HR service providers – like other B2B service firms – rely heavily on client satisfaction and service quality to retain accounts and differentiate from the competition. As such, NPS can be a leading indicator of revenue retention, growth, and brand differentiation in a crowded marketplace.

What is NPS?

Net Promoter® Score (NPS) is a client satisfaction and service quality metric based on a single survey question that asks business clients of outsourced HR services how likely they are to recommend your firm to a friend or colleague. Clients respond using a numeric scale of 0-10, ten being extremely likely and zero being not likely at all.

NPS is calculated by subtracting the % of detractors (those who respond with 6 or lower) from the % of promoters (those who respond with a 9 or 10). Click here for a more detailed look at the NPS methodology.

NPS is unique because it offers standardized measurement and reporting on client satisfaction and service quality that can be applied across the HR services industry as a whole, across different provider types and practice areas (PEO, ASO, HRO, RPO, etc.) at the company-level, and even by client category.

NPS for HR Service Providers in 2018

NPS for HR service providers is a target topic for Inavero’s annual industry benchmark study, and in 2018 clients of outsourced HR services reported an NPS of 8% based on overall satisfaction with the services provided (our sample focused on corporate clients in the U.S. and Canada).

YOY data shows that satisfaction among clients of outsourced HR providers is headed in the wrong direction, with industry NPS falling consistently since a high in 2015 You’ll notice that while the % of promoters has remained relatively consistent, a significant portion of passives have become detractors across the industry, suggesting that HR service providers are struggling to meet – what are most likely changing – client service expectations.

For reference, global NPS standards classify 50% NPS as excellent and 70% NPS as world-class. And recognizable service leaders like Nordstrom have an NPS of 75% compared to Comcast, a notorious service laggard, whose clients give them a -1% NPS. Click here to learn more about the NPS methodology. 

At 8%, the industry service benchmark for HR service providers is well below the threshold for what a client might consider satisfactory service quality. PEOs, ASOs, HROs, and RPOs have a unique opportunity to stand apart from the competition by investing in client satisfaction and service quality and creating credible proof of their commitments.

How does your service stack up?

If you’re not already leveraging NPS at your company, we hope you consider this article a call-to-action. Not only do client satisfaction and service quality represent opportunities to differentiate in an increasingly commodified service industry, they are fuel for company growth.

And if “you can’t manage what you don’t measure” – then you certainly won’t be able to improve it either.

Next steps

  • Ready to get started with NPS? Contact the Inavero team for insights, best practices, and a tour of our survey platform (designed specifically to support professional services firms).