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The Best HR Outsourcing Services of 2023

By
Skye Schooley
,
business.com Staff
| Updated
Jan 25, 2023

Human resource outsourcing services can simplify your human resource responsibilities. Learn about the best HROs available for your small business.

Best for Compliance Assistance
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HR compliance support
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HR policy creation
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Employee termination assistance
Best for Performance Management
BambooHR Human Resource Outsourcing
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Onboarding and offboarding tasks
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Individual employee profiles
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Employee surveys
Best for Remote Teams
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Scalable HR outsourcing plans
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No minimum requirements
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Advanced help center
Best for SMBs
Insperity HRO
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Full-service HR outsourcing
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Employee self-service platform
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Dedicated support team
Best Benefits Administrator
ADP
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Employee self-service
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ACA & COBRA compliance
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Competitive carriers
Human resource outsourcing services can simplify your human resource responsibilities. Learn about the best HROs available for your small business.

With limited resources, budget or know-how, it can be difficult for a small business to create and sustain a human resources department. As a solution, many businesses turn to experienced HR outsourcing services (also known as HROs) to help with responsibilities like recruiting, employee training and development, payroll and taxes, benefits administration, risk management and compliance, and general HR administrative tasks. To help you find the right HRO for your organization, we researched various agencies, looking at each one’s specific services, cost structure, contract requirements, employee minimums and standout features.

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How We Decided
Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.
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Considered
11
Researched
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Selected

Compare Our Best Picks

HR Outsourcing Service Overall Score Best For Employee minimum Pricing Contracts Service plans Employee training courses Integrations Mobile app Live chat Customer support
Insperity 9.5 SMBs 5 Rates customized per plan Annual and multiyear Multiple Virtual and onsite Yes iOS and Android No Phone, email, and a dedicated service team
TriNet 9.5 Customer Support 5 Rates customized per plan Varies based on customer needs Multiple Virtual Yes iOS and Android Yes Phone, email, live chat, contact form, Connect 360
Bambee 9.4 Compliance Assistance 0 Starting at $99 per month (plus setup fee) Month-to-month or annual 8 Virtual No None Yes Phone, email, live chat and a dedicated HR professional
ADP 9.3 Benefits Administration 1 Rates customized per plan Month-to-month to multiyear Multiple Virtual and onsite Yes (550+) iOS and Android No A strategice account manager; designated support representatives for items like payroll, benefits and HR
Paychex 9.3 Remote Teams 1 Rates customized per plan Annual Multiple Virtual Yes (200+) iOS and Android Yes Phone, live chat, and a dedicated HR professional
Gusto 9.2 Payroll 1 Starting at $40 per month, plus $6 per employee per month Month-to-month 4 plans with add-ons None Yes (155+) iOS and Android Yes Phone, email and live chat
BambooHR 9.1 Performance Management 1 Rates customized per plan Month-to-month 2 plans with add-ons None Yes (130+) iOS and Android Yes Phone, email and live chat
Zenefits 9.1 Startups 5 Starting at $8 per employee per month Month-to-month and annual 3 plans with add-ons Virtual Yes (40+) iOS and Android No Contact form; Advisory service add-on

Our Reviews

Bambee: Best for Compliance Assistance

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Bambee can conduct an HR audit on an organization and then help craft internal HR policies.
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Bambee offers more than 650 training courses with 24/7 online access.
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Bambee does not provide employee benefits administration.
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Bambee is an HR compliance solution that gives businesses access to outsourced HR experts. Operating a growing business can be tough, but with Bambee, you have access to a plethora of resources to help you stay compliant with HR laws and regulations. Bambee is ideal for small businesses that want assistance with HR policy creation, employee conflict resolution, federal and state compliance, and employee terminations.

 Editor’s score: 9.4/10

Managing effective business policies and keeping track of employment documents can be especially difficult for small businesses – even more so if your employees are scattered across various cities or states. Bambee can help you manage this and more. For instance, it can help create custom HR and document retention policies while maintaining compliant staff folders.

Bambee offers employee training solutions with more than 650 courses to choose from, including ones in leadership and management training. These courses, available 24/7, can help you not only grow your employees’ skills, but also maintain compliance with federal and state laws (e.g., workplace safety, OSHA and harassment training).

