For those of you wondering when/if smaller clients will begin requiring more HR features and functionality, similar to larger clients, the answer is soon (and sometimes now).  This can be confirmed by ADP’s recent acquisition of HR411.  HR411 was purchased by ADP Small Business and will be targeted to their smaller clients.  

So you have 3 choices on how you, as a payroll company, will respond to this news.  

One, you can ignore it all together and hope that it goes away (but it won’t).  This means you will not embrace the fact that shortly, all businesses continue to have more and more HR requirements.  You might offer some 3rd party HR product, but only on a defensive manor.  This means that as the market matures you will be further and further behind.  Eventually you will be left to compete for 1-5 person payrolls with companies like Surepayroll.com and PayCycle.com, who are masters at this market.

Two, you can match ADP one to one (or close) by offering a HR information product like HR Answerlink.  Many of you offer it now, but likely don’t in an offensive or aggressive manor.  This means that every client that does not have your HR information service is “low hanging fruit” for ADP, because they will focus on what you are not providing them.  As long as you offer it aggressively, you may eliminate HR411 as a competitive advantage for ADP.  But it still won’t be your advantage either; you don’t need this word it will be a mute point for both.

Or third, you can make it your competitive advantage.  Small clients that are interested in HR411 understand that even though they are small, they have larger HR needs.  So you can meet ADP’s HR411 and raise them a full HR system to help them better utilize their new information source.  You can show them that your HR information source has all the samples and templates they need, and your HR system has a full document management system to help implement them.  You can show the prospect that your HR information source has full guides for hiring and performance management, and your HR system has the comprehensive recruiting and performance management modules to help them implement the new things they have learned while automating the process.  So with PlatinumHR you can match ADP’s new HR offering for small clients and raise it to a level where they cannot compete.  This may make ADP’s reps hesitant to even bring up HR offerings when they are against you, wouldn’t that be great.