Andreas: Welcome to the PEO podcast, where we interview industry leaders to discuss all things PEOs, from compliance to technology to client relations and everything in between. I'm your host, Andreas Deptolla.

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Tim: We continue to grow, continue to revise our processes, continue to hone how we interact with the customers in our community. And that's not always easy because their tastes change over time as well where you have things happen that then reflect how you have to interact with them.

Introducer: Welcome to another episode of the PEO podcast. Today, Andreas sits down for a special in person interview at the Prism HR live conference with Prism's own, Tim Pratt. They dive into data solutions, networking in the industry, and Prism HR initiatives.

Andreas: Tim, thanks for for coming and coming to the show and inviting me to your suite suite here at the Prism HR Live Conference.

Tim: Excited to be here, Andreas. Thank you for, for having me on the podcast. Excited to be here. We're in the middle of Prism HR Live, connecting with all of our members here this week. So it's a it's been an exciting week.

Andreas: And I'm sure an exhausting week for you as well. Right? Ho hosting, you know, a lot of clients, right, meeting with partners and whatnot. So thanks again for for for taking the time. So let's let's start off with, you know, you we talked earlier about your LinkedIn profile, and there was a station or 2, right, in the in the in the PO world.

How did you get started in the industry? And, like, tell us a little bit about your your career.

Tim: Yeah. That's a great question. Thanks for asking. I've definitely had a a few jobs. So it's interesting.

I I graduated college pretty young in in Tampa. And Tampa a Tampa, Sarasota, Bradenton market really is the it's kind of the Silicon Valley of PEOs. You have some of the biggest ones in the country that are that are located and headquartered there or have been in the past. And I graduated college, didn't have any experience. I had a degree in economics and a minor in human resources.

And I've been really unemployed for about 6 months looking for something to do. And a friend of mine came to me. She was a receptionist at an employee leasing company. And I said, well, I have no idea what employee leasing is. And she said, well, you know, why don't you come in interview and talk to my boss and let's see what happens.

And I come in and I interview and, he throws all the other resumes away. He says, I'm gonna hire you. And I said, I don't understand. Why are you gonna hire me? And he says, because you're the only one with a college degree that's gonna take minimum wage.

So which was terrific. And he was right, and I did. And I, you know, worked pretty hard in that job. Mhmm. So the first day I came in and he brings me the stack of papers, and he says, hey.

I need you to to sign and date all these. And I start signing, and I'm signing, and I'm signing, and I'm signing. Then I start to read what the paperwork says, and it says under penalty, perjury of law. I've read, or I've looked at the above documents, and it was an I9. And I went to him and I said, hey, I don't think I'm supposed to be doing this.

And he said, oh, that's standard for the industry. We always always do this. And that was my first exposure, not just to the PEO industry, but kinda the underside of the PEO industry. Some of the things that happened, you know, in the early years of unethical things that, that have happened. So it was kind of a crazy start.

I only lasted about 6 months there, and I bounced around a little bit. And I spent 4 years at Selective HR Solutions in Bradenton. That was run by Rick Ratner and Von Gartner. Rick Ratner is really one of the kind of one of the founders of the PTO industry. So it was great to learn under him and and Joel Duncan.

Ended up leaving there and then spend nearly 9 years at Oasis where I started in the payroll area that led into opportunities in underwriting and learning kind of the financial side of the business. I learned, you know, mergers and acquisitions under Terry Math, their CFO, which was a tremendous experience. And I went back and ran operations at Oasis for a little while before I was going to Questco. I was chief operating officer, then CEO for a few years. And then when that concluded, I had an opportunity to come over to the tech side with Prism HR and started off just running the the marketplace and really understanding, you know, what goes into these partnerships.

At the time, we only had about 12 partners. That was 4 years ago, and now we're up to 60 partners. You can see, like, down on the floor, the floor is buzzing with all the different partners and the customers. I mean, that's one of the fastest growing aspects of our business. How do you around the core product with things to help you customize and drive more efficiency.

We have more partners than ever. It's been terrific.