Read Bambee Review

BambooHR Human Resource Outsourcing: Best for Performance Management

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You can run customized reports with BambooHR.
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BambooHR offers employee satisfaction and employee well-being surveys.
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BambooHR does not list its pricing online, and some users say it can be expensive.

BambooHR offers a variety of useful HR functions, although we especially like its assistance with employee performance management. You can choose BambooHR’s Essentials or Advantage plan, and then customize it with add-ons like payroll processing, time tracking, and performance management tools to fit your specific needs. Every plan comes with crucial employee management tools like employee record management, time off management, employee self-service, and reporting and analytics. The Advantage plan takes those features a step further with an applicant tracking system, training tracking, customizable reports, and employee well-being surveys.

Editor’s score: 9.1/10

To maximize BambooHR’s performance management capabilities, you can opt for an add-on option that grants users access to a wealth of management tools and services such as employee assessments, manager feedback forms, 360-degree feedback capabilities, performance reports, and automated reminders. You can also create employee goals and monitor them throughout the employee lifecycle. To help you maintain legal compliance, BambooHR has features like audit trails, workflows and approvals, and reporting. It integrates with several third-party applications, including learning management systems, engagement and culture systems, and HR training courses.

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Paychex HRO: Best for Remote Teams

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Paychex proactively monitors employment laws and regulations to help you stay compliant.
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It offers tailored, contextual learning opportunities in its Help Center.
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Paychex does not list its HR outsourcing prices online.
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When you partner with Paychex, you and your team gain access to an easy-to-use dashboard and intuitive mobile app, which is especially convenient for anyone managing a remote workforce. Self-service features allow your employees to manage some HR functions on their own, giving them control over their important payment, benefits and employment details as needed. If your small business currently uses other software platforms, Paychex can likely connect with them seamlessly, as it offers nearly 200 third-party application integrations. With its flexibility and quality of services, Paychex earns our pick as the best HRO for remote teams.

 Editor’s score: 9.3/10

If you need to outsource an HR function for your remote workforce, Paychex can likely handle it. The company provides comprehensive services to small and midsize businesses, including a variety of essential HR functions like remote recruiting and onboarding, time and attendance tracking, benefits administration, and employee training. Paychex can also act as your payroll provider and payroll tax administrator – perfect for small businesses that want to manage all remote employee salaries and payment details from one platform.  If you want to simplify payroll even further, you can take advantage of Paychex Voice Assist, an AI feature that enables voice-activated payroll functions. With its compensation summary report, employees can view their total compensation from one location, which is ideal for employee retention.

Read Paychex HRO Review

Insperity HRO: Best HRO for SMBs

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Businesses with up to 5,000 employees can partner with Insperity, so it can easily scale with your SMB as you grow.
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Employees can access a 24/7 self-service portal.
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Insperity requires a five-employee minimum.

Whether you have five employees or 5,000, Insperity has HR outsourcing solutions to fit your needs. For example, Insperity can help you process payroll, administer payroll tax filings, track employee time and attendance, and administer competitive employee benefits at affordable rates. We know that routine administrative HR tasks can be time-consuming for small business owners who wear many hats. Insperity can save you time by managing them for you, with features like paperless onboarding, access to more than 50 built-in HR reports, and the ability to build your own custom reports.

Editor’s score: 9.5/10

Another great way Insperity streamlines your HR processes is by offering employee self-service capabilities. This gives employees the flexibility to manage their own HR information. They can also access more than 5,000 self-paced training courses, more than 30,000 online books, and liability management training. This is ideal for small business owners who want to ensure employee satisfaction and development with their organization.

Insperity can help your company stay compliant in areas like risk management assistance, HR-related government reporting, and audits. It can also help you develop employee handbooks, write accurate job descriptions, and establish and manage employee recognition programs. Since plans can be customized, you’re sure to find an HR solution to meet your evolving needs. It’s for all of this, and more, that Insperity is our choice as the best HRO for small and midsize businesses.

Read Insperity HRO Review

ADP: HRO service With the Best Benefits Administrator

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ADP is a national company that has major bargaining power with healthcare companies.
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It offers intuitive and simple dashboards where you can view and modify your benefits.
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ADP does not list its HRO pricing online, so contact a representative for a quote.

