From payroll to benefits, not all small businesses handle every aspect of a traditional human resources department. In fact, HR outsourcing is becoming increasingly popular, especially with the growth of remote work arrangements happening as a result of COVID. The global HR outsourcing market is expected to reach $45.8 billion by 2027
, with many companies looking to hand off one or more tasks associated with human resources.
Which HR outsourcing services are best? The answer depends on the unique needs of your business. We’ve created a list of the companies that come recommended by other SMBs, along with the reasons they stand out in the industry.
We’ll start with an overview of what HR outsourcing is and why you may want to consider it.
What is human resources outsourcing?
Human resources outsourcing consists of any aspect of business typically handled by an internal HR department that is, instead, handed off to an outside company or service. Some companies may give all of their duties to an outside firm, while others just delegate the ones that are the most time-consuming. There are also others who rely on third parties to handle highly regulated tasks, such as payroll processing and tax withholding.
Additional tasks may include:
- Benefits administration, including COBRA
- Compensation and promotional plan development
- Creating and updating job descriptions
- Diversity, harassment, safety, and best practices training
- Employee discipline, terminations, and retirement
- Employee handbook creation
- Job advertising, interviewing, applicant tracking, and hiring
- Onboarding and training
- Record-keeping and personnel records
- Tax compliance
Why small businesses outsource HR services
Business leaders may be reluctant to outsource their HR tasks, because it requires a lot of trust in a third-party company to keep employee data safe. There’s also a concern that you’ll lose touch with some of the aspects of your business. However, HR outsourcing can provide a number of benefits for the cost.
1. HR outsourcing allows businesses to focus on core competencies
Instead of trying to research and comply with every new law or code, you can keep doing what you do best – making and selling your products or services.
2. HR outsourcing allows HR teams to share expertise
You know your employees and the culture of your company very well, but an outside HR staff can give you additional insights you can’t find when you’re so close to your teams. They get paid to stay on top of trends and can alert you to the newest technology, too.
3. HR outsourcing scales easily during high growth periods
If you suddenly need additional employees during your holiday season or find yourself struggling to comply with new tax regulations, you can catch up with the help of HR outsourcing services that adapt to meet your needs.
4. HR outsourcing can simplify your existing processes
It’s not uncommon for small businesses to have several people with their hands in the HR funnel, which can result in inconsistencies and inefficiencies. HR companies know how to tie together existing administration functions to keep everyone on the same page and compliant.
The best small business HR outsourcing options
While your mileage will vary depending on how much help you need, these companies offer a mix of experienced HR professionals and efficiency-driven tech tools.
You may know Paychex
as a leading payroll services provider, but the company has expanded to cover just about every HR function you could need. The innovative mobile app puts more data at your fingertips, and Paychex ensures you can see reporting and data analytics to see how well you’re doing in areas like hiring and onboarding. Employees can learn how to use its self-service features, too.
Pricing is based on a per-employee cost, but it is typically affordable enough even for startups with limited budgets.
Notable for its employee benefits administration features, ADP
is frequently the pick for companies of all sizes that need access to more health and life insurance options. Its dashboard is easy to use and helps your team access current records, make changes, and see what’s new. Benefits are just one part of the offering, however.
You can choose to access everything ADP offers with a full-service contract or pick and choose what you need most. From performance management to COBRA to recruitment, ADP is a full-service company that lets you buy just what you need, then scale as you go.
Are you looking for one of the most established HR options around? Insperity
may be your best pick. While it does offer services for small businesses, it shines in providing mid to large companies with everything they need to scout, hire, onboard, and manage the brightest employees.
Insperity has a 35-year track record and offices all over the U.S. In addition to the innovative full-service HR tools, you also get access to a slate of qualified HR experts including a payroll specialist and a safety consultant.
Imagine receiving access to an HR professional and all their expertise for just $99 per month. That’s what Bambee
promises with its HR tools platform aimed at small businesses. For a low monthly fee, companies work with an HR professional to answer questions, select templates for the most common HR forms and handbooks, and access its dashboard to keep everything organized.
Bambee even provides a way for employees to interact directly with your HR manager through a friendly chat app. This service is ideal for those who still want to retain control of their HR tasks but need professional guidance and a system to do it right.
This robust option is used by many big corporations worldwide and prides itself on using AI and machine learning to help you do more with less. You can use Workday’s
tools to manage compensation, time tracking, benefits, hiring, and performance reviews. Data and analytics guide your management team in making better decisions that help your people and cut costs at the same time. Mid-size to large businesses looking for human resource management may find Workday’s options particularly beneficial.
If you really love the idea of outsourcing HR functions, teaming up with a full-service company like Trinet
can help reduce your workload. It offers 24/7 support, a comprehensive dashboard, reporting, and access to benefits that go beyond just health and life insurance. For companies looking to attract and retain top talent, Trinet offers some useful perks like commuter benefits, dependent care, and even wireless plans. Risk mitigation, payroll, and all other perks are available for companies of five or more employees.
7. G&A Partners
A leading small business HR solutions provider, G&A Partners
has earned its reputation for being a full-fledged provider of payroll, employee management, benefits, and more. For more than two decades, G&A has helped businesses reduce risk and provide employees with an excellent workplace experience. It’s also well-known for its flexibility, and will tailor a package for where you are in your unique HR journey.
Other HR options to consider
These companies also rank high for their approach to managing employees. Consider them if you’re not sure that you need a full-service human resources small business solution just yet.
is a dashboard that connects all your day-to-day HR functions into one, slick platform. It also integrates with all your favorite tools, such as Asana, Zoom, and QuickBooks, while providing your internal HR teams with stats and data to make better decisions. Even better, you can use the free trial before you buy.
This software solution gives you a place to put all your employee information, then guides you through everything from hiring to firing. It includes the same software features as several stand-alone options, including an applicant tracking system, mobile hiring app, and legal document service. Bamboo
also comes with a free trial to see if it’s the right fit for you.
Designed for mid-sized businesses in all industries, Namely
’s software solutions focus on compliance, tracking, and employee experience, giving you more time for other things. Its enhanced services include fully-managed payroll and benefit administration for a hands-off experience and full HR support.
The bottom line
HR for small businesses can be overwhelming. The ebb and flow of the job market, as well as changes to remote work flexibility, requires companies to be at the top of their game in hiring and managing existing employees. If you find that your administrative tasks are too much to handle, outsourcing is nothing to fear.
Fortunately, the top companies offer a menu of online HR services that simplify your existing processes and may even replace outdated ones with those positioned for less risk.
If outsourcing your HR seems like too much right now, there are ways to get the help you need. It may be more appropriate to use a stand-alone software solution, for example, rather than a full-fledged external company. One of the best ways to find out is to give one of the above companies a call and see what they can do for you within your budget.
About the Author: Linsey Knerl is a contributing writer for HP Tech@Work. Linsey is a Midwest-based author, public speaker, and member of the ASJA. She has a passion for helping consumers and small business owners do more with their resources via the latest tech solutions.
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