Andreas: So so you mentioned in your career operations, m and a, finance, tech partnerships. Let me maybe ask you a little bit of an unfair question here. Where's your heart? Is there, like, one area where I would say, like, this is where, you know, I really that this is where my passion is, or would you characterize yourself more as a generalist?

Tim: I would say at this point, I'm more of a generalist, but I will tell you that what I love is to make database decisions. Mhmm. That's where you kind of see, okay, I have some economics back. I'm gonna work in many aspects of of the business. And now I do consider myself a general salesman.

At the end of the day, a PEO is a risk taking and they're taking all sorts of risks. So when you're operating either a piece of that PEO or the entire PEO itself, you're constantly going through this calculus of risk reward in everything you do from the customers you take on from, you know, maybe you have taken some risk and a lot of payroll going out the door without actually being paid for it. Yeah. Because you knew that customer, you're taking risk on your workers' comp and you're staying on the home. You're constantly making these calculation in your head around what is the risk reward.

You have to do that based on data. And then you have to kind of build that with some level of intuition. So I look at myself as being a pretty good general manager and honing that decision making over the years. And hopefully, that's translated into, you know, helping all my colleagues at Prism HR understand what the PEO industry is all about and help us, you know, be a better software provider to the

Andreas: space. It's interesting the the intersection of data and risk. Right? You mentioned, like, there's always more data. Right?

There's always more questions we can ask and analyze about the risk, and you kind of said, like, intuition or the gut feeling. Right? Like, what is what is that intersection for you? At what point do you say, like, hey. We have now enough data to make a decision and, like, you know, my intuition now needs to to govern here and and, you know, decide whether to go left

Tim: or right? Yeah. You you never have enough time to get a 100% of the information. So you'll be waiting a long time to make decisions if that's the case. I I would say if I put a percentage on it, you know, I don't I don't shoot from the hip with 30 or 40% of the data.

I'm getting that comfort zone when you're between probably 60 80% of having the data because you also wanna be able to move move quickly in making those decisions. And and you always wanna give a little bit more time to those decisions that are irreversible. But how many decisions do you make every day that are completely irreversible or are changeable in the future. So in that case, you have to make decisions quickly, move on. And if it doesn't work, then you gotta move on to the next decision.

Keep, you know, keep iterating on on that decision till you get it right. And as long as you learn and move fast, that's okay. But if you're gonna wait to get a 100% of the information, you're just figuring analysis paralysis, and that doesn't really work.

Andreas: A 100%. Yeah. And I think it's it's about, like, great managers or leaders figure out, like, what are these decisions where you have to pause. Right? And and, you know, that could be critical for for organization.

Tim: Produce some great tech. So, I I mean, do you agree that you have to take this through the process and and fail fast?

Andreas: Yeah. I mean, like, for us, it's all I mean, I think you you said it right in terms of, like, there are certain decisions that can kill the company. Right? You know, you think about security. You think about certain risk and whatnot.

I think that that's where you just have to pause and and and whatnot. But, like, you know, how I think about oftentimes decision making, like, these have to be educated bets sometimes, right, specifically as you're scaling up a company. And and you will make 4 or 5 of these a year, and maybe 2 or 3, work out the way you want

Andreas: it to. And I think

Tim: that has to be in the calculation.

Andreas: Right? So I think that's if you go into that with with that expectation. Right? And, you know, it's important, obviously, for the shareholders right now and employees to understand why we're making certain decisions. And, like, you know, as long as we have the right intention at the point of decision making, I think, you know, it's it's all good.

Tim: Good. K.

Andreas: So I wanna go back to the early days of of your career. Maybe there's something like, you know, a surprising moment, a war story on along the way that maybe even, like, your your current team at Prisma Zhao doesn't know about you. Right?

Tim: So I worked at a small company based in Palm Harbor and I won't bring it to me. I talked a little bit about the first BR I worked at me and the underbelly of some of the unethical things that happened. So I ended up, excuse me, working at this small PEO in Palm Harbor, Florida. And we paid around 1500 worksite employees, but the the company was not the PEO was the smaller the businesses. It was owned by a guy that had a day labor company.

