

Think of your decision to invest in human capital management (HCM) technology as a marathon—not a sprint. If you take the time to complete competitive analysis, plan for future requirements and discover upcoming HCM technologies, your final decision point will be well-informed and straightforward – which can help you retain and attract new clients. 

Know your competition.

Just like runners do when training for an endurance race, ASOs and PEOs should look at how their competitors are leveraging technology to set benchmarks for their own HCM initiatives. You also need to pay close attention to what your clients and prospects expect and demand from HR software to ensure you are able to deliver. isolved recently completed a study of 500 HR managers, directors, vice presidents and chief human resources (HR)/people officers to help you better understand client and prospect HCM technology plans and needs.

Of the respondents surveyed in our study on Transforming Employee Experience, 53 percent said their HR budgets will increase in 2021. If budgets are increasing, 72 percent of respondents said the increases are going to technology. 

In the same study, 49 percent of HR leaders stated they work with a PEO and 70 percent said they work with an ASO. Although the majority are happy with the technology their service bureau is offering, half of those using a PEO and 41 percent of those using an ASO are considering switching to another partner within the year. The top reason why? The need for a broader technology platform

All of these data points highlight the investment that employers are willing to make for comprehensive HCM technology that is capable of managing the entire employee journey. It also shows that clients are willing to switch service bureaus if they feel like the technology being provided is insufficient. 

Don’t overlook potential hurdles.

HCM solutions are supposed to make the business of employing, empowering and enabling people easier and more efficient. However, as a PEO or ASO, you likely know the pains of different systems not “talking” to each other the way they should – and so do your clients.

In fact, isolved’s study found that a third of HR departments (29 percent) are using five to ten systems to manage the entire employee experience (e.g., onboarding, payroll, engagement, retention). Companies with five hundred employees or more are the most likely to be using over ten solutions to manage HR. But by partnering with your PEO or ASO, your clients are likely expecting a better solution for managing their workforce.

By offering an end-to-end experience (from onboarding through retirement), you can help clients avoid the need to add disconnected solutions to their technology stack – which can cause integration challenges and diminish employee experience. Plus, a cloud-based system will provide the flexibility to grow with your client base and their businesses. 

Pass the field with analytics.

Leading HCM vendors are incorporating analytics capabilities including artificial intelligence (AI) and machine learning. While there has been fear of “the robots taking over,” HR leaders are getting more comfortable with the benefits of AI. In fact, the majority of HR leaders (58 percent) believe it will evolve human HR jobs, which could be beneficial for your service bureau. 

As employee expectations regarding their work environment and their employer continue to shift, analytic tools become increasingly powerful in identifying emerging trends and predicting important changes. In people management, that capability is incredibly powerful. Combine AI with traditional HCM capabilities and you are well on your way to helping your clients shape a more impactful employee experience.

Claim your victory.

With these factors behind you, your race toward providing clients with a solid yet adaptive HCM strategy is well underway. Going forward it is important to keep reassessing your competition, long-term goals and approach to upcoming solutions like artificial intelligence. This will help you not only win the competitive advantage, but also retain and attract more clients as you head toward the finish line.

Mimi Miles

Solutions Marketing Director at isolved