ASO Myths: Busting the 5 Biggest Misconceptions

June 13, 2024・7 mins read
ASO Myths

Startup culture is full of energy and excitement, but it can still be hard to juggle all aspects of business administration at once. Larger, more established businesses often have the same trouble. An administrative services organization (ASO) can support small to midsize organizations with HR administration. Human resources leaders across many industries have adopted ASO as a solution to improve payroll processing, business efficiency, and much more.

An ASO is an HR outsourcing solution that can provide software and human expertise to cover a narrow band of HR functions or almost all of them. This service allows leaders to focus on business growth and the big picture. ASOs are outsourced vendor providers.

ASOs provide a wide range of services and may come with an advanced Human Resources Information System (HRIS), a cloud-based HR software platform. Some of the most popular ASO services are:

  • Payroll administration. Supporting processing payrolls for employees. In addition to helping with tedious, but essential, tasks like payroll runs, an ASO may also provide a dedicated payroll manager to help process scheduled and off-cycle pay runs for U.S. employees and support with paying independent contractors.
  • Employee benefits administration. Monitoring and supporting employer-sponsored employee benefits. The client usually selects and offers benefits while the ASO can help administer health insurance, retirement plans, time off, leave, and other benefits with benefits administration platform.
  • HR support tools. Includes tools to support with employee onboarding and training, and performance reviews .
  • HR experts. ASO may provide additional services that includes specialists to help address HR challenges and concerns. Some ASOs provide experts to help with payroll tax account set-ups, retroactive filings, jurisdiction recoveries, and payroll tax jurisdiction monitoring for your business.
  • Strategic planning and consulting. ASOs can offer strategic guidance, long-term and short-term business planning, and consulting services.
  • Audit services. An ASO may provide additional services to help uncover HR operational risks that could lead to potential liability, and then provide guidance on how you on can navigate the concerns.

These services are valuable, and ASOs can offer a wide range of options to businesses interested in HR outsourcing. On the other hand, that very flexibility can sometimes be confusing. And the essential nature of HR functions, as well as the sensitive data that may be shared, can cause concern for managers thinking about outsourcing. As a result, a number of ASO myths have popped up. In this article, we'll examine the myths and give you the facts.

ASO Myths

There are many misconceptions about this popular solution for HR outsourcing. ASOs are ultimately people administration associations. They offer business HR support to the well-being of your employees as well as advanced software that helps to manage those support services. Let’s take a look at five of the most common ASO myths and set the record straight.

Myth 1. ASO is only for large corporations

This myth may stem from the idea that only large corporations can afford to maintain any level of HR staffing. There also may be concerns about whether ASO pricing is beyond smaller companies. In addition, this myth might come from a misunderstanding about an ASO's role in employee benefits administration.

ASOs can help small and medium-sized businesses optimize costs — depending on the level they choose — from in-house HR personnel to outsourcing. This flexibility makes it easier, not harder, for smaller companies to maintain human resources teams that can then address less tedious and more nuanced work with employees.

Many ASOs offer different levels of service with different pricing. They also charge per employee per month, so the costs scale to the size of the company. You pay for  the services you subscribe to. This makes ASOs accessible to small and medium-sized companies.

Regarding benefits administration, ASOs may support benefits administration, such as help to administer enrollment, but the client is responsible for selecting and offering benefits.

But that’s no reason to say ASOs are only for large organizations. ASOs can benefit businesses of all sizes. If it makes sense for your business strategy to keep your in-house HR leaders while offering them specialized support, an ASO may be for you.

Myth 2. ASO is only for certain HR functions

This might once have been true, but this myth is far off the mark.

Today's ASOs might not cover everything, but they can come close to it. They can provide add-on services to help with many HR functions or just a few, according to the company’s needs.

ASOs offer services throughout the employee life cycle. They help company leadership with staffing needs through talent acquisition tools, help with meet employees’ needs through work initiatives and employee certifications with learning tools. ASOs also can help like a payroll manager with Form W-2 and assist with processing payroll and direct deposits information.

Company leaders may also be interested in larger-picture services such as employee handbook and experience initiatives like supervisor anti-harassment training.

From a staff perspective, ASOs help to improve the digital employee experience by streamlining services. They are able to offer solutions to help enhance the employee experience.

Myth 3. ASO is a temporary solution

Before the outsourcing industry provided alternatives, the standard vision of success was the development of an in-house HR team of tenured employees. This myth arises from the presumption that the traditional in-house team remains the best for businesses.

In reality, ASOs offer specialized services that can be expanded or pared back depending on the needs and strategy of the company. This customizable outsourcing enables ASOs to be a long-term solution for companies’ HR needs even as they grow.

Myth 4. ASO is only for outsourcing and not co-sourcing

ASOs can also be a co-sourcing solution.

With co-sourcing, you obtain an external resource that supports your team. An ASO can operate in full support with its clients. For example, here are the credentials of experts from TriNet's ASO — HR Plus:

  • Society for Human Resource Management (SHRM) certified HR experts
  • Certified Payroll Professionals (CPP)
  • Payroll managers with 7 or more years of experience in multi-state payroll processing
  • Experts with degrees in accounting and/or finance
  • HR managers with 10 or more years of experience with multi-state HR and payroll processing
  • Experts with knowledge and experience in handling HR compliance in all 50 states

Outsourcing routine tasks allows essential employees to focus on new company initiatives and other strategic projects. With co-sourcing, the company can gain that advantage and still have access to expertise when it's needed most.

Myth 5. ASO means loss of control for companies

Organizations always maintain control of their workforce.

An ASO can perform many functions, but its clients always maintain and remain in control of their operations and their workforce. The client makes all decisions regarding its workforce and business operations.

Get the Facts on ASOs

Market research indicates that ASO services at even the highest tiers are, on average, $94,000 cheaper than hiring in-house. Don't let any myths about ASOs stop you from considering a resource that could help your business in many ways.

As a SaaS leader, we understand the detailed needs of our clients regardless of industry. Find out today how TriNet’s HR Platform plus HR Plus solutions can help your business or nonprofit organization.

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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