And hurricane Katrina had just come through New Orleans and Biloxi. And he had day labor offices up in those those areas. So 2 days after that happened, he sent myself and another gentleman from our office up to the Biloxi area to go, sign people up and get them on the workers comp. And the entire ride to Biloxi, this just made me really uncomfortable where you start to really question your kind of life choices. Like do I want to work in a business that is setting this low of an ethical mark?

Do I wanna figure out how do I take this to the next level and start to you know, I couldn't use that as a as a measure of how I want my own ethics to be in the future. So I decided pretty quickly and pretty early on that I had to leave that. So I came back and I think 2 weeks later, I quit that position to go find something else to do because that was just a totally untenable thing when you're being asked to do something that is absolutely unethical. So I just couldn't bring myself to really find much success. I didn't even talk to more than a handful of businesses while I was in Biloxi and came back about 4 days later.

And, but just, you know, crazy time and this sort of thing happened in the PEO.

Andreas: But a crazy ask as well. Right?

Tim: It's a crazy ask.

Andreas: Right. But an interesting inflection point. Right? For you to say, like, hey, this is not how I wanna foster my career here. Right?

And to say, hey. I wanna work with with people who have the right small campus, so so to speak.

Tim: I and I so and at that time, when I left, I did something, and I think this is more common today than it was back in the in the early 2000. I made a list of employers that I actually wanted to work for. And I knew in the PEO business, I wanted to stay in that business because I loved it. You know, sometimes you don't pick your your career. Your career picks you.

Once I got into this business, and I learned what an impact that PEO or any HR outsourcing that you can have on all those employees. It's, it's pretty pretty tremendous. So you really, you know, learn what you liked and didn't like, and you're able to set that higher bar. And once you kinda start to gain that identity of who you are and what kind of leader you wanna be, be pretty transformative. So I made this list of companies that I wanted to go work for.

And Oasis Outsourcing was one of those. In the early days of Oasis, and I say this was the early days. They'd already had 50,000 employees by the time I got there. But they were leading with real ethical intention. Mhmm.

And that was pretty important to me. They had a strong desire to be more obsessed. Service obsessed around everything they did for their customers. And when you can find an organization with that type of purpose and that type of intention, it can really resonate to the core and you can find yourself in a career, someone like that. So that really helped accelerate my career because I believe in the mission so much that helped me get into newer and newer positions along the way.

I think I had probably 7 or 8 different titles along the way in about 9 years then.

Andreas: So so you entered Oasis when they're around 50 1,000 Yes. Worksite employees. Right? When you left the organization, at what scale was it? Like, tell us a little bit about that ride.

Tim: Yeah. The the the ride was was a little bit crazy. So when I left Oasis 8 years ago, they were at a 160,000 worksite employees. Mhmm. I had a front row seat to how do you scale a business?

Because at the time when I got there, we had about a 150 employees. When I left, we were close 600 employees and that was the biggest business I I work in. And when you get that front row seat and you start to understand all of the drivers of the business, the, you know, how do you get new business? You now understand all the drivers of customer retention and what drives, you know, those small business owners to stay with you or think about leaving a camp. Do you understand kind of the slipperiness of rate increases and your cost structure on your rates and how all of that is a big recipe.

And there's a lot of decisions that have to be made to help scale that business up. But at the same time, all of your processes become different too. Mhmm. And a 160,000, that's a lot different than 50, 50,000. So, you need a whole different set of processes to be able to support those customers.

So growth is painful. Mhmm. And that's probably the biggest lesson I've learned. Everyone says, oh well, you know know, if we just did this we'd feel better about it. Well, if you're a growing business, you're always in a very uncomfortable position.

It makes employees uncomfortable too. I mean, we've seen that at Prism. We've grown Prism almost similarly when I came to Prism 4 years ago. We had around a 130 employees. Now we're knocking on the door of 600 employees, and you have to start to do things differently.

That makes it uncomfortable for people because they have to grow and either they're either keeping up with the change or they're leading the change. You're on one of those two sides of the of the coin, but it means that we all have to continue to to grow and change.

