Insperity, Inc. (Insperity) provides an array of human resources (‘HR’) and business solutions designed to help improve business performance.
The company has evolved from being solely a professional employer organization (‘PEO’), an industry the company pioneered, to its position as a comprehensive business performance solutions provider.
The company’s long-term strategy is to provide the best small and medium-sized businesses in the United States with the company’s specialized human resources...
Insperity, Inc. (Insperity) provides an array of human resources (‘HR’) and business solutions designed to help improve business performance.
The company has evolved from being solely a professional employer organization (‘PEO’), an industry the company pioneered, to its position as a comprehensive business performance solutions provider.
The company’s long-term strategy is to provide the best small and medium-sized businesses in the United States with the company’s specialized human resources service offerings and to leverage the company’s buying power and expertise to provide additional valuable services to clients. The company’s most comprehensive HR services offerings are provided through its Workforce Optimization and Workforce Synchronization solutions (together, the company’s ‘PEO HR Outsourcing Solutions’), which encompass a broad range of human resources functions, including payroll and employment administration, employee benefits, workers’ compensation, government compliance, performance management, and training and development services, along with the company’s cloud-based human capital management platform, the company’s Insperity Premier platform. Workforce Optimization is the company’s most comprehensive HR outsourcing solution and is the company’s primary offering. Workforce Synchronization, which generally is offered only to the company’s middle market client segment, is a lower cost offering with a typically longer commitment that includes the same compliance and administrative services as Workforce Optimization and allows those clients to select, for an additional fee, from the strategic HR products and services that are included with Workforce Optimization.
In addition to the company’s PEO HR Outsourcing Solutions, the company offers a comprehensive traditional payroll and human capital management solution, known as the company’s Workforce Acceleration solution. The company also offers a number of other business performance solutions, including Recruiting Services, Employment Screening, Retirement Services, and Insurance Services. These other products and services generally are offered only with the company’s other solutions.
The company’s PEO HR Outsourcing Solutions are designed to improve the productivity and profitability of small and medium-sized businesses. These solutions relieve business owners and key executives of many employer-related administrative and regulatory burdens, which enable them to focus on the core competencies of their businesses. The company’s PEO HR Outsourcing Solutions also promote employee performance through human capital management techniques designed to improve employee engagement and satisfaction. The company enters into a Client Service Agreement (‘CSA’) with each of its PEO HR Outsourcing Solutions clients under which the company and its client act as co-employers of the employees who work at the client’s worksite, or worksite employees (‘WSEEs’). Under the CSA, the company assumes responsibility for personnel administration and assists its clients in complying with employment-related governmental regulations, while the client retains the employees’ services in its business and remains the employer for other purposes.
The company accomplishes the objectives of its PEO HR Outsourcing Solutions through a ‘high-touch/high-tech’ approach to service delivery. In advisory areas, such as recruiting, employee performance management and employee training, the company employs a high-touch approach designed to ensure that its clients receive the personal attention and expertise needed to create a customized human resources solution. The company utilizes a variety of information technology capabilities to deliver the company’s PEO HR Outsourcing Solutions, including Insperity Premier through which the company, along with its clients and WSEEs, manage employee administration, payroll, payroll tax, benefits, retirement solutions and other HR-related information, creating efficiencies for all parties.
As of December 31, 2024, the company had 83 physical office locations in 48 markets. To take advantage of economic efficiencies, multiple sales offices may share a physical location. In addition, the company had four regional service centers along with human resources and client service personnel located in a majority of the company’s 48 sales markets, which serviced an average of 309,093 WSEEs per month in the fourth quarter of 2024. The company’s service centers coordinate PEO HR Outsourcing Solutions for clients on a regional basis and localized face-to-face human resources services.
Service Offerings
PEO HR Outsourcing Solutions
The company serves small and medium-sized businesses by providing the company’s PEO HR Outsourcing Solutions, which encompass a broad range of services. Both of the company’s PEO HR Outsourcing Solutions offer the following: •payroll and benefits administration; •general HR advice; •health and workers’ compensation insurance programs; •401(k) retirement plan sponsored by the company; •employer liability management; •assistance with government compliance; •personnel records management; and •access to Insperity Premier for employees, managers, and client owners.