As a major HR service provider in the U.S., ADP provides robust benefits options. When you’re an ADP client, you’ll be tapping into a national provider that has significant bargaining power with insurance and benefits providers. This ensures you can offer affordable benefits like medical insurance, workers’ compensation, retirement savings plans, student loan repayment programs, flexible working arrangements, family leave, and professional development opportunities to your employees. The size and power behind ADP’s offerings makes it our pick as the best HRO for benefits administration.

Editor’s score: 9.3/10

ADP’s API-driven technology automatically syncs data between its platform and benefit carriers, increasing administration speed and accuracy. It features the ability to configure benefits plans in real time, giving employees instant visibility if there are any updates or changes.

Since ADP can also provide payroll and tax administration, you can easily manage employee payroll and benefits on the same platform. ADP’s risk and compliance experts can walk you through the federal, state, and local guidelines to help you avoid benefits administration or HR management mistakes. This level of HR support is key to successful administration of employee benefits.

Read ADP Review

TriNet HRO: HR Outsourcing Service With the Best Customer Support

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You can contact TriNet customer support by phone, email, live chat or online contact form.
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TriNet offers industry-specialized HR services.
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To use TriNet's services, you must have at least five employees.

TriNet is a full-service HR solution for small and midsize businesses. It offers specialized support in numerous industries, such as engineering, consulting, education, e-commerce, financial services,manufacturing, marketing and advertising, nonprofits, retail, and technology. Businesses partner with TriNet for many HR services, such as payroll processing and tax administration, expense management, time and attendance tracking, employee benefits administration, risk management, workforce analytics, and compensation management. What separates TriNet from some of its competitors is its customer support. Its team of skilled HR experts can facilitate compliant and efficient HR processes for your business.

Editor’s score: 9.5/10

Unlike many of its competitors, TriNet makes its customer support available 24/7. The ability to reach an HR expert at any time can be a game-changer, especially for businesses with nonstandard hours. With various ways for you to reach its support agents (phone, mobile text, instant message, email or contact form), TriNet has mastered being truly available to its customers. To further expand its HR support, TriNet offers an online knowledge center that allows businesses to seek support on their own. Its library of expertise aids in the flexibility and brevity of its support options.

Read TriNet HRO Review

Zenefits: Best HRO for Startups

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Zenefits has a training portal with multiple resources to educate administrators, managers and employees on its platform.
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You can partner with one of Zenefits' benefits brokers or use your own.
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Zenefits' customer support can be slow to respond.

Zenefits can support a variety of businesses, but its HR services and transparency make it ideal for startups. It offers transparent pricing online and scalable plan options. Each plan includes core HR services like automated onboarding, document management, employee scheduling and time tracking. You can set compliance alerts and triggers, view various reports, access mobile apps for iOS and Android devices, and integrate the software with a variety of third-party applications. With Zenefits People Analytics, powered by Visier, startups have access to valuable workforce metrics that can help them make informed business decisions.

Editor’s score: 9.1/10

Some plans include compensation management features, which can be helpful for startups that need guidance on how much to pay each new hire. Zenefits also offers performance management tools, which can help ensure your team members are growing successfully in their roles. If you want to build a company culture that focuses on employee well-being, you can use the platform’s employee engagement surveys and prebuilt wellness assessments.

Whichever plan you choose, you can add features like recruiting, payroll processing, benefits administration and advisory services for an extra cost. In other words, you can start small when you’re a new business and then add on services as your organizational HR needs grow.

Read Zenefits Review

Gusto HR Software Review: Best for Payroll

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Gusto has multiple plans and add-ons that can serve employees and contractors.
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Users can run payroll and file payroll taxes across multiple states.
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Gusto offers limited performance management tools.

Gusto is a full-service HR platform that offers comprehensive HR tools and services like hiring and onboarding, employee benefits administration, HR insights and reporting, talent management, and HR guidance and support. However, where Gusto excels above the rest is its payroll functionality. Employers can access full-service payroll for multiple states, multiple pay rates and schedules, and even international contractor payments. Gusto can register you for state payroll taxes, as well as automatically file and pay federal, state and local payroll taxes on your behalf. You can set up Gusto to automatically run your payroll each pay period.

