How Administrative Services Organization Benefits Add Up

May 16, 2024
ASO Benefits

An organization's HR administrative burden can be heavy. Small and medium-sized businesses may offset the load by outsourcing some HR administrative functions to a third-party vendor. At the same time, they may want to continue to direct and control their workforce.

One appropriate provider to consider is an administrative services organization (ASO).

Today's post defines an ASO and highlights its benefits. Read on to learn about how ASOs could be advantageous for your business.

The Essentials of Administrative Services Organizations

To get a clear picture of how an ASO can benefit an organization, we need to understand what it is and the functions it generally offers.

Definition and overview

An ASO is an outsourced organization that provides human resources administrative tasks services for its clients. Depending on their specific needs, a company may choose to outsource a single HR function or several. But unlike similar organizations (like professional employer organizations, or PEOs), ASOs is not the employer of record for certain payroll tax purposes for the company. The customer payroll taxes filings are under its own I.D. number.

Core functions and services

ASOs offer a wide array of services to their clients. Some of the most common ones include:

  • Payroll processing solution. Optimize payroll processing where clients can run payroll through the ASO’s application.
  • Payroll tax compliance. ASOs supports their clients with payroll tax filings including best practices so they can comply with their payroll tax compliance.
  • Employee onboarding and off-boarding support. Provides the tools to help clients onboard new hires and efficiently managing departing employees is another ASO function.
  • Unemployment claims. ASOs support the company's behalf by providing necessary documentation for unemployment claims.
  • Payroll tax administration. Remits and files payroll taxes for the wages paid through the platform is another service ASOs offer for their clients.
  • Policies and processes review. ASOs also review and provide best practices on company policies and handbooks.
  • Benefits administration. ASOs may help with employee enrollment for company benefits. The client typically sponsors the employee benefits plans.

Enhancing Business Operations through an ASO

Outsourcing HR administrative responsibilities to an ASO provides companies with numerous advantages.

Access to expertise in human resources

Organizations sometimes don't have in-house HR professionals with the knowledge or the bandwidth to handle the company's hefty administrative burden. By outsourcing to an ASO, companies gain access to highly specialized professionals who can efficiently support HR tasks and provide best practices on complex employee situations. This frees up company leaders to focus on core initiatives that drive business growth.

Boosting efficiency in HR services

Organizations are always looking for ways to maximize efficiency, and outsourcing to an ASO can help. Businesses can see a dramatic jump in efficiency when they outsource time-consuming HR tasks. Getting these responsibilities off the company's plate gives HR time to focus on other tasks that increase employee morale and engagement and attract higher-caliber talent. Plus, being more efficient generally results in optimizing operational cost. These advantages help build a stronger, more viable, and competitive company.

HR compliance support with ease

Outsourcing some of the company's human resources administrative functions can  help with compliance concerns. Instead of juggling compliance objectives with a dozen other critical tasks, an ASO provides best practices on these rules and requirement. With the guidance of an ASO, it's easy to comply with relevant laws and regulations. Confidently managing company compliance means less chance of potential claims and fines and other damaging issues that may stem from non-compliance.

Improving productivity and business efficiency

ASOs helps with significant chunks of HR tasks for their clients. By removing time-consuming HR tasks from your employees’ schedules, they can spend their energy on reaching other goals. The business reaps the benefit of this freedom by being able to devote more time to problem-solving, coming up with creative solutions, researching technology investments, and keeping its competitive edge. Companies can allocate their resources better and create a more efficient organization. An ASO's performance management services can lead to a stronger, more engaged workforce. This, in turn, increases retention and helps to cut the cost of employee churn.

HR audit services

Conducting methodical, thorough HR audits helps companies uncover HR operational risks. Through audits, ASOs can identify concerns like potential discrepancies, areas of risks, and review critical processes. By pinpointing these concerns during an audit, the company doesn't have to wait for them to surface to address them. These audits elevate organizational accountability and helps the company navigate and address these concerns.

Innovation and strategic planning support

ASOs bring valuable industry insights and relevant technological expertise to their clients, which they may not have been able to access otherwise. The result? Companies are better equipped to innovate, agilely adapt to changing market trends, and execute strategic growth plans. In addition, they can leverage the expertise their ASO provides to help identify new opportunities, neutralize concerns, and further their competitive position in the marketplace.

Focusing on core business strategy and growth

If your to-do list consists of ten tasks and you remove two, you have more time to perform the other eight. Outsourcing your HR administrative tasks works the same way.

Using an ASO for routine HR tasks means these important responsibilities are covered. This frees up company time to spend on other activities that help increase employee (and client) satisfaction, find new revenue avenues, and research competitive solutions regarding operations, marketing, IT, etc. The peace of mind knowing that HR functions are supported gives way to more strategic resource allocation, market expansion, and customer acquisition.

The Scope of Administrative Services Organization Benefits

ASOs offer numerous benefits that help organizations streamline their HR tasks. Businesses can gain specialized expert knowledge, consistent best practices guidance and help to navigate HR challenges. By outsourcing HR administrative functions to an ASO, companies can renew their big-picture focus on strategic planning and growth execution.

TriNet's HR Plus services combined with the HR Platform is an outsourced solution to help companies with their HR administrative burden and can be a cost-effective option. Our ASO plus services come in three levels: HR Manager, Payroll Manager, and Payroll Tax Compliance Manager and add-on audit services. Find out today which level of support is right for your business.

This communication is for informational purposes only, is not legal, tax or accounting advice, and is not an offer to sell, buy or procure insurance.

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