Andreas: Did you, for doing both of those, opportunities, right, now as prison and then at Oasis, during that tremendous growth, did you see certain inflection points where either employees opted out and say, like, hey. This is not my organization anymore, what I wanna do, or where you as the leader had to say, like, you know, hey. Now we need a different kind of expertise or personnel here where you had to make certain changes.

Tim: Yeah. You you it's an interesting question. So you go through that a lot where you see these inflection points. In in the PEO space, you can almost define it as certain worksite employee thresholds where you start to see that. Like you can most PEO owner can get their PEO to about 5,000 employees.

5,000. And then it starts to require significantly bigger investment in the sales team, in automation, in your technology to get from 5,000 to 10,000. And well, then you have to decide how much money you're willing to invest to go do that. The same thing is true at at Prism HR. We we continue to grow, continue to revise our processes, continue to hone how we interact with the customers in our community.

And that's not always easy because their taste change over time as well. Where you have things happen that then reflect how you have to interact with them. And what I what I mean by that is, you know, we had a cyber event last year. Mhmm. Well, we were down for 4 days for some of our customers, some of our customers going up for 2 and, and or anywhere in between.

But then that has to change your approach to how you serve your customers after some of those inflection points. So it's not so much a growth in terms of scale, but growth in terms of the approach that you then have to take to to satisfy and delight your customers along the way. And that that's then gonna be different after something that is, you know, creates such an inflection point.

Andreas: If you look at the the PO level, right, you said, like, there's these certain inflection points we discussed before. And, like, you know, 5,000, 10,000, right, at one point, you could scale. What typically what have you seen with with, you know, your clients, partners, or whatnot that determines that growth? Is that the mindset of the founder? Is it the region where the PO is located?

Is it external money that's coming in? What are kind of, like, the typical criteria that determines where and not to say one is better than the other. Right? You might have, you know, as as an owner, you might have a POs, 5,000 bauxite employees that's that's really run an engine that's running smoothly. Right?

And that might be exactly what that person wants. Right? But I'm curious to see from your side. What have you seen? What what determines that growth curve?

Tim: So I think you have a couple of things at play. When you're smaller, you have this income effect happen where you're you build that thing to 4, 5000 employees. You're, you know, the income before you start to pay owners is a million to a 1,000,000 and a half dollars a year. That's great money. Now do you wanna take half or 3 quarters of that $1,000,000 and start to invest that in the hopes that you get bigger?

Do you wanna risk screwing up the company? At that point, no. So you're not looking for growth per se in worksite employee count because that requires investment, but you do wanna continue to drive growth of margin expansion on different ways.

Andreas: Combinability. That's

Tim: right. You wanna continue to improve the profitability of your existing customers. So you're still looking for some level of growth there, but you're not necessarily investing to go get more worksite employees. Worksite the new worksite employees you're bringing on are just replacing the ones that might be willing to do that. You know, maybe they're being acquired or maybe we want to run out of business or something along those lines.

So you have, you know, to grow and scale, and there are very few PEOs around this country that have done this, requires a mindset of an owner to really invest in that growth. I've also found that helps if you're just hyper competitive. Mhmm. Because you don't, I don't see a lot of owners in this space that are wildly successful that have done so quietly. They hate to lose.

They hate to lose more than the next group down. Like they really hate to lose. So they drive hard to win. And it's not at all costs, but they are driven to really, you know, find that next deal and to grow and to invest the right money into their products, into their program, into their service. Be able to grow that that business.

And then if you're, if you go in with that mindset, the growth could be unlimited. I mean, there are PEOs around this country that have a couple of 100,000 Mhmm. Worksite employees. Eventually, someone's gonna make it to a1000000. And I don't think we're too far off from that, and part of that might be through acquisition.

Part of that is going to have to be organic then. And to drive it organically, you have to have a very clear value proposition. And those that are gonna be that competitive are gonna find an avenue to be able to to do that.

Andreas: That is super interesting about the mindset and the competitive nature of of the people who are who are scaling the business. I assume the the other component might be, at one point, as a founder to move away from being the rainmaker to more of the the architecture. Right? The architect where you now plug in the right players to the right seats. But, Tim, I wanna go back to the earlier conversation.

