As a professional employer organization (PEO), HR isn't just an important facet of your business; it's your business, period. Client companies rely on you to handle all of their important employee management needs, and if you can't deliver a stress-free experience, they'll go to your competitor or hire staff to do their HR in-house.
You need to be able to execute efficiently on important HR tasks and keep clients happy at the same time. In other words, you need software. But maybe you're not sure what options are out there, or which system will best fit your needs.
We're here to help.
In this Buyer's Guide, we'll go over everything you need to know about PEO software to help you make a more informed purchase decision.
Here's what we'll cover:
PEO software helps PEOs and administrative services organizations (ASOs) perform HR duties for client businesses. Along with functionality to manage your customers' core HR needs—things like payroll, benefits enrollment and compliance reporting, for example—PEO software systems also allow you to create custom invoices and bill clients for services rendered.
PEO dashboard in Worklio
Being a PEO doesn't necessarily mean you need to buy a product solely dedicated to the PEO/ASO audience, though they do exist (e.g., PrismHR). Many popular HR systems offer the functionality PEOs need and cater to both in-house HR departments and outsourced HR service providers (e.g., Paylocity).
PEOs need to make sure that any software they adopt has the functionality to support the services they offer. Here are some common features buyers should look out for when evaluating different PEO software systems:
|Payroll||Manage wage and salary rates for employees. Automatically calculate and run payroll, pay workers, run reports and export payroll costs to the company accounting ledger.|
|Benefits administration||Allow workers to enroll in benefits plans or change options on existing enrollments themselves. Run reports and track program costs.|
|Time and attendance||Monitor employee paid time off and hours worked. Automatically port hours into payroll to calculate accurate compensation.|
|Applicant tracking||Post job openings, create candidate profiles and manage applicants through client hiring workflows.|
|Onboarding||Automatically walk new hires through client onboarding processes. Important paperwork can be signed and stored digitally.|
|Compliance management||Track client compliance with local, state and federal employment laws (e.g., ACA, EEOC, OSHA etc.).|
|Billing and invoicing||Correctly bill clients for services offered. Send customizable invoices and track accounts receivable.|
|Client and employee portals||Gives workers and HR personnel access within the system to view information and perform tasks such as running reports.|
Some PEOs may elect to buy separate HR systems with all the functionality they need and integrate them together, but we recommend investing in one comprehensive solution, if possible.
A comprehensive solution mitigates the risk of data becoming lost or corrupted while transferring between applications, and provides a better experience for clients, who only have to learn and log in to one system.
It would be great if all PEO software systems were priced the same way, but unfortunately that's not the case. Here are some common pricing structures you can expect to run into:
Before you talk to a single PEO software vendor, you first have to ask important questions internally about your goals and constraints.
These include: Which features do you need and which ones do you merely want? What's your budget? If you're replacing an existing system, what have been the most significant pain points you want to remedy? What's your deadline to be up-and-running with new software?
Once you have answers to these important questions and pare down your options, it's time to do demos. Here are some key considerations to keep in mind when evaluating different PEO software systems:
A PEO software purchase isn't something that should be taken lightly. Whatever product you choose will have a profound effect on the quality of service you offer.
This guide offers basic advice, but if you want to learn more, here are some additional resources:
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