Editor’s score: 9.2/10

Since Gusto is a full-service HR solution, you can access time tracking and project tracking features that automatically integrate into the payroll solution for seamless payments. Employees can submit and approve time off requests, and when they do, your time-off calendar syncs with the payroll functionality. If employees submit business expenses through the platform, approved expenses auto-sync with payroll for reimbursement. When all this data is synced within one central platform, it reduces payroll errors and ensures your workers get paid properly and on time. For all of these features and more, Gusto is our choice as the best HR outsourcing solution for payroll.

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Pricing and Terms

Since the services offered in an HR outsourcing plan can vary widely, so does the cost. The total cost of your HRO will depend largely on how many employees you have, which HR services you need, and how long of a contract you are willing to sign. HRO plans run the gamut, costing anywhere from $50 to $1,500 per employee per month.

HR outsourcing services typically follow one of two pricing models:

  • A fixed monthly per-employee fee
  • A percentage of each employee’s monthly pretax salary

HROs sometimes have employee or payroll minimums you must meet before you can access their services. Since HR outsourcing is better for midsize and large companies anyway, this is typically not an issue. If you are a very small business seeking HR assistance, a professional employer organization (PEO) service may be a better fit for you.

HRO pricing can be flexible, depending on your provider. Although you’ll likely have to sign a contract, some agencies offer flexibility in the contract’s length. Some HROs offer a la carte options (which are best for those who only need a few select services) or preset bundles (which are best for those who want a more comprehensive set of services). Many HRO companies charge extra for services like employee benefits, recruiting and staffing, and performance management. Some providers also charge a one-time setup fee.

Bottom LineBottom Line: HRO plans cost between $50 and $1,500 per employee per month, depending mainly on the size of your business and the services you need.

Buying Guide

What Do HR Departments Do?

Over the years, the role of human resources professionals has evolved from simple recordkeeping to becoming an essential component of a business’s executive team. Besides coordinating employee activities, HR departments provide conflict resolution and training, help manage budgets, and ensure companies comply with employment laws and regulations. If you don’t have an internal team to handle these responsibilities, partner with an HR outsourcing company to meet your needs.

Benefits of HR Outsourcing

There are several benefits to partnering with an HRO company for both employers and employees, depending on the services your business needs.

1. It saves time and money.

Hiring an HRO service to take care of your HR processes can save your business time and money. Instead of wasting hours performing administrative tasks manually, you can streamline your efforts by outsourcing certain tasks. That means you can reclaim your valuable time to perform revenue-generating functions that will improve your business.

Did you know?Did you know? Hiring an internal HR staff can cost 50% more than outsourcing your HR functions, according to Asure Software.

 2. It helps you maintain legal compliance.

Federal, state and local employment laws are constantly changing. As a result, legal compliance has become difficult for many organizations to manage on their own, especially with the recent trend of hiring remote employees located around the state or country. Hiring an HRO to keep you compliant is often easier than trying to stay up to date with a myriad of evolving laws.

Your HRO can help maintain the security and privacy of your employee data, including compensation and personal matters. It can also ensure your company’s compliance with federal, state and local regulations surrounding employee benefits (e.g., healthcare, 401(k) retirement plans and time off policies), harassment and discrimination, workplace safety measures, workers’ compensation, payroll processing and taxation, HR policies, employee discipline and termination, and the Consolidated Omnibus Budget Reconciliation Act (COBRA).

3. It streamlines hiring and onboarding employees.

Effectively recruitment and onboarding can make a big difference in your business’s success. An HRO can streamline your recruiting, hiring and onboarding processes to ensure you hire the best members for your team. HROs help you not only acquire the right employees, but also onboard them in a way that complies with labor and employment laws. For example, your HRO can help you distribute the necessary new-hire documents, obtain the required signatures, and file the documents securely.

If your company hires immigrants, you can benefit from an HR outsourcing service that is well-versed in international employment laws and has experience with the foreign worker hiring process. Immigration compliance at both the state and federal levels is a complicated process that your own HR staff may not have expertise in. HROs help protect your company and immigrant workers from unintended and potentially costly violations of immigration law.

4. It provides expert HR insight and support.

Managing every HR task for your team is a big feat, even in a small business. Without an entire department to manage and track your HR needs, there is a good chance you will need to hire a service like an HRO to help you. Even if you have an internal HR manager, they can benefit from the helping hand and additional expertise. An HRO can help you meet all your company’s human resources needs, even if you’re on a tight budget.