The company’s Workforce Optimization solution also provides additional services that the company’s Workforce Synchronization clients can purchase for an additional fee, including the following: •employee recruiting and support; •employee performance management; •training and development services; and •strategic HR projects.
The company’s PEO HR Outsourcing Solutions are designed to attract and retain high-quality employees, while relieving client owners and key executives of many employer-related administrative and regulatory burdens. As a co-employer in the PEO relationship, the company assume or share many of the employer-related responsibilities and assist the company’s clients in complying with many employment-related governmental laws and regulations. Historically, the company has successfully marketed the compliance component of its service offering and that the company’s compliance-related services have increased the value proposition of the company’s service offering. Among the employment-related laws and regulations that may affect a client are the following: Internal Revenue Code (the ‘Code’); Federal Income Contribution Act (FICA); Federal Unemployment Tax Act (FUTA); Fair Labor Standards Act (FLSA); Employee Retirement Income Security Act, as amended (ERISA); Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA); Immigration Reform and Control Act (IRCA); Title VII (Civil Rights Act of 1964); Health Insurance Portability and Accountability Act (HIPAA); Age Discrimination in Employment Act (ADEA); Americans with Disabilities Act (ADA); The Family and Medical Leave Act (FMLA); Genetic Information Nondiscrimination Act of 2008; Drug-Free Workplace Act; Occupational Safety and Health Act (OSHA); Worker Adjustment and Retraining Notification Act (WARN); Uniformed Services Employment and Reemployment Rights Act (USERRA); State unemployment and employment security laws; State workers’ compensation laws; Health Care and Education Reconciliation Act of 2010 (the ‘Reconciliation Act’); Patient Protection and Affordable Care Act (PPACA); State and local law equivalents of the foregoing; The Families First Coronavirus Response Act (FFCRA); The Coronavirus Aid, Relief and Economic Security Act, also known as the CARES Act; The Consolidated Appropriations Act, 2021 (CAA); The American Rescue Plan Act of 2021 (ARPA); Paycheck Protection Program and Healthcare Enhancement Act (PPP); and SECURE 2.0 Act of 2022, as part of The Consolidated Appropriations Act, 2023.
These laws and regulations are complex, and in some instances overlapping. The company assists its PEO HR Outsourcing Solutions clients in complying with these laws and regulations by providing services in the categories set forth below:
Administrative Functions. Administrative functions encompass a wide variety of processing and recordkeeping tasks, mostly related to payroll administration and regulatory compliance. Specific examples include: •payroll processing, •payroll tax deposits, •payroll tax reporting, •employee file maintenance, •unemployment claims processing, and •workers’ compensation claims reporting and monitoring.
Benefit Plans Administration. The company maintain numerous benefit plans for eligible WSEEs including the following: •a group health plan, •a health savings account program, •a health care flexible spending account plan, •a 401(k) retirement plan, •an employee well-being program, •cafeteria plans for group health and health savings account contributions, •short-term and long-term disability insurance, •an educational assistance program, •an adoption assistance program, •group term life insurance, •accidental death and dismemberment insurance, and •critical illness and accident insurance.
The group health plan includes medical, dental, vision and prescription drug coverage. All benefit plans are provided to eligible employees based on the specific eligibility provisions of each plan. The company is the policyholder responsible for the costs and premiums associated with any group insurance policies that provide benefits under these plans, and the company acts as plan sponsor and administrator of the plans. The variety and comprehensive nature of the company’s benefit plan offerings are generally not available to employees in the company’s small and medium-sized business target market and allow the company’s clients to compete with the type and level of benefits usually offered only by companies with a larger group of employees. As a result, the availability of these benefit plans provides the company’s clients with a competitive advantage that small and medium-sized businesses are typically unable to attain on their own.
