5 Signs that Indicate a Client Could Be Ready to Move to an HCM Platform

The number of people covered by PEOs has nearly tripled since 2008. That’s good news for PEOs.

But it also means the number of small- and medium-sized businesses (SMBs) ready to graduate to a self-service Human Capital Management (HCM) platform is growing too.

That’s also good news. By offering customers a self-service option in addition to a traditional PEO serviced model, you have the best of both worlds. When your clients have the autonomy to handle more tasks on their own, you have more time to earn more profit.

And by better understanding when your clients are ready to move their HR in-house with an HCM option, you can proactively meet their changing needs. “When you offer tools that allow clients to do more self-service and offload labor, their satisfaction goes up,” says Rick Torrence, PrismHR senior vice president, HCM sales.

1. Strong economy

A key indication that companies may be exploring HCM solutions is a strong economic environment. When the economy and business are booming, it logically follows that companies are hiring. As a company grows, so does the need to assess whether a full-service PEO is still the best option or if self-service HCM might be a more attractive alternative.

2. Number of employees

A full-service PEO makes sense for smaller startup companies who are growing their business. They prefer to focus on their core business of providing goods and services instead of managing HR functions.

A PEO model works for companies as small as three to five people. Twenty to fifty employees are considered the PEO’s sweet spot for being fully engaged in a client’s HR management, including applicant tracking, onboarding, performance management and benefits management.

When a company reaches a threshold of 50 to 100 employees, it may begin discussing whether hiring an HR professional or team makes sense. This is the tipping point when business owners need to consider whether a PEO delivers the best value.

3. Exploring self-service options

As a company grows, it may hire HR professionals to handle HR-related tasks. This is an obvious sign they are outgrowing the PEO space and bringing HR in-house.

But hiring HR and administrative staff is costly. Companies may consider leveraging technology to efficiently handle new hires, benefits administration and other services using fewer resources.

4. Looking for the most financially viable option

HCM solutions automate and streamline HR processes, helping companies become more productive and efficient. Increased efficiency creates more capacity. This frees HR staff to do more without the need to add administrative staff. For this reason, a company may determine that an HCM solution is the most financially viable option for them to grow.

5. Trying to reduce overtime

Overtime pay can be an effective tool to manage workload and meet other workforce challenges. But many businesses overcompensate and overpay, leaving them wondering how to better manage this expense. Monitoring payroll manually is difficult, as is assessing the effects of overtime practices on performance management.

HCM systems simplify and automate this process while ensuring better accuracy. An HCM solution can accurately track time and attendance data, generate reports and data-based comparisons to identify patterns, provide insight on scheduling to reduce overtime and help manage compliance.

Self-service HCM solutions help your clients become more efficient as they grow so they can optimize resources and succeed. When your clients do more for themselves, your costs go down compared to a traditional PEO service model and profits go up.

Ultimately, this frees you to focus on your PEO clients or increase revenue by offering additional services. That’s a great opportunity for both you and your clients to grow.

Learn more about PrismHCM.