Choosing the Right Human Resource Management Solutions

Choosing the right human resource management solutions isn’t just an operational decision for businesses. It’s a strategic HR move that can shape your organization’s growth and success.

There are many options out there, including PEOs, ASOs and HRISs, each with unique strengths and support levels. The model that aligns with your business depends on your business’s goals, size and evolving needs.

This article will dive into the opportunities and challenges of each, helping you decide the HR solution for your business.

Understanding the Three Types of HR Solutions

When looking at HR management solution options, it helps to understand the differences between PEOs, ASOs and HRISs. Each offers unique benefits that are suited to different business needs. 

Professional Employer Organizations (PEOs)

A PEO provides comprehensive HR solutions and becomes the employer of record for certain purposes such as payroll tax. PEOs help handle a broad range of HR functions including payroll services, benefits administration, compliance support, risk mitigation and HR technology. Employees may also have access to a wide range of benefits sponsored by a PEO. 

The PEO is the employer of record. This means the PEO takes on certain responsibilities such as payroll taxes for payroll processed through its platform, workers' compensation administration and benefits administration for PEO-sponsored plans on behalf of the client. 

Small to medium-sized businesses often use PEO services to obtain broad HR support and access to competitive employee benefits.

Administrative Services Organizations (ASOs)

ASOs offer administrative support services such as payroll processing, HR software solutions, employee benefits administration, HR support and help with HR compliance. The client remains the sole employer of record. 

ASO services may offer varying levels of support and can be selected to help meet specific need. ASOs may offer assistance with benefits administration, such as enrollment and eligibility support, but the client sponsors its own benefits. 

Human Resources Information Systems (HRIS)

A human resources information system, or HRIS, is a software that collects, stores and manages employee data. HR professionals and business managers use this type of HR management system to automate standard HR processes like hiring, payroll and workforce management.

HRIS solutions typically give employees access to HR functions and services, which saves time for HR personnel and business managers. These sophisticated, cloud-based platforms can also enable business leaders to generate reports and analyze company data in real time.

HR Function Analysis: Opportunities and Challenges by Solution Type

Let's compare these systems across some of the main HR functions.

Payroll processing

Payroll processing involves the administration of employee pay, including calculating pay, withholding payroll taxes and deductions, remittance and paying employees.

This can also include filing payroll taxes, issuing pay stubs, maintaining payroll records and supporting compliance with local, state and federal rules and requirements. Efficient payroll processing is crucial to employee satisfaction and compliance.

PEO Opportunities

• Supports with multi-state pay and payroll compliance
• Economies of scale may optimize costs
• Streamline and simplify payroll processing in the HR platform

ASO Opportunities

• Oversight over payroll decisions
• Payroll platform for easy pay processing
• Can assist with pay requirements

HRIS Opportunities

• Complete internal control and customization
• Real-time access to payroll data and reporting
• Integration with other business systems

Benefits administration

Benefits administration is the process of supporting an organization’s employee benefit programs.

Benefits administration can include managing company or PEO-sponsored plans, syncing benefits deduction with payroll processing, helping employees through the open enrollment process and supporting benefits compliance with best practices. Outsourcing benefits administration can help a business align benefit offerings with employees’ needs while relieving staff of tedious administrative tasks. An integrated benefits solution generally offers:

• Expertise support for new hire orientation with benefits enrollment
• A mobile app for on-the-go benefits management for employees
• Timely, sensitive benefits communications
• Automated benefit deductions for greater pay processing data accuracy
• Integrated ACA compliance and reporting support
• COBRA administration support

Effective benefits administration can help organizations attract and retain talent. It also can promote workforce diversity while supporting benefits compliance and employee satisfaction.