Insperity Premier. Insperity Premier is the company’s cloud-based human capital management platform for the company’s PEO HR Outsourcing Solutions and is available to the company’s clients with minimal implementation effort. It is designed to provide the company’s service providers with insight into client and WSEE HR information to better support their needs. Insperity Premier provides role-based access to a wide range of human capital management functions, along with personalized content to the managers, owners and WSEEs of the company’s PEO HR Outsourcing Solutions clients, including:
For managers and client owners: •WebPayroll for the submission, approval, and reporting of payroll data; •mobile access to review and approve payroll transactions and employee time entry; •tools to manage the onboarding of new employees; •employee administration functions such as viewing or changing information about employees; •access to client-specific compliance-related information relevant to many HR areas; •reporting and analytics tools to create, view, save, and export reports and data about employees and to perform more complex analysis and visualization of their workforce data with the Insperity People Analytics solution; •ability to manage employee time and attendance information, absences, and paid time off; •access to talent management tools in the areas of recruiting, performance management, and learning management; •access to a library of online human resources forms; and •access to a wide range of best-practices human resources management content.
For WSEEs: •access to view, edit, and change a range of employee profile information; •online check stubs, pay history, W-2 forms, W-4 forms, and other state forms; •employee-specific benefits content, including summary plan descriptions, enrollment status, and tools to assist with benefits selection for Insperity-sponsored plans; •access to 401(k) retirement plan information for covered plans;•e-learning web-based training; •links to benefits providers and other key vendors; •performance management tools including self-reviews and review history, if offered by client; •ability to submit time and attendance information, absences, and paid time off requests, if offered by client; and •mobile access to perform a wide range of employee-specific activities such as reporting time and attendance and paid time off, view pay stubs, insurance coverage and ID cards, view 401(k) balances and other commonly accessed data.
People Management. In addition to the services the company delivers through Insperity Premier, the company provides a wide variety of human capital management services that give the company’s clients access to HR advisors and additional resources normally found only in the human resources departments of large companies. All PEO HR Outsourcing Solutions clients have access to the company’s advice concerning personnel policies and practices, including recruiting, discipline, and termination procedures. Other human capital management services the company provides include: •drafting and reviewing personnel policies and employee handbooks; •designing job descriptions; •performing prospective employee screening and background investigations; •designing performance appraisal processes and tools; •professional development and issues-oriented training; •diversity, equity and inclusion training; •employee coaching and counseling; •substance abuse awareness training; •outplacement services; and •compensation guidance.
Employer Liability Management. Under the CSA, the company assumes many of the employment-related responsibilities associated with the administrative functions, benefit plans administration, and human capital management services the company provides. For many of those employment-related responsibilities that are the responsibility of the client or of both the client and the company, it may assist its clients in managing and limiting liability. This assistance may include safety-related risk management reviews, as well as the implementation by the company’s clients of safety programs, for which the company’s clients are responsible, that are designed to reduce workplace accidents, and consequently, workers’ compensation claims. The company also provides guidance to clients for avoiding discrimination, sexual harassment and civil rights violations, and the company assists with termination decisions when consulted to attempt to minimize liability on those grounds. While the company does not provide legal services to its clients, the company employs in-house and external counsel who specialize in several areas of employment law, have broad experience in disputes concerning the employer/employee relationship, and provide support to the company’s internal human resources professionals. As part of the company’s comprehensive service, the company also maintains employment practice liability insurance coverage for itself and the company’s clients, monitor developments in HR-related laws and regulations, and notify clients of the potential effect of such changes on employer liability.
Middle Market Solutions. The middle market sector, which the company generally defines as those companies with employee populations ranging from approximately 150 to 5,000 WSEEs, has historically been under-served by the PEO industry. The company has a dedicated sales management, service personnel and consulting staff who concentrate solely on the middle market sector.
Other Product and Services Offerings
The company offers other product and services offerings on a stand-alone basis and to the company’s PEO HR Outsourcing Solutions clients. The company also strives to leverage its relationships with the company’s customers to enable cross-selling of the company’s various products and services.
