For HRO vendors, like many other service providers, small and midsize companies represent the next frontier. Many of the vendors that targeted large enterprises are now tailoring their offerings for smaller companies, while other providers’ offerings are designed from the ground up for small to mid-size companies.

The accompanying vendor comparison guide (see shows the leading service providers that target small to midsize companies, either exclusively or with offerings tuned to administering smaller workforces, anywhere from 10 to 2,000 employees.

They can be divided into two types: traditional HRO service providers and PEOs (professional employer organizations). A traditional HRO sells its services individually, so companies can outsource just one or a handful of HR functions; companies often first outsource payroll processing, tax management and 401(k) administration. Companies can then add services, such as healthcare benefi ts administration, as they become more confident in the outsourcing model. These providers tend to cater to the larger companies
in the midmarket as well as to enterprise companies.

A PEO packages core HR services, usually payroll processing, healthcare benefits administration, and workers’ comp coverage, into a single solution, and then provides it via a co-employment arrangement; the PEO hires a company’s employees to become the employer of record, then leases them back to the company. PEOs lean toward small companies and the smaller end of the midmarket. The traditional HRO providers’ offerings we included are: ADP’s Major Accounts, Ceridian Human Resource Outsourcing (HRO) CoAdvantage Amplify, and Paychex’s Solutions for Large Business. The PEOs we included are: Administaff MidMarket Solutions, Gevity Edge, Oasis Outsourcing, PayStaff, and TriNet Focus. Also included is CheckPoint HR CheckPoint Plus, an ASO (administrative service organization); it delivers services like a PEO but without the co-employment contract. If a vendor offered both HRO and PEO solutions, we chose the solution more geared toward midsize companies.

In general, traditional HRO and PEO service providers handle a common range of HR functions for the customer company. These include day-to-day HR management, healthcare benefits and retirement services administration, payroll processing, tax and government compliance, employer liability management, and job applicant screening. They also offer an online portal for customers’ employees to access benefits information. However, the features within these services often differ, depending on the type of customer the vendor is targeting. A handful of these vendors — Administaff, Ceridian, Gevity, Oasis Outsourcing Paychex, and Trinet
— also post online additional HR-related information to help guide a growing company through the increasingly complex HR rules and regulations.