5. It is a scalable HR solution.

Although some HROs offer bundled plans, others allow you to create unique service plans with a la carte HR features. This flexibility is convenient for any business, but especially for growing organizations that need their HR support to expand as they scale up. Instead of being limited by your HR capabilities, you can add and remove HR services as soon as they apply (or don’t apply) to your organization.

Which HR Functions Can Be Outsourced?

Just about any HR function can be outsourced. You can outsource a couple of HR functions at a time, or all your HR needs together.

Here are some commonly outsourced HR functions:

  • Applicant tracking
  • Background check services
  • COBRA insurance
  • Compensation plan development
  • Employee benefits administration
  • Employee discipline
  • Employee handbook creation
  • Employee recruitment
  • Employee termination assistance
  • Employee training and development
  • HR administrative tasks
  • HR audits and consulting
  • HR policy development and implementation
  • New-hire reporting
  • Payroll
  • Retirement services
  • Risk management and regulatory compliance
  • Tax administration and compliance
  • Time and attendance
  • Unemployment insurance and claims administration
  • Workers’ compensation
  • Workplace safety training

Although these are the most commonly outsourced HR services, this is not a complete list of HR functions that can be outsourced. Speak with an HRO representative if you have questions about outsourcing additional HR functions.

Which One Is Right for Me: Full-Service or Partial HR Outsourcing?

When selecting an HR outsourcing provider, assess the HR services you need assistance with – maybe you need to outsource all of them, or just a few. Many HROs allow you to choose either a full-service package or the specific services your business needs.

TipTip: Regardless of how many HR services you need to outsource, the HRO you choose should have expertise in your state’s employment compliance to insulate your company from penalties or lawsuits.

Full-Service HR Outsourcing

A full-service HRO is a good option if you own a small company and cannot yet afford to hire HR personnel. It provides the resources that an in-house HR staff could without the expense of hiring your own team. A full-service HRO is also advantageous if you have workers in different parts of the U.S. or the world. HROs are knowledgeable about global, federal and state employment laws, so they will ensure your company complies with the local regulations anywhere you have employees.

When companies skimp on HR, they put the business and their employees at risk. A full-service HRO helps you appropriately manage day-to-day HR tasks like reporting misconduct and ensuring workplace safety compliance. These services also work closely with your payroll team to handle compensation. In addition to day-to-day tasks, you can enroll in services like recruiting and employee training.

Partial HR Outsourcing

Partial outsourcing is recommended for companies that have an in-house HR staff but need extra help. For example, perhaps you have an HR representative who handles your recruiting strategy and ensures the correct filing of your employment paperwork, but you need help with employee development. If you do not have the resources or desire to hire a full-time training specialist, you can outsource this service to an HR company, many of which offer employee training and development programs.

The most common skill development training that HROs provide is software and processes training, though other options are available. The best HR outsourcing services will work with you one on one to determine the best training programs for your employees.

Other common partial outsourcing services are payroll processing, employee screenings and background checks, employee recruitment, and immigration compliance.

Human Resource Outsourcing vs. Professional Employer Organizations

During your research on HR outsourcing, you may also see references to professional employer organizations, or PEOs. While many of the companies we reviewed offer both HR outsourcing and PEO services, they are not the same thing.

The main difference between an HRO and a PEO service is the legal employment arrangement they operate under. When you outsource your HR functions, you are still the employer of record for your staff members, and you retain full control of your business operations and data. With a PEO, the company you hire acts as a co-employer and is responsible for all your business’s HR tasks, including hiring and firing, employee training, and tax and compliance obligations.

Which Option Is Best for My Business?

Whether you should use an HRO or a PEO depends on your business’s needs. If you need help with a few basic administrative tasks, like payroll and benefits management, an HRO might be your best option. If you’d rather have an expert company shoulder the full legal and financial responsibilities of employing your staff members, hire a PEO.

If you are interested in learning more about PEOs and the companies we recommend, check out our selection of the best PEO service providers.

TipTip: If you need to partner with a PEO right now but think you’ll want to switch to HR outsourcing later, or vice versa, consider a company that offers both.

HR Outsourcing FAQs

Does HR outsourcing save money?

Yes, outsourcing your HR functions is one of the best ways to maintain legal compliance while saving money. Instead of paying salaries for an in-house HR department, you can limit your team to one HR manager and outsource any functions they need assistance with. Many HRO companies can bundle your HR functions to save you even more money. Additionally, outsourcing functions like risk and compliance management can help your company stay on top of current regulations, potentially saving you thousands in legal fees.