Right? You mentioned, hey. We are Prism Live conference here. And and my next question is is relevant for this specific conference, but probably also for for other conferences like, you know, we have about 600 people, 600 people here. What have you seen, you know, from the feedback over the years where people said, like, hey, I really got value out of this.

Right? What is what are couple of things that you recommend for participant that come, right, to the conferences strategically to do right, to really walk away from from this week with some takeaways.

Tim: So I don't know what kind of formal feedback we're gonna get at the end of this week. We're in the middle of it now. We always get, you know, most of our participants give us some sort of formal feedback. So far, we're halfway through, and I've gotten a lot of informal feedback. And people seem to take to the content this year.

Mhmm. This year, we did something a little different. In the past, we've largely generalized sessions, and it's some technology or some input from a one of our customers and sitting on a panel and it might be a little bit more general. So this year, we said, hey, we really have 2 different audiences that come to Prism Live. The first audience are those people that are highly technical that wanna learn more about how to use a platform to get the most out of it.

So let's get really specific in training. So this year, we actually launched 4 hands on sessions. So we bring them

Andreas: advice. Mhmm.

Tim: And we do a hands on and walk through walk through a particular topic. The other side to that is we also invite all of the c level folks from our customers. But we want to make sure they're getting value out of it. So but they don't want to go and see how you, you know, get rid of errors when you're processing a payroll. Mhmm.

So we tried to devise a group of more strategic topics for them around to lower insurance cost within your PEO. That was a great topic. John Slabaugh talking about the economy this afternoon. A panel about how you hedge inflation. Really great.

We had some great executive forum content yesterday with content designed to specifically speak to CEOs and some of the challenges they may have. And in yesterday's exec forum, we talked a lot about what that future is gonna look like. We had Scott Klososka been in and around the PEO industry for some time, and he was talking about the future and and what challenges might exist and what PEO should be thinking about from that management. So now we can sort of tailor the content into the 2 audiences. And I hope that that resonated this year.

I hope that, you know, everyone that attended really felt like there was value in in either side. We don't see something we call them out of tracks per se. But you can definitely tell there are very specialized technology level courses and how tos and then there are more general courses designed to be a little bit more strategic.

Andreas: So so from the facilitator's perspective, the whole site really trying to understand what are the personas, so to speak, that are coming to and, like, you know, providing the right content. And then I assume networking opportunities as well. Right? Like, for people to, you know, it's obviously you wanna provide content and whatnot, networking, and then people wanna have some fun.

Tim: Well yeah. So there is no doubt about that. And we've had some great educational opportunities this week. We've also had some fun. It was great seeing you at the baseball game last night, and then we have another event site.

But the networking is amazing. So I've been coming to Prism HR live for, gosh, probably about 7 years before I came to Prism HR. And the people you meet and the roles that they're in, every PEO is unique, and we know that. So Craig would be, you know, likes to say this, and you've seen one PEO, you've seen one PEO. We talked earlier this week about PEOs being like stars.

Just how you meet there with the product offering. So when you get a chance to interact with certain people and you try to understand their challenges, in some cases, you know, you might not be having the same challenge. But in other cases, you're like, oh, my gosh. They've solved the problem I hadn't figured out how to solve. So that networking and just the conversations that happen.

I came back every year from Prism Live when I would go as a participant with a stack of business cards and a whole new network of people to actually talk to. And those people were people I could reach out to and say, hey, how do you do this in your business? Or is this a challenge for you? And then that extends well beyond the technology. It's like, hey, you know, I I you know, I need to look for someone that can help me with my cyber insurance or help me with this particular particular workers' comp problem.

You know, I know that you may have had that experience. Can you tell me who you might use? So the networking really starts to extend and creates this full network effect, which is tremendous. I love to see it.

Andreas: And that essentially helps everybody in the industry. That's right. So raise a bar for everybody. So what what are the things, like, you know, from the Pure Prism HR perspective, right, that the organization now is focusing on? What what are the big big topics that you wanna drive forward?

