What Types of HR Functions are Generally Outsourced?

Part of keeping human resources cost-effective is knowing when you will need outside help. Here are the types of HR functions that are generally outsourced.

Alarming, but true, 59% of businesses have reduced costs by using outsourcing?

If you're a business owner struggling to keep up with the many roles and demands of your company, outsourcing could be for you.

HR functions as a critical part of your business, so here is why you should consider outsourcing it.

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Main Types of HR

HR covers a wide range of services to you and your employees. The types of HR include but are not limited to:

  • Advertising vacancies
  • Managing the application process
  • Creating and managing training for your staff
  • Vacation and sickness management
  • Payroll services
  • Tax issues and reporting
  • Employee arbitration
  • Contracts
  • Terminations


Finding new staff can be a lengthy and time-consuming process. On average, a single vacancy can attract 250 resumes. In the current climate, it's not uncommon for even 1000 people to apply for a single position.

HR Solutions

That's a lot of resumes to read and sort through. Someone working in HR will take care of all of that for you.

Once applicants have been dwindled down to the most promising few, HR can organize and attend interviews too.

Once found, HR will manage the offer. When an applicant accepts a position, HR functions as a point of contact for them before they start. HR will also take care of any references and legal requirements such as proof of identity and right to work.


Training staff is important to keep them interested and motivated in their positions. Learning new skills will improve performance. It can allow employees' to apply for higher positions and take on more responsibility.

HR can take care of sourcing and organizing relevant training.


Payroll and tax reporting are extremely important to do and to get right. You don't want your staff or the IRS to be claiming foul play.

An HR service can take care of the monthly payroll and paperwork to ensure everything you need for your taxes in kept in order. If there are any issues, they will also be there to help resolve them.


HR will take care of contracts at the beginning of and throughout an employee's career at your company. Changes to the contract, job description, and pay rises can all be handled through HR.


Sometimes people do things wrong or get unhappy. Usually, the issue is easily resolved. But sometimes disciplinary action or even termination may be required.

HR can ensure this is handled professionally and sensitively, checking all the legal requirements are taken care of.

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Benefits of Outsourcing HR Functions

There are pros and cons to anything and outsourcing HR functions is no different. Here's how to know when and what to outsource and the benefits of outsourcing your HR.

Pros of outsourcing HR functions:

  • Saves money
  • Saves time
  • Can be inexpensive to do
  • Improves compliance
  • Improves response times
  • Access to skills you don't currently have
  • More focused in-house HR

Con's of outsourcing HR functions:

  • Giving over control
  • Loss of personalization
  • Possible information leaks

As you can see, the pros outweigh the cons but consider them all carefully before deciding if outsourcing is for you.

Generally Outsourced

These are the HR functions that are most popularly outsourced. Your type of company and HR goals may require some differences.

  • Recruitment (particularly for high volumes of positions or applications)
  • Background checks and referencing
  • Medical screenings
  • Creating and maintaining staff handbooks
  • Creating and maintaining policy documents
  • Creating and maintaining policy documents
  • Managing relocation
  • Payroll
  • Coaching and training
  • Benefits and compensation administration
  • Redundancy processes
  • Action plan creation
  • Sexual harassment training
  • Health and safety training and assessments
  • Contractor or freelance compliance

Generally Kept in House

These are things that are often best left in-house. Personal relationships and development are usually dependant on you knowing your employee.

  • Employee relations
  • Performance management
  • Talent development and promotions
  • Strategic planning
  • Overall HR strategy
  • Overall HR management
  • Overall organizational management or restructure
  • Some recruiting

When to Outsource

Whether your managing HR on your own or have a team to do it for you, you can consider outsourcing. See how our service can help on our how it works page.

Make a list of responsibilities and tasks which need to be done. Be really honest about you or your employees' competency to carry out each of those tasks.

Then consider how long it takes to complete all of those tasks and if the time would be better spent on other things. Outsourcing a task is often cheaper than hiring a full-time employee. Especially if it's something that doesn't require attention every single day.

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Top HR Companies

With so many outsourcing services available it's tough to know which one to give your HR functions over to. Here are some top picks to choose from.

Paychex Flex

A full offering of all HR services and no need for long term contracts. They offer onsite services and have resources and training in HR available on their website. If you're a small business they also have special offers for companies with less than 50 employees.

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Offering almost every service, Insperity will customize a package to suit your needs. There is an employee portal for staff to access pay and benefits information which is even available as an app for your cell phone.

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TriNet offers specialized services for your specific industry. For example, healthcare, architecture, nonprofit, and consulting to name a few. They also have a live chat function.

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Find HR Outsourcing Solutions

You should have a good idea of what you need or how to decide if outsourcing HR functions is right for you.

We provide a comparison of companies for all your business needs, including HR.

Contact us today to find out how we can help you.

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