For independent payroll providers it’s sometimes hard to stand out. Resources are limited and the expenses associated with advertising and expanding new services are prohibitive. For newly minted businesses, it might be all they can do just to get operations up and running efficiently. Meanwhile, very large and established providers (a.k.a. mega providers) are throwing big money into advertising and services in order to expand their market share. What’s a small, independent payroll provider to do?
Option 1: Invest In Marketing, Smartly
While the majority of advertising channels are too expensive for a small provider to consider, some digital marketing channels are nearly free. Great results can be achieved through the use of social media, search engine marketing, and email. But while these channels are free, they are also very competitive and that is why “free” becomes “nearly free.”
Being heard above the noise is no easy task, and so social networks, search engines, and even email platforms offer premium solutions to amplify an organization’s marketing efforts. Examples for each of these include:
- Display ads (search)
- Sponsored/promoted posts (social)
- Targeting/segmentation/automation (email)
Individually, the solutions can be fairly affordable, but investing in premium solutions across multiple digital channels will quickly add up. So, again, the largest providers with more resources to invest will have an advantage over the independent providers.
Option 2: Invest In Your Services
Established independent payroll providers may be seeing their market share slowly recede each year. And unless their clients are going out of business or bringing services in-house, it’s likely that another provider has wooed them with ancillary HR services or software. So while it may have once been feasible for independent payroll providers to survive with the same technology and service offerings, today it’s a different story.
Small- to medium-sized business need more services and they don’t want to juggle dozens of vendors to get it–they want their current providers to offer more. The good news is that with today’s explosive growth and evolution of HR technology, independent payroll providers have an advantage over the mega payroll providers: their size and flexibility.
Envision a speed boat making a sharp turn; now, imagine a oil tanker changing course. As an independent payroll provider, you want to think “speed boat”. A speed boat cannot carry as many passengers as the tanker, but it can quickly change direction and get its people to their desired destination faster–and usually with a smile on their face.
Many mega payroll providers, seeking greater margins, opt to build their own HR software or utilize enterprise solutions for all clients–a one size fits all approach. This might work for some SMBs, but more often, the smaller organizations find the solutions to be a poor fit. Even when these solutions do work somewhat adequately, the technology is updated slowly and with little input or influence from the end-users at smaller organizations. The result is that many SMB clients are saddled with a poor solution that fails to meet their needs, and any improvements to the software are slow in coming. This is “oil tanker.”
But by seeking partnerships with established, customer-centric HR software providers, independent payroll providers can quickly offer their clients more of what they need without the overhead of expensive software or the headaches of an enterprise-level customer service department. Clients will enjoy the same efficient and responsive customer service with their HR software provider as they do with their payroll provider, which means that as a client’s needs change, the providers can act quickly to meet them. That is “speed boat.”
Although a handful of mega payroll providers control between 50%-75% of the entire market, the remainder is hotly contested by other independent payroll providers. And perhaps it’s this competition that is your organization’s more immediate threat. This begs the question, then: are you distinguishable from the next independent provider?
Regardless of whether you believe that your market share is threatened by mega providers, the threat posed by other independent payroll providers when they partner with HR software companies will only increase in the coming years. Can your organization stand by while other providers are striking partnerships with HR software providers? Or is your organization content to watch your market share slowly slip away as more and more clients realize that they can get more value and better services from another provider?
For payroll providers who wish to distinguish themselves among the crowded field of competition–and to do it without losing any more market share–it is imperative that they start considering a partnership with an HR software provider now. To help, ExactHire has produced a free guide, How to Partner with an HR Software Provider, that walks decision makers through a step-by-step process for approaching, deciding on, and establishing a partnership with an HR software provider.
Now you have access to the information and tools you need to bring more value to your clients.
Your choice: will you be an “oil tanker” or a “speed boat?”
For nearly a decade, ExactHire has provided hiring solutions for hundreds of clients across North America and beyond. If your organization is interested in partnering with an innovative, customer-centric HR software provider, please contact us today.