Know your HR: Should you outsource your HR?

With the increasing pressures to cut costs, outsourcing your HR can be an arrangement to help handle your HR functions for your business.

Typically, businesses that face the following challenges are encouraged to outsource their HR:

  • Liability exposures and previous penalties due to HR lawsuits
  • Lack of in-house HR staff to manage HR infrastructure
  • Over focus of HR admin tasks over other business needs
  • Having many variations of compensation rates across a wide range of employees
  • Cost savings and budget constraints 

Recognising your businesses needs vs constraints is important in deciding whether you should outsource your HR. The next step is to decide what type of HR outsourcing your business requires. In summary, there are 2 main options:

  1. Professional Employer Organisation (PEO) 
  2. Human Resource Outsourcing (HRO)

The main difference between the 2 options is whether or not it utilises the co-employment model. For PEO, a co-employment model is used, which means to say that your employees will appear on the books of your PEO partner for legal and tax functions. Essentially, your PEO partner manages all employment matters with regards to the employee. For HRO, a co-employment model is not used, so your employees have a direct employment relationship with you and they remain in your company’s books. However, your HRO partner manages all the HR tasks for you. Depending on what you need help in, HRO offers flexibility by handling a certain HR task for you, like payroll processing.

If you think that your business will benefit from outsourcing your HR, click here to be redirected to our HR Outsourcing page to learn more about what services we offer and how to connect with us.

This article is written with referene from:

Freedman, M. (2020, September 23). Should You Outsource HR? Retrieved June 21, 2021, from Business News Daily website: