By Gregg Kell, Founder and Editor, Spotlight On Startups
Two numbers define a decade of payroll outsourcing services
H2R-Solutions, LLC turns ten years old on October 8, 2026. Ask its founder which numbers matter after a decade of payroll outsourcing services and she names two. Ten, and two.
Karen Halladay, SPHR, SHRM-SCP, CCP, CTM, founded the Austin, Texas firm in October 2016. The first number is the anniversary. The second is a staffing rule she has never broken.
The first number: ten
Ms. Halladay is specific about what a decade represents.
The first number I would give them is 10. Ten years in business. And to me, that number means much more than simply saying we’ve been around for a decade.
She unpacks it in operational terms:
It means ten years of payroll deadlines that don’t move. Ten years of year end processing, tax filings, system conversions, acquisitions, terminations, corrections and those inevitable payroll emergencies that nobody planned for.
The claim survives outside scrutiny. Bureau of Labor Statistics data shows that 65.3 percent of private sector businesses close within their first decade. Professional and scientific services, the category this firm sits in, closes at an even higher rate near 65.7 percent. National figures put ten year survival at roughly 34.7 percent.
Ten years in this category is not a round number on a banner. It is the minority outcome.
What a decade of change looks like from inside payroll
The environment did not hold still while the firm was surviving it.
It means we’ve been through changes in technology, employment laws, tax regulations and the way people work. We’ve watched payroll move increasingly into the cloud.
She continues on what that did to client footprints:
We’ve seen companies transition from centralized offices to employees working across multiple states, and helped clients navigate increasingly sophisticated HCM systems.
That decade included nineteen state minimum wage increases in January 2026 alone, plus eight state income tax rate cuts and a Social Security wage base rise to 184,500 dollars. New state paid family and medical leave programs joined a roster already covering Connecticut, Massachusetts, Washington, Maine, New York, Illinois, Oregon, and the District of Columbia.
No two payrolls are the same
The lesson Karen Halladay names as uniquely time dependent is the one that resists automation.
We’ve also learned something that only comes with time: no two payrolls are really the same. Every company has its own compensation structures, policies, benefits, deductions, approval processes and exceptions.
She explains what experience actually buys:
Experience teaches you where problems are likely to occur, what questions to ask before processing payroll and, sometimes most importantly, when something simply doesn’t look right.
Error data explains why that judgment has value. Ernst and Young research found employers average roughly fifteen payroll corrections per pay period at about 291 dollars each. Paycom’s summary of that study puts the error rate on traditional, non reviewed payroll processes at close to 20 percent.
Knowledge that stays with the firm
Halladay draws a distinction that matters to any buyer evaluating payroll outsourcing services.
Ten years also means we’ve built institutional knowledge within H2R-Solutions. We’re not learning payroll at our clients’ expense.
She lists what that knowledge came from:
We’ve encountered unusual situations, worked through difficult conversions, cleaned up problems we inherited and helped companies establish processes designed to prevent those problems from happening again.
The alternative is expensive. SHRM benchmarks put average cost per hire near 4,700 dollars before lost productivity. Insignia Resources reports that HR professionals turn over at roughly 15 percent annually. A company keeping payroll knowledge in one internal seat is one resignation from starting over.
Why trust is the real unit of measure
Karen names what a client is actually handing over.
Payroll is one of the most sensitive responsibilities a company can hand to an outside partner. You’re dealing with people’s livelihoods, confidential employee information, tax obligations and significant amounts of company money.
Her summary of the first number is unsentimental:
So when I say 10, I’m not talking about how long we’ve had a website or a business license. I’m talking about ten years of showing up, meeting deadlines, and being accountable for one of the most critical functions in our clients’ businesses.
The second number: two
The second figure is a design decision, not a milestone.
With our Managed Payroll Services clients, our model is to have a primary Payroll Specialist with backup support. That’s intentional.
She states the reasoning without hedging:
People take vacations. People get sick. People change jobs. Payroll still has to happen. Our clients shouldn’t have to worry about who is available on payroll day.
Two named practitioners per Managed Payroll client is the structural answer to the problem that started the company in 2016. It also makes the continuity claim checkable rather than aspirational.
