All business organizations face serious challenges daily that demand a steady hand. Attracting top talent, hitting employee performance benchmarks, and navigating government regulation are all exquisitely sensitive tasks that must be handled with care. And while human supervisors have traditionally done all the legwork themselves, recent years have seen the “steady hand” more and more become that of artificial intelligence.
Professional Employer Organizations (PEOs) have always been there to provide wide-ranging HR solutions to companies, and AI has only propelled their work forward. Never before has there been a way for PEOs to truly harness the power of data the way that AI provides. Read on to learn more about the work of a PEO and how AI helps them prosper.
A Brief Overview of PEOs
PEOs serve as the backbone of small and medium-sized businesses across the country. They essentially help offload certain labor-intensive tasks from businesses by becoming an employer of record on their behalf. This means the PEO oversees payroll taxes on the employer’s behalf, including:
- The actual issuance of paychecks to employees, including withholding state and federal income taxes as needed.
- Use money allocated by the business to conduct payroll services for the organization.
- Use the PEO’s own Employer Identification Number (EIN) to file tax returns on behalf of the business.
- Perform the actual calculations for all state and federal taxes related to these payments.
These are substantial responsibilities that the PEO takes on. As such, a high-quality PEO can work as an extremely beneficial partner for any business. They free up the company’s diverse resources by allowing them to outsource many of their most time-consuming and laborious operations. The PEO also keeps the business compliant with employment laws at the state and federal levels.
PEOs likewise take care of benefits administration for organizations under their care. They can take a data-driven approach to developing benefits packages for employees, ultimately saving the company money in the process. For instance, a PEO can offer premium access to more cost-effective, but still high-quality, health insurance options than might otherwise be available.
A reputable PEO, one with a strong background and history of supporting clients, can become a strategic partner for businesses of all sizes. They bring a wealth of industry expertise to the organization, fueling employee productivity, satisfaction, and business profits simultaneously.
Creating a More Amicable Workplace for Employees
Calling human resources teams overburdened would be an underestimate. Some of the most important tasks in an organization are assigned to HR staff. They bear the weight of employee wellbeing and organizational success on their shoulders, often in an environment of intense regulatory scrutiny.
That isn’t easy, which is why professional employer organizations work to lighten the load. A modern PEO will regularly use modern technology to streamline its tasks, including powerful data analysis systems and artificial intelligence (AI). Rather than limiting themselves to outdated HR platforms and cumbersome utilities, they often wield the latest tools in data processing and information technology.
This indispensable support extends even to operations as important as recruitment. Traditionally speaking, acquiring talent that not only fits but flourishes in the company isn’t easy. It demands an intensive screening process, coordinated interviews, and a detailed process for onboarding whoever makes it through the selection process.
Streamlining this process — through the use of data analytics and innovative recruitment strategies — can benefit the overall culture of a company. For example, they can help companies find and foster employees who truly match the organization’s ideals and working methods. Employees whose values and outlook align with the company often resonate more and are more likely to stay long-term.
How PEOs Use Data to Help Businesses Thrive
Data is the common denominator in all the work that a PEO does for a company. Companies can and must mine the knowledge they accumulate about their employees and working preferences to find actionable insights. A PEO that integrates these insights into its own collaborative operations can truly bring a company’s work to fruition.
For instance, data influences the decision-making process at every level. From finding new patterns of conduct to creating targeted hiring predictions, an effective PEO can help clients see trends they would otherwise overlook. If hiring peaks or decreases at certain times of the year — or if employee satisfaction surveys yield better results when the company offers a certain benefits package — a PEO can use that data to highlight employee trends/needs.
Moreover, all industries have established standards for employee performance. It’s possible to align company operations with these industry-wide standards to achieve better business results. However, its accomplishment requires a deep level of data analysis.
In addition, the use of precision data analytics can support business operations as diverse as:
- Determining accurate pricing levels. Through analysis of customer spending and the demands of production, PEOs can issue targeted pricing recommendations that turn a profit without scaring away valuable customers.
- Establishing production and performance benchmarks for the entire organization. These are necessary to ensure the company remains at par with others in its industry. It provides a competitive edge to daily operations and helps cultivate a culture of excellence.
- Monitoring employee satisfaction levels. The use of data can identify problematic trends among company employees before they expand into something more serious.
This is the kind of micro-level support that HR teams need most, but PEOs also implement macro-level insights. They take a holistic approach to data management and optimization, beginning with tracking and ending with personalized action recommendations. The amount of time and effort this kind of diligence can save is unparalleled.
Before the advent of AI, it wasn’t so easy to bring together the macro and microscopic levels of support that PEOs can offer. It required a great deal of time and energy, and the process was highly dependent on the individual effectiveness of the HR team. Bridging the gap that lies between day-to-day employee actions and the company’s overarching profits marks one of AI’s greatest technological contributions.
PEOs and the Ongoing AI Revolution
All of this proves that the continued integration of artificial intelligence in business is a monumental leap forward. Historically speaking, many of the tasks discussed required a careful human eye — someone who could constantly monitor progress and make recommendations accordingly. AI sharply diminishes the need for this level of attentiveness, freeing human eyes up for other aspects of the company’s operations.
In other words, machines can now use artificial thought processes to find useful patterns, foresee upcoming changes, and make the right recommendations to their operators — humans. They can autonomously discern and analyze reams of data that would be impossible for a human to sift through in a single lifetime.
And, of course, PEOs are taking advantage of the AI revolution. Just as professional employer organizations have always lived and died by the quality of their data, so too can they leverage AI to take their data farther than ever before. They can accomplish this by:
- Automating common administrative functions, especially in terms of payroll and employee time-tracking.
- Forecasting employee retention models over the months ahead. This can help organizations accurately increase or decrease their staffing levels as circumstances require. Guessing is no longer necessary.
- Enhancing the efficiency of the entire recruitment process. Using AI tools makes it easier and faster to screen potential employees and identify which ones are right for an interview. PEOs and HR teams can now devote their time to fostering good relationships with incoming employees.
- Using advanced machine learning algorithms to find the links between employee turnover, benefits packages, workload, and other drivers of organizational success.
All of this was possible before, but it was not possible to do it at a swift and monumental scale as AI solutions offer. Rather than fundamentally altering the methods of employee and performance management, AI accelerates these methods to a whole new level. The same methods become faster, more efficient, more accurate, and easier to plan around.
Before, there was simply too much data to work through effectively. Now, data collection and processing happen at the speed of the computer’s calculations. It can seamlessly integrate into a company’s current workflow to automate existing tasks without skipping a beat. PEOs, likewise, can exploit AI to augment their services and mold them to the client’s needs like a well-fitting glove.
Partnering With Resourcing Edge
Success in Human Resources demands a strategic mind — both to allocate resources efficiently and understand when more help is necessary. Especially with the fast-moving pace of modern AI technology, the advantages of securing the aid of a dedicated PEO have manifested. They can help companies harness their data to create automated and optimized systems that drive the entire business forward.
That’s why working with a team like Resourcing Edge is such an obvious move. Resourcing Edge not only has experience working as a PEO but also knows how to capitalize on emerging technologies, like AI, to achieve results. With Resourcing Edge at their side, any business can sail the seas of AI adoption with confidence. Contact them to learn more.