PEO Opportunities

• Access to big-company benefits for SMBs
• Simplified vendor management and compliance support
• Reduced administrative burden on internal staff

ASO Opportunities

• Maintains control over benefits strategy and vendor relationships
• Can develop programs to specific workforce needs
• Preserves company branding in benefits communication

HRIS Opportunities

• Complete control over benefits strategy and implementation
• Direct relationships with insurance carriers
• Customized employee communication and enrollment processes

Compliance support and risk mitigation

Compliance support and risk mitigation in HR involve helping an organization stay on top of HR rules and requirements that may impact your business. This can include support to help navigate and align policies and procedures with rules and requirements, providing best practices and resources on regulatory changes and providing access to required trainings.

Risk mitigation focuses on navigating compliance to help organizations comply with requirements and mitigate risks associated with workplace practices, such as discrimination, workplace safety and employee data privacy. Effective risk mitigation can help address key concerns.

PEO Opportunities

• Expertise to help company comply with HR compliance
• Compliance experts provide best practices so stay up to date with regulations
• Workplace safety programs and workers' comp administration

ASO Opportunities

• Expert best practices and resources to help stay on top of HR compliance 
• Ability to implement company-preferred risk mitigation approaches 

HRIS Opportunities

• Ability to integrate compliance with company-specific policies
• Real-time monitoring and reporting capabilities

Talent acquisition and management

Talent acquisition and management encompass the strategies and processes used to attract, recruit, hire, onboard and retain employees within an organization.

Talent acquisition focuses on sourcing and selecting candidates with the right skills and cultural fit, while talent management includes ongoing activities such as training, performance management, career development, succession planning and employee engagement. These functions help organizations build a strong workforce, foster growth and maintain a competitive edge in the marketplace while promoting diversity and inclusion.

PEO Opportunities

• Access to experienced  HR professionals
• Streamlined onboarding processes and documentation
• Best practices to support the employee lifecycle

ASO Opportunities

• Recruiting tools support 
• Flexibility to adapt processes for different roles or departments
• Maintains company brand throughout the hiring process

HRIS Opportunities

• Oversee talent acquisition strategy and execution 
• Direct relationship building with candidates
• Smooth integration of hiring process with company culture and values

Performance management and employee development

Performance management and employee development involve processes that help organizations assess, guide and enhance employee contributions and growth. Performance management can include:

• Setting clear goals
• Monitoring progress
• Providing feedback
• Conducting evaluations
• Recognizing achievements to support alignment with business objectives

Employee development focuses on fostering skills and competencies through training, mentorship, career planning and educational opportunities. It can enable employees to expand their capabilities and advance in their careers. Together, these functions drive workforce effectiveness and employee engagement. The ability of HR outsourcing companies to easily track these essential HR analytics can make HR much easier for a business.

PEO Opportunities

• Centralize the performance management system and best practices
• Provide access to professional development resources and training programs
• Help reduce administrative burden for managers

ASO Opportunities

• Performance management resources and tools 
• Access to development programs

HRIS Opportunities

• Complete alignment with company culture and performance standards
• Direct manager-employee relationships throughout the process
• Customized development paths and career progression planning

Questions to Shape Your Thinking

Here are some questions to consider as you try to assess each type of HR management solution.

• What level of HR expertise does your business have?
• How important is it to be involved in the HR processes?
• What are the costs of the different outsourcing options?
• What are your plans for business growth and expansion?

Finding the Right Human Resources Management Solutions

TriNet offers different HR solutions to help meet the diverse needs of today’s growing organizations. Whether you’re seeking the comprehensive support of a PEO, the service level options of an ASO,  TriNet provides solutions backed by deep HR expertise and advanced technology.

With TriNet, businesses benefit from expert support for payroll processing, robust benefits administration, HR expertise to support compliance and employee development solutions—all while maintaining their unique culture and focus on core business goals.

We can give your business access to expert HR best practices and tools for:

• Attracting and retaining top talent
• Mitigating risk
• Navigating the complexities of employment-related rules and requirements with confidence

TriNet’s scalable services and consultative approach empower companies to respond to workforce needs as they evolve, whether growing locally or expanding nationally.

To learn more about which HR solutions may be right for your organization, download our free eGuide on Which HR outsource provider type is right for you?