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Every facet of life has been touched by this nebulous concept of disruption—including the technical “lives” of Professional Employer Organizations (PEOs). In this blog, we’ll take a look at how disruption shows up as progress in our daily routines, how PEOs have pushed for disruptive changes and how Human Capital Management (HCM) systems can unlock the key for even more growth.
Unpacking a Culture of Disruption
The word disruption gets thrown around a lot these days—and with good reason. It signifies a world of change that could make a world of difference for consumers or businesses by doing things differently.
Disruption addresses the root of innovation. Just because something has always been done a certain way doesn’t mean it should continue to always be done that way. Need a quick graphic that is easy to create? Download the Canva app or similar platforms that have disrupted the traditional content process to make things quicker and easier for the end user.
Smartphones disrupted so many areas of technology by combining photos, files, music and more data all in one device that fits in the palm of you hand.
Ride share services like Uber and Lyft fit the bill, too. They made it possible to get places easier and often faster with the click of a few buttons. No more having to hail a cab on a cold night. Oh, and need entertainment? When it comes to disrupting the video content model, look no further than Netflix and other streaming services. Choose from thousands of shows, documentaries, cartoons and movies whenever you want in the comfort of your own home.
All these service categories have been visited by what we’ll call Disruption Junction. It’s a good place to be, and we believe it’s time for Professional Employer Organizations (PEOs) to pay a visit to this amazing place as well.
PEOs Continue to Make a Difference
PEOs have been doing a great job for well over a generation giving small businesses access to payroll, HR and benefit solutions that would otherwise likely be out of reach for them. The co-employment model continues to benefit thousands of small and medium-sized businesses (SMBs)—and their employees—across the country.
The industry continues to see amazing growth. It has quadrupled in size from 2012 to today to become a $358 billion industry in terms of revenue, according to the National Association of Professional Employer Organizations (NAPEO).
As a PEO, you know the name of the game is helping your clients get to the next level. The better they do, the better you do, of course, which is where HCM comes in.
So, on the topic of disruption, we have a question for you: Is your business ready for an HCM system?
Why Disrupt What’s Already Working?
That’s simple: When a small client grows, you couldn’t be prouder of their accomplishments. Still … the sense that you might be losing a great client and business partner looms as your clients become more and more successful. When they outgrow the traditional PEO model and decide to bring payroll and HR in-house, they may decide to go. Good for them, but not good for you.
Unless …
Unless what?
Glad you asked.
A powerful HCM platform that is built to attract, retain and help your clients grow is vital. Why would clients go elsewhere when they can keep the same look and feel of their current platform, but handle their HR and payroll on their own if they so desire? They benefit from the familiarity, and you benefit because you get keep your client.
Additionally, there are some prospects you’ll never be able attract because they prefer handing HR-related tasks on their own. There’s a whole universe of prospects that you can’t tap into now, but with an HCM option comes more opportunity.
The road to progress and continuing success goes through Disruption Junction, and in this case it’s the HCM Highway!
Understanding HCM Systems
Before diving into readiness, let’s clarify what an HCM system really is. Human Capital Management systems are comprehensive HR platforms that integrate core HR functions—like payroll, time tracking, benefits administration, talent acquisition and performance management—into a single, unified solution.
With all that data, HCM systems offer strategic insights and automation capabilities that help businesses make data-driven decisions and improve employee experiences.
Unlike traditional PEO software, however, HCM systems are run by the clients, so you and they can decide together how much or how little assistance you want to provide.
For PEOs, adopting an HCM system isn’t just about internal efficiency—it’s about delivering better service to clients and scaling operations effectively through a solution that can be white-labeled to match your branding.
5 Signs You’re Ready to Add an HCM System
So, how do you know if your business is ready to make the leap? Here are some key indicators:
1. Your Clients Are Growing at a Rapid Pace
The faster they grow, the faster they can go unfortunately. With an HCM solution, they are more inclined to stay put with something they and their employees are already familiar with. Instead of IYKYK (if you know, you know), it’s ITKTWG (if they know, they won’t go).
2. Client Demands Are Increasing
As your client base grows, so do their expectations. When they outgrow the traditional PEO model, they still want real-time access to employee data, easy onboarding experiences and accurate reporting. An HCM system allows you to meet these demands for you clients with scalable tools that enhance client satisfaction and retention.
3. Compliance Is Becoming a Challenge
Navigating the ever-changing landscape of labor laws, tax regulations and benefits compliance is no small feat. Once a client graduates, HCM systems help automate compliance tasks, generate audit-ready reports and keep clients updated on regulatory changes—reducing risk for them.
4. Clients Are Struggling With Data Visibility
If your clients’ leadership team lacks access to real-time workforce analytics after graduating to the PEO model, it’s difficult to make informed decisions. HCM platforms provide dashboards and reporting tools that offer insights into employee performance, turnover trends and labor costs—empowering strategic planning through a familiar platform.
5. Employee Experience Needs Improvement
From onboarding to career development, employees expect a seamless digital experience. An HCM system can centralize self-service portals, training modules and performance reviews, helping them create a more engaging and productive workplace as they bring HR in-house or just prefer doing it themselves.
Benefits of Implementing an HCM System
Here’s why you should consider adding an HCM platform now:
- Efficiency Gains: Your clients will be able to automate repetitive tasks and reduce administrative overhead.
- Enhanced Client Service: You will be able to offer clients and prospects modern tools and transparent reporting.
- Improved Accuracy: Your clients will continue to minimize human error with integrated data workflows while you can showcase the merits to prospects.
- Scalability: You will be able to support your clients’ growth no matter what their HR tech platform preference is.
- Strategic Insights: Your clients will be able to continue using and generating data to make better business decisions and improve outcomes through advanced analytics.
Choosing the Right HCM System for Your PEO
Not all HCM systems are created equal. When evaluating options, consider the following:
- Integration Capabilities: Ensure the system can connect with your existing tools and is built in a way that it’s easy to add integrated solutions a la carte.
- User Experience: A clean, intuitive interface is essential for both your team and your clients.
- Support and Training: Choose a vendor that offers robust onboarding and ongoing support.
- Security and Compliance: Verify that the system meets industry standards for data protection and regulatory compliance.
Final Thoughts
So, is your business ready for an HCM system? If you’re experiencing growing pains, have concerns your clients might graduate out of your services or just want to elevate your client experience, the answer is likely yes. For PEOs, investing in a modern HCM platform isn’t just a tech upgrade—it’s a strategic move that positions your business for long-term success.
Ready to explore your options? Start by assessing your current workflows, identifying pain points and engaging with vendors who understand the unique needs of PEOs. With the right HCM system, your business can lead the way.
After all, Disruption Junction plays an important function for the future of your business! Learn more about PrismHR HCM, and schedule a demo today!