When should you outsource HR?

Unless you have an entire in-house HR department, you will likely need to outsource at least some of your HR responsibilities as soon as you start your business. A company’s HR needs are greater than one professional can manage alone, and having no HR at all puts you at risk of serious legal ramifications. The specific functions you outsource – and when you should do so – will completely depend on your needs. For example, if you are hiring your first employees, you may want to outsource your employee benefits administration. You should outsource HR functions as soon as you need them, especially if you don’t have an in-house person to do the job.

What are the disadvantages of HR outsourcing?

Although it has many advantages, HR outsourcing can have a few drawbacks as well. For example, an external company managing your human resources can cause a disconnect with your staff. An external organization will not be an expert on your company culture, and it likely won’t focus on team building and personal development as much as an in-house HR expert could.

Outsourced HR is also less flexible than in-house HR staff. An external HR company or software provider is less likely to make special arrangements when a loyal employee has a unique request, for instance. An HRO may also take longer than an in-house HR department would to settle employee disputes or hire new recruits.

Outsourcing any business process always comes with a security risk. Most HRO companies use web-based PEO software, leaving your business’s information – and that of your employees – potentially vulnerable to security threats. Always check an HRO’s security measures before hiring it, especially if your business is in a highly regulated industry.

What business needs are met by outsourcing HR services?

HR outsourcing services can meet all your human resources needs. Whether you want to recruit and train new employees, administer employee benefits, track time and attendance, process payroll and tax filings, or do all of the above with one platform, an HR outsourcing company can help. An HRO can ensure you meet legal requirements as well. As federal, state, local and industry regulations are constantly changing, it can be hard to stay up to date, so find an HRO company that is experienced in your region and industry to maintain legal compliance.

You could also outsource tedious administrative HR tasks, which gives your in-house representatives more time to focus on recruiting the right employees and fostering team growth and development.

What to Expect in 2023

As workplace trends change throughout 2023, we expect the demand for human resources outsourcing to keep growing. There are several factors that play into this, such as the hybrid work environment, younger generations taking over the workforce, the increase in AI and automation, employee health and development, and the increasingly complicated need to comply with state and federal regulations. In-house HR staff may have difficulty staying up to date with changing trends and regulations, and HR missteps can have expensive consequences for small businesses. As a result, many organizations rely on HROs to closely monitor shifting employment laws and workplace trends.

The popularity of the hybrid workplace is a trend that significantly affected the HRO industry and will continue to do so throughout 2023. With many businesses permanently settling on hybrid work arrangements, the need for cloud-based payroll and time-tracking tools has risen. Employees and employers need the ability to access their HR information from any location. We expect HRO companies to increase their offerings of flexible, cloud-based solutions and self-service features.

As younger generations take over the workforce, HROs must evolve to meet their needs. For example, younger generations place a high importance on collaboration and recognition. HROs must manage HR to make employees feel seen and appreciated. Additionally, younger generations place great importance on health, wellness and professional development. We anticipate HROs will tailor their benefits packages to satisfy these needs as well.

Artificial intelligence in human resources technology is also influencing the growth of HROs. For example, AI can scan hundreds of resumes to find candidates who have the required experience for a role, saving hiring managers hours of sifting through resumes.

We expect to see HROs helping with important business diversity and inclusion initiatives throughout 2023 by offering recruiting assistance, risk management and compliance measures, and employee training and development. Small businesses can lean on outsourced services like applicant tracking, HR policy development, audits, and consultation to create diverse and inclusive workplaces. We believe there will be an increased demand for data analytics to track and improve employee productivity.

Skye Schooley
Skye Schooley
business.com Staff
business.comb.
Skye Schooley is a human resources writer at business.com and Business News Daily, where she has researched and written more than 300 articles on HR-focused topics including human resources operations, management leadership, and HR technology. In addition to researching and analyzing products and services that help business owners run a smoother human resources department, such as HR software, PEOs, HROs, employee monitoring software and time and attendance systems, Skye investigates and writes on topics aimed at building better professional culture, like protecting employee privacy, managing human capital, improving communication, and fostering workplace diversity and culture.
Image Credit: fizkes / Getty Images
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