Tim: So so we're we're investing. We're committed to continuing to invest to invest in our customers. The platform that they need to compete in the future. When I think about competing, there's 2 main areas. There's that margin expansion component being much more efficient within the product.

And then there's helping our customer with new business. Both of those are equally equally important. So this started with talent. So we recently hired the president of product and technology, Kevin Ager's. Kevin came to us with a 20 year track record.

He's been amazing. He's been on for about 6 months now. We've already made a lot of progress in the acceleration of our innovation. We've started with a new architecture for data access, and we have we're right now in the middle of testing a new data warehouse product. Mobile is also continuing to play a bigger and bigger role.

Just recently, we rolled out our native mobile application. But now that in and of itself is good. There's an entire mobile strategy that we'll be executing on in the back half of the year to continue to make that make that better, give, you know, our customers the ability to communicate with their employees and message

Andreas: and and that Customize and all

Tim: of that. Customize it a little bit more. So so mobile continues to be pretty pretty hot. That's been in demand from our customers for a long time. And now we're focusing on ASO.

So ASO is another area that our customers have asked for for a long time. If you're there are very few pure play PEOs up. What I mean by pure play is, like, like that's your own model. Most of our customers have started to delve into Mhmm. Nonconeployment types of relationships, which might be just being a pure payroll provider or it might be, you know, this term that we made up in the PEO industry, ASO, administrative service offering, and try to do the payroll plus light HR, plus maybe you can do some insurance administration in certain respects.

But you need a platform that gives you the flexibility that that's self-service so that your customer can serve themselves. So right now, we've dedicated the team to build that engine to go after that particular market really help our customers capitalize on driving some new business. Also, on the tech side, we recently we recently had Dwayne Smith join us as Chief information security officer.

Andreas: Mhmm.

Tim: We consolidated our consolidate our security team under under Dwayne. We're making some further investments on top of the large investments we made last year. And we're continuing to hire and bring in new talent. Because to your point about scale, you always have to be evaluating that talent side who can make the best the best decisions. I would say prior to Kevin joining, we had Gary, our CEO that was breaking ties and making technology decisions.

And you get to a point where you decide you have to make a a different decision. You bring someone in, make an architect, you know, that that future from a technology perspective. And that might be, you know, that's not purely in Gary's wheelhouse right there. So bringing someone in that has done that before really, really well is important to do

Andreas: expertise, has the the background there. Right. You mentioned something that one of the the biggest growth engines within the company is the marketplace. Right? The ecosystem.

Tell us more about that. Tell us more about the growth and the strategy that that you're executing.

Tim: Sure. So we started 4 years ago when I got here, we had 12 marketplace partners. I remember that Prism HR live. It compared to what our marketplace looks like today, it was pretty pretty sparse. I hope we've had a couple really nice long term partners with hiring thing on the app contracting side, time block plus on the time of the labor side.

We built this out for about 60 partners over the last couple of years. It's really we have a couple tenants that are really important to us. 1st, we want to bring products and services into the marketplace that we know are bringing value to our customers. So we could just bring anyone in the marketplace. We don't wanna do that.

So we wanna bring in products and services that are that are meaningful. So I'll give you a a great example. So last year, right before Prism Live in October, we had started talking with CheddarSure. Mhmm. At discount products.

And we didn't have a contract with them yet. And I wasn't even sure that this was this was going anywhere. And I meet with their vice president of sales, Sarah. And Sarah says, I have 5 signed contracts from 5 of your customers. Do you think we should do a partnership?

Yes. We should. Because we can make that If you have POs already that value the product

Andreas: That's great.

Tim: Now I can layer in the technology piece. I know that I can make 1 plus 1 equal equal 3. Mhmm. So we spent a lot of time vetting, you know, vetting these partnerships. Many of the ideas come from the customers themselves.

You'd say, hey, we wanna we need something in this category. Can you help us? And then we wanna do a couple other things within the construct here. So it's important to us that our customers are getting the best possible price. So when we do this marketplace part well, Andres, you know this.