So those two numbers, 10 and 2, tell a lot of the H2R story. Ten years of experience behind you, and a team designed to keep you from depending on just one person.
What the next decade is built around
Asked what she is building toward, Halladay starts with staff rather than strategy.
First and foremost, I want H2R-Solutions to continue taking care of our employees and our clients. The success we’ve had over the past ten years is because of them.
She is explicit about the failure mode she intends to avoid:
There’s a temptation as service companies grow to automate everything, standardize everything, and move clients further away from the people actually doing the work. I don’t want H2R-Solutions to ever become that company.
Automation is still on the roadmap. The purpose assigned to it is not headcount reduction.
We absolutely want to embrace better technology and AI. We want to automate repetitive work and become more efficient. But the purpose of that technology should be to give our people more time to take care of our clients, not less.
The services the next ten years run on
Ms. Halladay names the current line up directly:
We’re also continuing to expand beyond traditional HR consulting. Managed Payroll, HCM implementation support, HR On Demand, recruiting, data extraction, and other specialized services allow us to support clients through many different stages.
Her stated goal is elasticity across a client’s lifecycle:
Ultimately, I want H2R-Solutions to be the company a business can grow with. You may need us for ten hours of HR support today. Tomorrow you may need us to manage payroll.
That range separates this category from both ends of the market. Self serve platforms such as Gusto and QuickBooks Payroll do not scale into HCM conversions. Professional employer organizations such as TriNet and Insperity do scale. They do it through a co employment relationship many owners decline. H2R-Solutions sits between them.
The anniversary framing
Karen sees obligation rather than celebration.
But growth for the sake of growth isn’t the goal. I want us to grow the right way, by taking care of our people and our clients, and never losing the level of service that built H2R-Solutions in the first place.
She closes on what she owes the next decade:
Our employees and our clients gave us our first ten years. My responsibility is to make sure we continue earning their trust for the next ten.
And on the sentence she wants still true in 2036:
And ten years from now, I still want the answer to be, “Call H2R. They’ll take care of it.”
The firm can be reached at 512 431 7919 or through the H2R-Solutions site.
Why a decade of clean payroll runs is invisible
A firm that has prevented ten years of problems has produced ten years of non events. Buyers researching payroll outsourcing services cannot see any of it.
The full series
This post concludes a four-part series marking the H2R-Solutions tenth anniversary. The earlier installments are what ten years of HR outsourcing for midsize companies taught Karen Halladay, how payroll compliance requirements changed between 2016 and 2026, and why clients stay with a payroll service company instead of a platform.
Earlier coverage includes why Karen Halladay built a payroll service company rather than a payroll technology company and why go live is where managed payroll services actually begin.
Frequently asked questions
How long has H2R-Solutions been in business?
Ten years as of October 8, 2026. Karen Halladay founded the Austin, Texas firm in October 2016. Bureau of Labor Statistics data indicates roughly one in three United States businesses reaches that mark.
What numbers should I ask a payroll outsourcing services provider for?
Years in operation and staffing depth per client. H2R-Solutions assigns a primary Payroll Specialist plus backup support to every Managed Payroll client. No client depends on one individual being available on payroll day.
What happens if my assigned payroll specialist is out on payroll day?
Backup support covers it. That two person structure is deliberate. Processes and pay calendar history stay with the firm rather than with one employee.
What services does H2R-Solutions offer in 2026?
Managed Payroll Services, Fractional HR Support, HRIS and HCM implementation support, document and data extraction, recruiting, and HR On Demand.
Is H2R-Solutions planning to replace its people with AI?
No. Halladay states that automation is meant to free staff time for client work rather than reduce the people doing it. She does not want the firm to move clients further from the people doing the work.
How is this different from a PEO?
A PEO such as TriNet or Insperity uses a co employment model. H2R-Solutions does not. The client remains the employer and buys payroll processing and HR expertise directly.
Who leads H2R-Solutions?
Karen Halladay, SPHR, SHRM-SCP, CCP, CTM, Founder and CEO, based in Austin, Texas. She works alongside a sister operation, Palm Payroll, LLC, under shared leadership.