Following are the key components of the company’s other products and services, which are offered separately or as a bundle:
Comprehensive Traditional Payroll and Human Capital Management Solution. The company’s Workforce Acceleration solution is a comprehensive human capital management and payroll services solution for clients that do not choose the company’s PEO HR Outsourcing Solutions. This solution combines a third-party cloud-based human resources software suite that provides integrated payroll, HR administration and employee onboarding, benefits administration, performance management, and time and attendance functionality with HR guidance and tools, as well as reporting and analytics.
Recruiting Services. The company’s Recruiting Services offer direct hire placement on an as-needed basis and provide outsourced support for individual requisitions or large-scale hiring projects. In addition, the company provides consulting services to assist in the creation and maintenance of consistent hiring practices and retention strategies. The company also provides compensation services, behavior-based interview training and talent assessment.
Employment Screening. The company’s Employment Screening services offer a customized approach to background-check reporting for companies. Services include criminal records checks; verification of employment history or education; driving record, civil record and credit history checks; and confirmation of extraordinary credentials.
Retirement Services. The company’s Retirement Services solutions deliver comprehensive 401(k) retirement plan recordkeeping and administrative services to small and medium-sized businesses, primarily in connection with a 401(k) retirement plan the company sponsors for its PEO HR Outsourcing Solutions clients. Services include employee education and enrollment, participant communications, elective deferral withholding and transmission, matching contribution calculation, loan and distribution processing, regulatory filing preparation and nondiscrimination testing.
Insurance Services. The company’s Insurance Services solutions offer assistance through the company’s licensed insurance agency to small and medium-sized businesses throughout the United States to secure affordable, customizable business insurance packages and life, health and disability insurance policies. Insurance Services also assists individuals in obtaining insurance coverages.
Client Service Agreement
All PEO HR Outsourcing Solutions clients execute a CSA with the company. The CSA provides for an ongoing relationship between Insperity and the PEO HR Outsourcing Solutions client. For most clients, the CSA generally establishes pricing for a period of one year and is subject to termination by Insperity or the client upon 30 days’ written notice or upon shorter notice in the event of default. CSAs for the company’s middle market clients generally establish pricing for two years and are subject to termination by clients upon payment of a termination fee or otherwise by the parties upon an event of default. The CSA establishes the company’s comprehensive service fee, which is subject to periodic adjustments to account for changes in the composition of the client’s workforce, employee benefit election changes, and statutory changes that affect the company’s costs. Under the CSA, clients are obligated to pay the estimated payroll tax component of the comprehensive service fee in a manner that reflects the pattern of incurred payroll tax costs. This practice aligns clients’ payments to the company with its obligations to make payments to tax authorities, which are higher in the earlier part of the year and decrease as limits on wages subject to payroll tax are reached.
The CSA also establishes the division of responsibilities between the company and the client as co-employers. Pursuant to the CSA, the company is responsible for personnel administration and for compliance with certain employment-related government regulations. In addition, the company assume liability for payment of salaries and wages (as well as related payroll taxes) of the company’s WSEEs and responsibility for providing specified employee benefits to such persons.
PEO HR Outsourcing Solutions Clients
Insperity’s PEO HR Outsourcing Solutions provide value-added, full-service human resources solutions that are most suitable to a specific segment of the small and medium-sized business community. The company targets successful businesses with approximately 10 to 5,000 employees that recognize the advantage in the strategic use of high-performance human resources practices. Approximately 10% of the overall small and medium-sized business community in terms of WSEEs are ‘good fit’ companies for the company’s PEO services. The company serves clients and WSEEs located throughout the United States.
Marketing and Sales
As of December 31, 2024, the company had 106 sales offices located in 48 markets. The company’s sales offices typically consist of Business Performance Advisors (‘BPAs’), a district sales manager, and an office administrator.
