Client Background

Our client, a leader in the Professional Employer Organization (PEO) industry, strives to deliver world-class service to business owners through holistic Human Resources outsourcing in order to relieve them of the burden of HR administrative tasks. However, our client knew that they needed a partner with HR expertise for the following business challenges:

• The cost to serve was very high given the average client size in the industry of just 19
• Their employees were focused on transactional tasks instead of on their customers
• Price pressure in the competitive industry was eroding their margins

The Approach & Business Solution

Cognet HRO assessed the situation and made the following conclusions. First, the current technology fit their client base, but it also created a lot of manual work. Second, because of business acquisitions, our client was experiencing growth spurts and they needed to find a way to reap the synergies. And lastly, Cognet determined that, while our client’s business was a high customer touch culture, the transactional tasks distracted team members from the mission of delivering high quality service that would contribute to their own clients’ success.

Our first recommendation was to identify all non-client facing tasks with primary focus on the highest volume and lowest risk tasks. Next, we proposed a shared operations model where processes involving customer contact would reside with the client and processing and transactions would be handled by Cognet. We and the client would mutually evaluate new technology solutions to exponentially reduce costs with Cognet.

The Results & Key Learnings

Within their first year, our client enjoyed a cost savings of over $2 million. They were able to increase their productivity by 19 percent and free up time for customer service teams to be in front of their clients. Additionally, our client now had better management and accountability with duties outlined in contractual form, not employee performance-based arrangements.
As a result of our partnership, not only did our client enjoy significant cost savings and increased productivity, our client took away the following from Cognet HRO:

• Cost savings has two paths 1) cost per unit or task reduction to free up time for customer contact, or 2) making the hard cost decisions by labor reduction
• Communication and governance meetings are crucial to long-term success and also to increase the acceptance of both teams doing more together
•  Client touch matters more to the small to medium-sized business than transactional processing that they see as a commodity