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HR Outsourcing Companies

Understanding different HRO models & choosing the right fit.

Outsourcing Human Resources

Should you partner with an HR outsourcing company? Before deciding whether or not to outsource human resources, let’s first define the problem. Do any of these small business challenges sound familiar?

  • Are you frustrated with expensive health insurance options?

  • Did you get a huge renewal rate on your health care?

  • Do you have employee issues crop up that you don’t have answers to?

  • Are you working evenings or weekends doing routine HR tasks, like payroll, taxes, or compliance paperwork?

  • Are you ignoring HR issues and hoping they don’t turn into something costly?

  • Where do you turn for answers on HR issues?

  • What happens when your business grows?  Can you handle the hiring, employee lifecycle and compliance needs at scale?

Choices in HR Outsourcing Companies

If none of the above questions sound familiar, great!  You’re doing an excellent job of handling HR for your business.

However, if any of those points ring true, then it might be time to look for HR outsourcing options. So what are your choices? Here are a few to consider:

Status quo.  Keep doing what you’re doing!

Find an insurance broker.  The insurance broker can help if your concerns are only around health insurance rates.  He or she may be able to find better options to insure your employees.  That said, an insurance broker is not designed to help with HR, payroll or safety.  This means you’ll need to find support in another company for those issues or struggle with the broker's “add-on” HR services.

Find a payroll provider.  There are many good organizations that can serve your payroll needs.  And, while some offer services that include HR, that is not their core competency. You may get payroll processed and struggle with other needs.

Find a staffing agency.  Again, some organizations are built around recruiting, hiring and onboarding new employees.  And, while they may be very good at that, they don’t have the bandwidth to handle the full HR spectrum of skills.

Reach out to a PEO.  Professional employer organizations (PEOs) are exceptionally equipped to manage every aspect of your outsourced HR requirements. As comprehensive HR outsourcing companies, they offer a wide array of services including payroll processing, employee benefits administration, workers' comp and risk management. Tailored specifically to cater to the unique demands of small to mid-sized businesses, PEOs provide a holistic approach to HR outsourcing. To learn more about how PEOs can transform your HR operations, visit About PEOs.

Bill Senior Payroll Administrator Axcet HR
Beth Foulk Marketing Director Axcet HR Kansas City
Herman Payroll Administrator Axcet HR Kansas City

The pros and cons of outsourcing human resources.

Many small and medium businesses find their resources stretched thin, so they choose to double down on their strengths and outsource other tasks to outside experts. If you’re debating partnering with an HR outsourcing company, watch this video to learn the pros and cons.

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Outsourcing HR Frequently Asked Questions.

A few frequently asked questions – and answers – for those interested in learning more about partnering with an HR outsourcing company.

HR outsourcing is a contractual agreement between an employer and an external third-party provider whereby the employer transfers the management of, and responsibility for, certain HR functions to the external provider. Many types of HR outsourcing options are available to employers.

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HR outsourcing involves businesses utilizing the services of a third party to manage their HR functions, such as payroll, benefits administration, recruiting, training and compliance with labor laws. These HR outsourcing companies leverage their expertise and technology to streamline HR processes, reduce operational costs and allow client companies to focus on their core activities. 

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Below is a refined list of human resouces tasks that businesses typically entrust to HR outsourcing companies for small business:

  • High-volume recruiting, for efficiently handling large-scale hiring needs.
  • Temporary staffing, to swiftly adjust workforce levels in response to fluctuating demands.
  • Background checks and drug screening, ensuring candidates meet company standards and regulatory requirements.
  • Relocation services, supporting employees in transitioning to new locations smoothly.
  • Payroll processing, for accurate and timely compensation management.
  • Benefits administration, managing complex employee benefits programs effectively.
  • Coaching and development, offering personalized professional growth opportunities.
  • Development and maintenance of employee handbooks and policy manuals, ensuring up-to-date compliance with labor laws and organizational policies.

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By outsourcing, you are paying for what you need, not paying for what you don't need. Whether it is a contract that spells out what you are getting or an hourly rate, you will end up paying less for the service than someone you have to pay a salary too. You will also save on the cost of benefits and payroll taxes.

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Organizations that focus solely on providing HR services will have much more advanced technology and processes in place to provide those services. Outsourcing your HR functions to such an organization can help to streamline your HR processes, resulting in more effective and efficient HR management and administration.

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Pros and cons of HR outsourcing companies

Pros of using an HR outsourcing company:

  • Cost Efficiency: Outsourcing can reduce the need for an in-house HR department, cutting down on overhead costs.
  • Expertise Access: Provides access to specialized knowledge and expertise in HR management that might not be available internally.
  • Focus on Core Business: Allows businesses to concentrate on their core activities by offloading HR tasks to experts.
  • Scalability: Offers flexibility to scale HR services up or down based on business needs without the need to hire or lay off staff.
  • Compliance Management: Helps ensure compliance with ever-changing employment laws and regulations, reducing the risk of legal issues.
  • Technological Advantages: Access to the latest HR technology and systems without significant investment in software or training.
  • Improved Efficiency: Streamlines HR processes, such as payroll and benefits administration, making them more efficient and less prone to errors.

Cons of using an HR outsourcing company:

  • Reduced Human Touch: Outsourcing HR functions can lead to a less personalized interaction between employees and the HR team.
  • Loss of In-House Expertise: Relying on external providers for HR services might result in the diminished development of internal HR capabilities, limiting the company's flexibility in managing HR-related challenges.
  • Less Availability: External HR providers may not always be immediately accessible for urgent issues or in-depth consultations.

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Expertise You Can Use Now

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PEO/HRO – What's HR Outsourcing? What's a PEO? How to select a PEO.

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Understanding the Outsourcing Agreement

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Why Axcet?

PEO client onboarding meeting with Axcet HR Solutions in Kansas City

Let’s face it.  When it comes to HR administration, you have choices.  So, why choose Axcet?

We believe in trust, relationships and an undying commitment to our clients’ success.

At a time when you need peace of mind and a trusted advisor to help you make tough choices, our experience and expertise as a certified PEO can give you the confidence to focus on growing your business.

We believe that our HR support and expertise can help your business scale and grow in ways you couldn't have imagined. As a trusted advisor, we are dedicated to helping your company succeed and thrive.

Many HR outsourcing companies offer support, but we go above and beyond to ensure that your business has the resources and guidance it needs to reach its full potential by assigning you a dedicated HR consultant.

If we sound like a company you’d like to partner with, let’s talk.

Lacey Kansas City Human Resources Consultant at Axcet HR Solutions

HR Blues? Let's Talk.

Our veteran team of SHRM-certified human resources consultants and our access to employment law attorneys provide your business with unparalleled HR expertise. Add Axcet's HR team to your bench so you can get back to what matters. Reach out today.

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