HR outsourcing solution providers (PEO, ASO, HRIS, payroll) are no different from other business entities. Acquisitions happen. So what are you to do when this happens?
First question is…who is buying who? I would be more leery of your provider being bought, then the other way around.
If your provider is the smaller fish…then maybe it is time to re-assess your HR outsourcing needs and solicit quotes from other providers. Your current provider may say all the right things about how their current portfolio is going to be unaffected…and a “smooth transition” is expected. But after having lived through various b2b acquisitions, there is never a clean transition.
So, re-assess…the door has been opened for you to see what is out there. Maybe an upgrade to a PEO or ASO solution is right for you. Change is inevitable, and often makes your business that much more efficient in the long run.
Found a great (older) article on HR outsourcing…basically, it indicates that smaller businesses are better off going with an HR outsourcing model, such as PEO or ASO, which offers a free HRIS, then buying their own and piece-mealing it all together.
We have seen this time and again. In fact, we just got off the phone with a prospect that has an HRIS that will not allow for performance appraisals. Okay, simple enough. Whatever system they employ would have a module or an add-on that would allow for this functionality, right?
Well, who’s to know. This prospect is a 50 person company that bought a system that is way over their heads. The do not have an on-staff IT person. The company they bought the system from does not return calls. So now they need to either buy another system that can “talk” to their current system or hire an in-house IT person (labor cost on that is at least $50,000 annually).
What they should have done, and this is what we recommend to our clients and prospects with less than 1,000 employees and/or an IT staff that is not willing to put a couple of hours per day into HRIS, is to go with a pay-as-you-go HRIS that includes payroll and support. The annual costs of this solution may look like more money at $250 – $400 per EE, but do the math on having to hire an IT person to run your HRIS.
One of the services that are often overlooked by companies looking at PEO is the fact that they are receiving a free HRIS (human resources information system) in a lot of instances from their provider. How can that be? Think about it. If you are a PEO and you have multiple worksite locations with multiple job codes, pay codes, pay frequency, etc…what is the most efficient way to manage all of that information? HRIS. So a PEO purchases an HRIS, then has additional modules added and layers of security so they can offer what amounts to a free web-based HRIS to their clients.