The company develops a mix of national and local advertising media and a placement strategy tailored to each individual market. After selecting a market and developing the company’s marketing mix, but prior to entering the market, the company engages in an organized media and public relations campaign to prepare the market for the company’s entry and to begin the process of generating sales leads. The company markets its services through various business promotions and a broad range of media outlets, including digital marketing, television, radio, newspapers, periodicals and direct mail. The company employs public relations firms for most of the company’s markets as well as advertising consultants to coordinate and implement the company’s marketing campaigns. The company has developed an inventory of television, radio and newsprint advertisements, which are utilized in this effort.
The company routinely seeks to develop new marketing approaches and campaigns to capitalize on changes in the competitive landscape for the company’s human resources services and to more successfully reach the company’s target market. The company has an agreement with the PGA Tour Champions to be the title sponsor of the Insperity Invitational presented by UnitedHealthcare professional golf tournament held annually in The Woodlands, Texas (a suburb of Houston).
The company’s organic growth model generates sales leads from six primary sources: direct sales efforts, digital advertising, traditional advertising, third-party channel programs, referrals, and marketing alliances. These leads result in initial presentations to prospective PEO HR Outsourcing Solutions clients, and ultimately, prospective PEO HR Outsourcing Solutions client business profiles. A prospective PEO HR Outsourcing Solutions client’s business profile reflects information gathered by the BPA about the prospect’s employees, including base compensation, level of benefits, coverage options, job classification, state of employment and workers’ compensation classification. This information is used to generate a bid from the company’s customized bid system, which applies Insperity’s proprietary pricing model to the census data. Concurrent with this process, the company evaluates prospective clients through the previously described comprehensive employer risk analysis. Upon completion of a favorable employer risk evaluation, the BPA presents the bid and attempts to complete the sale and enroll the prospect. The company’s selling process typically takes approximately 90 days for clients with fewer than 150 employees, and 180 days or longer for middle market clients. The process can be extended during economic downturns.
The company has implemented a sales process that allows its BPAs to offer the company’s PEO HR Outsourcing Solutions or refer its Workforce Acceleration, the company’s traditional payroll solution, to each prospective client with which they meet. This strategy allows the company to leverage the same sales force for all of the company’s primary offerings and increases the ability of the company’s BPAs to add clients to its Workforce Acceleration solution when the client is not prepared for PEO HR Outsourcing Solutions. This dual channel approach to selling attempts to reduce barriers to a company becoming a client and allows the company to offer solutions better tailored to the specific needs of the business, including at renewal.
Competition
The company’s largest national competitors include the PEO divisions of large business services companies such as Automatic Data Processing, Inc. and Paychex, Inc.; and other national PEOs, such as TriNet Group, Inc, Vensure, and Rippling.
Benefits and Workers’ Compensation Relationships
Insperity provides benefits to its WSEEs under arrangements with a variety of vendors. The company considers its contracts with UnitedHealthcare (‘United’) and the Chubb Group of Insurance Companies (‘Chubb’) to be the most significant elements of the company’s employee benefits package, as they would be the most difficult to replace.
The company provides group health insurance coverage to its WSEEs through a national network of carriers, including United, UnitedHealthcare of California, Kaiser Permanente, Blue Shield of California, HMSA BlueCross BlueShield of Hawaii, and Harvard Pilgrim Health Care, formerly known as Tufts, all of which provide fully insured policies or service contracts. The health insurance contract with United provides approximately 86% of the company’s participants’ health insurance coverage and expires on December 31, 2026, subject to cancellation by either party upon 180 days’ notice.
The company’s workers’ compensation coverage (the ‘Chubb Program’) has been provided through an arrangement with Chubb (formerly ACE) since 2007. The Chubb Program is a fully insured program whereby Chubb has the responsibility to pay all claims incurred under the policies regardless of whether the company satisfies its responsibilities. The current workers’ compensation coverage with Chubb expires on September 30, 2025. In the event the company is unable to secure replacement coverage on competitive terms, significant disruption to the company’s business could occur.
The company’s plans are governed by ERISA and the Code.
History
The company was founded in 1986. It was incorporated in 1996. The company was formerly known as Administaff, Inc. and changed its name to Insperity, Inc. in 2011.
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