The HR and payroll industry is experiencing another significant shift as CoAdvantage, a leading professional employer organization (PEO), announces its merger with PrimePay, a boutique HRIS provider. This strategic move reflects a growing trend of PEOs acquiring HR technology platforms to enhance their service offerings and reduce reliance on third-party vendors.

The merger follows similar industry developments, such as TriNet’s acquisition of Zenefits and Vensure’s acquisition of Namely, signaling a broader shift toward PEOs bringing HR technology in-house. Traditionally, many PEOs have relied on PrismHR as their back-end platform, but new advancements are shaping the industry.

By integrating HR technology directly, PEOs gain greater control over the customer experience while unlocking new revenue streams through bundled services.

The Announcement & What We Know So Far

In a message to employees, CoAdvantage’s CEO described this partnership as an exciting next step for both organizations, reinforcing the commitment to continuity and customer service throughout the transition.

In the internal communication, the CEO reassured employees and stakeholders that clients would not experience immediate disruptions:

“Later today, we will send an email to our customers announcing the merger, outlining what they can expect, and reassuring them that there will be no immediate changes to their platform, plan, or service team.”

To ensure transparency and keep clients informed, CoAdvantage has also shared key resources:

• Official Press Release
• Customer FAQs

For now, CoAdvantage and PrimePay will operate separately, maintaining their current services and customer relationships. However, as with most mergers in the HR and payroll industry, further integration and strategic changes may follow.

Clients should stay informed as updates on operations, technology, and service offerings emerge. While no immediate disruptions are expected, businesses should monitor future announcements for potential changes in service structures, pricing, or platform integration.

OutSail will keep monitoring this development and providing insights to help businesses make informed HR tech decisions.

Why This Merger Makes Sense

The CoAdvantage-PrimePay merger aligns with a growing trend of PEOs acquiring HR tech platforms to strengthen their service offerings and reduce reliance on third-party technology.

For CoAdvantage:

• New HR Technology: Historically, CoAdvantage has depended on platforms like PrismHR for backend HR tech. Owning PrimePay’s technology gives CoAdvantage more control over system customization, user experience, and service integration. This move enhances operational efficiency and allows CoAdvantage to differentiate itself in an increasingly competitive market.
• New Customers: PrimePay has a well-established client base of small and mid-sized businesses using its HR and payroll solutions. Through this merger, CoAdvantage gains a direct pipeline to these businesses, many of which could be converted into full-service PEO or ASO clients. This expansion strengthens CoAdvantage’s market position and increases its long-term revenue potential.

For PrimePay:

• Financial Backing & Growth: As part of CoAdvantage, PrimePay now has greater financial resources to scale its platform, enhance product development, and expand its market reach.
• Potential Shift in Business Model: While PrimePay has traditionally offered standalone HRIS solutions, CoAdvantage may integrate it into its PEO offerings, potentially phasing out standalone services over time. Customers should stay informed about future developments.

The Growing Trend of PEOs Acquiring HRIS Platforms

CoAdvantage and PrimePay aren’t the first to take this approach. Recent deals show a clear industry pattern:

• TriNet acquired Zenefits – Later phased out the standalone HRIS, pushing customers toward PEO services.
• Vensure acquired Namely – Integrated it into a broader managed HR service model.

PEOs want more control over technology and the ability to upsell services, rather than simply licensing a third-party platform. This shift could mean fewer independent HRIS options for businesses that want HR software without bundled services.

What This Means for PrimePay Customers

PrimePay has long served small and mid-sized businesses needing payroll and HR software without committing to a full-service PEO. However, acquisitions like this often lead to shifts in business models that impact customers.

• Expanded Service Offerings: Clients may gain access to more HR, payroll, and compliance solutions under CoAdvantage’s larger umbrella.
• Standalone HRIS Uncertainty: PrimePay’s independent HRIS offerings could eventually be phased out in favor of bundled PEO solutions.
• Potential Pricing Changes: Customers may face higher costs or be encouraged to transition to managed service models.

A key precedent: Zenefits customers were recently forced to migrate or find a new HRIS after TriNet shut down standalone HRIS functionality. (Full story here).

What to Do Now

For PrimePay HRIS clients, proactive planning is key:

• Review Contract Terms: Identify auto-renewal dates, termination clauses and service level agreements (SLAs) that may change post-merger.
• Explore Alternatives: Vendor-agnostic platforms like Rippling and Gusto offer modular HRIS solutions without PEO bundling, but migration timelines can take 6-12 months.
• Engage Brokers Early: Benefits consultants with HRIS expertise – like OutSail – can provide objective advice on compliance, costs and scalability.

For PEO shoppers, this merger means selecting partners with transparent roadmaps is key. Businesses that want flexibility should look for platforms with open API architectures or 3rd party integrations.

OutSail Can Help

The CoAdvantage-PrimePay merger could bring changes that impact businesses relying on PrimePay’s standalone HRIS. If you’re uncertain about how this shift might affect your HR technology, OutSail is here to help.

We help businesses find the best HRIS or PEO solutions for free. Whether you’re looking for a new HRIS or exploring PEO and ASO options, our experts provide clear, unbiased guidance to support your decision.

Don’t wait for changes to disrupt your business. Contact OutSail today for a free consultation!