How To Determine if HR Outsourcing Is the Right Fit for Your Clients

Quick look: Many small and midsized businesses (SMBs) often juggle financial, compliance, technology, and growth priorities. Outsourcing human resources (HR), whether through a full PEO solution or a more focused HRO offering, can provide relief and also strengthen a broker’s book of business. Here, we outline 15 key questions to help assess whether HR outsourcing could be a strategic move for your clients.

As a broker, your perspective is significantly valuable to your clients and reflects your dedication to their long-term success. Helping them navigate their business challenges not only alleviates some of their organizational pressures, but it also reinforces your role as a trusted partner focused on their goals.

One way to showcase this dedication is by highlighting how outsourcing human resources (HR) can drive greater value than they may realize. When you can match their evolving needs with a PEO (professional employer organization) or HRO (human resources outsourcing) solution, you deliver real value and measurable benefits.

Below are key indicators that a client might benefit from outsourcing some or all HR functions. These topics can be used as conversation starters, helping you uncover pain points, frame the advantages of outsourcing, and guide clients toward tailored solutions.

Employee benefits

Questions to ask your clients:

• “Are your healthcare renewals becoming more challenging due to pricing, age banding, and product availability?”
• “Is it burdensome to manage Affordable Care Act (ACA) compliance and administration?”
• “Are you losing top talent to competitors offering more desirable benefits packages?”
• “Is the benefits administration workload overwhelming your internal team?”

How outsourced HR helps: When SMBs choose a PEO solution, they can gain access to group medical plans with more favorable terms, minimizing issues like adverse age banding and enhancing network options.

Additionally, PEOs often oversee ACA compliance, from preparing and distributing forms 1094-C and 1095-C to managing enrollment and ongoing eligibility. And because outsourcing brings scale, benefit plans tend to be richer and more affordable, helping clients attract and retain talent.

HR outsourcing solution providers also typically offer user-friendly benefit administration technology and helpful service teams that specialize in answering employees’ benefits- and HR-related questions.

HR compliance

Questions to ask your clients:

• “Are you having difficulty keeping up with ever-changing state and federal regulations?”
• “Do your employee handbook and company policies address the realities of a distributed workforce?”

How outsourced HR helps: An outsourced HR partner brings compliance expertise and tools so clients can stay ahead of changing laws.

Their robust human resource information system (HRIS) platforms help enforce consistent practices, such as time off tracking, salary classifications, and wage and hour laws.

The compliance experts at HR outsourcing firms also help SMB leaders understand regulatory provisions in plain language, explain how these laws affect their organization, and manage tasks on their behalf.

For companies that operate across state lines or have a distributed workforce, this matters even more, as each jurisdiction can have its own rules. With outsourcing, risks are mitigated, and companies can reduce the chance of costly penalties or lawsuits.

Growth and talent management

Questions to ask your clients:

• “Has your company recently reached certain milestones like employing over 50 employees or operating in multiple states?”
• “Is your internal HR team spending more time on day-to-day tasks than on strategic initiatives?”
• “Are you experiencing elevated turnover rates that may signal deeper people challenges?”
• “Would a structured approach to hiring and performance management help strengthen your team?”

How outsourced HR helps: When businesses grow, their HR responsibilities multiply: more employees, more locations, more regulations. An HR outsourcing partner can take on day-to-day operations, streamlining HR for expanding and/or geographically disbursed organizations. This frees up internal resources to focus on strategy surrounding talent development, company culture, and leadership planning.

Further, HR outsourcers can make increased employee turnover less mysterious. Their teams can help diagnose root causes (i.e., uncompetitive benefits, cultural or management issues) and build actionable improvement plans.

In addition to reducing departures, HR outsourcing companies also assist SMBs in bringing on new talent. With a targeted approach to hiring, they can provide valuable industry intelligence, compensation benchmarking, job posting templates, applicant tracking tools, and more.

Technology capabilities

Questions to ask your clients:

• “Would an HRIS platform with a self-service employee portal for payroll, personal information, benefit administration, and paid time off (PTO) make HR easier for your team?”
• “Are you looking for greater visibility into your company data to analyze trends and forecast business needs?”

How outsourced HR helps: A strong HR outsourcing partner will provide an HRIS with tools for employee self-service, time and labor management, benefits administration, performance tracking, and more.

These integrated dashboards enable clients to identify key trends, challenges, and opportunities. With better data, SMBs can make informed strategic decisions, see return on investment (ROI) more clearly, and respond faster if issues arise.

Dissatisfaction with current HR solution

Questions to ask your clients:

• “Do you manage multiple providers for HR, payroll, benefits, and compliance, and find it time-consuming or frustrating?”
• “Are you underwhelmed with the response times or level of service from your current HR vendor?”

How outsourced HR helps: Clients simplify their vendor landscape by working with a single, full-service HR outsourcing provider, like a PEO. For many SMBs, outsourcing HR means fewer surprises, less administrative friction, and more peace of mind.

A top-tier provider will offer clients dedicated points of contact, streamlined billing, and simplified processes, plus personalized support from real people who promptly respond to inquiries.

Brokers and clients can gauge an HR outsourcing partner’s strength by its Net Promoter Score (NPS) and client retention rate. For instance, ExtensisHR maintains an NPS over double the industry average, as well as a 93% client retention rate.

Bringing it all together: Is outsourced HR the right fit?

When several of the indicators above align for a client, it’s a signal that HR outsourcing might be a relevant solution. The more boxes they check (i.e., stress about benefits administration, compliance risk, technology gaps, and rapid growth), the stronger the case.

By suggesting HR outsourcing, brokers position themselves as value-added partners and trusted advisors. You can help clients reduce risk and unlock operational and financial efficiencies, while also unlocking new streams of revenue for yourself.

Why ExtensisHR stands out from the rest

HR outsourcing helps SMBs streamline their HR processes, stay compliant, and access competitive benefits and cutting-edge technology. However, providers vary widely in quality.

With enterprise-level expertise and benefits options, but a boutique approach to customer service, ExtensisHR stands apart from the competition. Here’s a closer look at what makes us different:

• Customizable employee benefits: No standard templates here; instead, clients can personalize their benefits packages to meet their workforce’s needs and lifestyles.
• Unparalleled customer support: Our customers receive three layers of dedicated support and a full-service team: an Account Manager, HR Business Partner, and Payroll Specialist. Additionally, worksite employees can bring their HR-related questions to our Employee Solution Center team, who answers the phone in under 15 seconds.
• Complimentary recruiting: Our PEO solution includes full-cycle recruiting services at no additional cost.
• Risk and compliance expertise: We know local, state, and federal regulations inside and out, keeping companies protected no matter where they do business.

With the right HR outsourcing provider by your side, you can deliver tangible value to clients and expand your book of business.

Help your clients take their HR to the next level. Connect with ExtensisHR today and let us help you lock in more business.