You're you're in our marketplace, and you're an offering, and our customer can't get a better price through you directly than without making this, a a a just a great integration. So, you know, they get that most favored nation price. So we try to negotiate on behalf of all of our customers to do that. We also have to continue to do more, and and we've launched a few partnerships that are premature. And what I mean by premature is they're, you know, we set up the integration, we tested the vanilla instance, and it works.

But then when you get into the real world, you start to make the first couple, you know, they become

Andreas: more complex do.

Tim: And I have talked to a lot about that. Yeah. You know, since the inception of our partnership on okay. Now we come to the realization that we have to do more with uncovering API deals or unique different data access points in order to get that really, really saying for, you know, for the PEA. We have to continue to work on that model to make sure that we can ramp that up faster Mhmm.

In the future than we do today. Because right now, there's a process. The process is just a little bit too slow. So we have to continue to work on that. But ultimately, it's about giving our customer life.

So we're only gonna do between 7 and 10 new partnerships a year. Our goal is not to inundate everyone with all these different marketplace partners. And we wanna have just 1 or 2 in each category.

Andreas: So it's it's it's embedded. Right?

Tim: And it

Andreas: sounds like, you know, this now goes back to what you said earlier about the technology investments. Right? Where, you know, some of those dollars will be deployed into, you know, whether it's access to data, whether it's connectivity or whatnot to to make, you know, this partnership even smoother.

Tim: That's right. How do we continue so so the the next component to that is really UI, UX, and making sure that we get our entire platform looking a little bit more monolithic, easier to use from start to finish. And then we work with our partners who are integrating to get more of a monolithic experience through the entire process as well. By monolithic, you you want to look and feel like Prism. You don't necessarily want it to look and feel like, you know, some other partner.

Mhmm. The PEO has to make that look and feel that way for their clients. So that's really important. So that is a big piece of the strategy and the tactics over the next couple of years is that UI, UX, and making sure that there's a consistent look and feel.

Andreas: That's super interesting.

Tim: Who do

Andreas: you you know, whether that's from from a PO perspective or marketplace, like, who are kind of, like, the innovators in the market right now where you really see, like, wow, these guys are doing some some interesting stuff.

Tim: I think there's a couple out there. The first one that I would say is doing a pretty tremendous job is Sequoia 1 out of San Francisco. Now they serve a very, you know, in it's very upmarket clientele that they have. They're dealing with Silicon Valley companies. Mhmm.

They're dealing with sometimes well funded startups. And they have to have a really, really tech forward platform. Serve that market serve that market a little bit better. So when I think about what they're doing, that's pretty pretty interesting. Mhmm.

You know, if you just go to their site, you can you can see what they've done from a white label perspective, all different components they've added to it. I would say the other one that gets pretty innovative is Venture Reporter Services. So I was on a panel earlier with our leading a panel with Dan Thompson, the chief benefits officer earlier. And he's doing some really interesting things with direct primary care, with level funded health insurance. And even many of your listeners might say, oh, we've tried that.

We don't like it. Well, the question is, how do you start to prioritize some of those things? Make it easy for that business owner to sign up. Dan is starting to starting to crack that code and figure out how you drive more volume while you reduce the overall cost of health care. Because that's really one of the challenges.

Employers at the end of the day, like our mission is the same as our customers. That's the level of the playing field for that small business owner to compete against big businesses. It's the whole Main Street. The whole Main Street, then, you know, that's a rising tide all the way around. But those health care costs are killing those small business owners.

That is one of the I mean, that's a cost that seems to go up by more than inflation every year.

Andreas: Absolutely.

Tim: So how do you keep those cost stable? And even start to find some avenues to bring those down. Mhmm. Dan's been doing a great job of innovating innovating in that area for for some time as part of his expertise to to venture. And that's, you know, I'm looking forward to to seeing some great things in what they're doing.

Andreas: That's super interesting. I gotta make sure I connect with somebody here at the at the conference. You know, Tim, if if you would like, you know, do a quick sort experiment. Right? And assume you're not, you know, at Prism HR, but you're the CEO of of a PO.

Right? You know, what what would you look at, like, from a opportunity and threat perspective, right, for the next 5 years in the market. Right? What are the things to focus on to have on your radar?

