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Why “Software as a Service” HR Doesn’t Work

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It’s the latest HR trend – everywhere you look on the Internet, you’ll find companies promising to provide businesses with all the tools they need to administer their payroll, benefits and human resources, with none of the expense of traditional HR outsourcing providers. These “Software as a Service” (SaaS) HR companies claim that their products eliminate the administrative back-office burden associated with human resources. But do these companies really live up to all the hype?

The software part of their business model is correct – SaaS companies provide HR software to help businesses manage payroll, benefits administration and some HR functions. These services tend to be cloud-based applications, and usually feature an easy-to-use interface.

Where these companies tend to fall short on is the service aspect. Any business owner or HR professional will tell you that while processing employee paperwork may be one of the biggest burdens they have, no amount of software is going to take the “humans” out of human resources.

Sure, their software may allow employees to enter their time online, but who do employees call if their paystub is incorrect? Or if they’ve forgotten how to log in to the system? They offer HR compliance advice, but what if your business receives a workers’ compensation claim? Who has to wade through the legal documents and file an appeal?

Most SaaS HR providers don’t have the internal staff to keep up with these requests. Instead, The business’ current HR professional or office manager will still find themselves heavily involved in the each aspect their SaaS HR provider promised to take care of. Suddenly, their claims to relieve businesses of administrative burdens don’t ring as true as they did before, do they?

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So another, perhaps more accurate, way to describe these companies would be “Software without the Service.”

But don’t lose hope – if you’re looking for an HR outsourcing solution that combines software and service, there’s one more acronym you should learn: PEO. PEOs, or professional employer organizations, provide advanced technology with proven processes to help companies manage their day-to-day HR more effectively. Engaging a PEO gives business owners and managers access to an entire team of HR experts, often for less than the price of hiring a single employee. Put the “human” back in human resources outsourcing by partnering with a PEO.

G&A Partners is a PEO that helps entrepreneurs grow their businesses, take better care of their employees and enjoy a higher quality of life by providing proven HR solutions and technology. To learn more about how G&A delivers software with the service, visit

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