Tim: I think there's a couple things. I mean, the the table states is there are always regulatory threats. So you always have to be on the lookout for that. How can you hedge against some of those particularly using various technology components like maybe think HR for some regulatory items or or some of those other partners. I mean, there are a lot of good companies that can help you educate some of those things.

I think if if I were the CEO of a PDO, I'd be going down the path of a niche industry to serve. Because when I look at the, you know, our customers that are out there that are serving niche industries, We have a handful that serve hospitality really, really well because it integrated so many different things together. 4th has done a great job of doing that. 4th is owned by HotSchedules. That's their market.

That's who they serve. They've they've done this really, really well. You have people who has a very high concentration in trucking. That's in each industry. We have another customer.

Customer side of our panel today, NMHR is starting to drive a bigger concentration in, let's say, assisted living. So when you can get really specific about that, then you have HR business partners that understand the needs of those, you know, those clients, those business owners. You're making that much deeper connection than just a surface level payroll benefit HR kind of thing. The other threats out there is you're starting to see these well funded competitors do really well where they have a look and feel of PEO. Mhmm.

Or even Ripley was in that business before they got into the PEO space. But there are more substitutes today than there ever had been. So typically, you know, 20 years ago, you're with ADP, you're with a local PE, or you were doing payroll through your account. That was it. There weren't a lot of other other well funded options.

Right? Paychecks was a big Oh. ADP too. But now, there are so many I I don't know how small business owner makes a choice. Like, no one I don't think anyone ever wakes up and it's like, oh, gosh.

I need to find a a payroll company today. I mean, if you just Google payroll company, you're gonna get a list of 9,000,000, you know, companies companies on. So I think the the companies today that are gonna be successful in the future, they're gonna have to continue to broadly adopt and embrace technology to both automate and bring their customers a different experience. That, you know, I I think we have to have more innovators that are thinking about that. You also have to automate more processes.

Think that, you know, Ripley getting into the space is interesting, but Ripley automated both some EHR processes, but they went a step further and started thinking about it as employment. Mhmm. And they automated even the, you know, getting you your computer and the login processes and some of the IT. So we as entrepreneurs in this space have to start thinking about what are the other processes that could be automated that are related to employment, and then what's next. And if we're not thinking about those things, you know, within our customers, there's someone out there that is.

So we're gonna have to be diligent and really getting innovative into the into the future and understanding that and starting to chip away at how you do a job for a customer. How do you really start to automate those things and make it, you know, make the platform, make it everything to be easy to use. So I think that's and and that might even sound like something I probably would have said 5 years ago, but it's still true today. Mhmm. That's the thing about it.

Like, you stuff on making things, you stuff to be thinking about where the small business owners are are going to. The age of small business owners is getting younger. So that certainly means they're gonna embrace more. Technology than they ever have. I mean, you you see that with your own business.

I I I mean Absolutely. It's just it's just the nature of the the beast, I suppose.

Andreas: Tim, thank you so much for taking the time today. You know, we could probably continue for another 2 hours here. Okay. It was it was a pleasure and I think a lot of really, really good nuggets. If somebody wants to reach out to connect and, you know, with you dive into those topics a little bit deeper, what what's the best way to connect with you?

Tim: I I love to. And, Andreas, thank you so much for having me on the the podcast. It's always great to see you in person. I'm glad we're able to do this at at Prism HR Live this year. I love talking about the PEO space and HR outsourcing, so I always love that conversations around any of these topics.

You can email me at tpratt@prismhr.com, Or you can find me at Tim Pratt on LinkedIn. And again, just love to connect with folks and really just love talking about these things. So I appreciate you you have me and look forward to seeing you again.

Andreas: Awesome. Thanks again.

Andreas: This podcast is sponsored by Thrive Pass, a trusted PO partner for employee benefits from pre tax accounts to COBRA administration. Thrive Pass empowers employees to thrive through exceptional service and innovative technology. More at thrive pass.com. Thanks for listening to today's episode.

Andreas: Don't forget to subscribe and visit us at pod podcast.com to learn more. I'm Andreas Deptolla and this is The PEO Podcast. We'll see you next time.

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