Best for Remote Teams
Best for Small Businesses
Best for Benefits Administration
If you don’t have an HR department to manage your human resources processes, there’s a good chance you may need external support in the form of an HR outsourcing (HRO) service. An HRO can take on virtually any HR process to help your business stay compliant and boost efficiency.
There are many HROs out there, but not all will have the features and flexibility your company needs. To help you identify the right HRO provider for your business, I’ve researched numerous options, spending hours evaluating their upsides, features and challenges. I’ve identified five HRO platforms that may be excellent outsourcing partner options for your business.
What is an HR outsourcing (HRO) service?
An HR outsourcing service is a third-party organization that handles one or more HR functions for a business. HROs can accommodate the following tasks and more:
- Recruitment
- Benefits administration
- Payroll processing
- Tax administration
- HR policy creation
- Employee training and development
- Compliance assistance
- Administrative HR functions
- HR audits on organizations
- Ongoing HR support and guidance
An HRO service is similar to a professional employer organization (PEO). However, PEOs use a co-employment model, while HRO services act as an outsourced HR department that provides specific HR functions without sharing legal responsibility for employees.
Our Top Picks for 2024 | TriNet HRO  | Bambee HRO  | Paychex HRO | Insperity HRO | ADP HRO |
|---|---|---|---|---|---|
Best for | Industry expertise | Compliance assistance | Remote teams | Small businesses | Benefits administration |
Contract length | Annual | Annual and multi-year | Annual | Annual and multi-year | Month-to-month, annual, and multi-year |
Starting price | Varies based on customer’s needs | $99 per month | Varies based on customer’s needs | Varies based on customer’s needs | Varies based on customer’s needs |
Employee minimum | 5 | None | 1 | 5 | 5 |
Live chat support | Yes | Yes | Yes | No | No |
Rating |
TriNet HROBest for Industry Expertise
Pros & Cons
Our Review for TriNet HRO
I was impressed by TriNet’s extensive industry-specific expertise, which makes it a standout for businesses that need customized assistance. Unlike many competitors I researched, TriNet tailors its HR services to fit the unique needs of various industries, ensuring that business owners receive guidance that aligns with their sector’s specific challenges and regulatory requirements.
With TriNet’s Connect 360 support solution, businesses have 24/7 access to HR experts via web chat, allowing for real-time advice and solutions. This level of customization, paired with around-the-clock support, makes TriNet an ideal choice for businesses that are seeking specialized HR guidance to maintain legal compliance and optimize operations.
Bambee HROBest for Compliance Assistance
Pros & Cons
Our Review for Bambee HRO
Bambee is an excellent HR outsourcing solution for business owners who are seeking comprehensive compliance assistance. I was impressed that Bambee pairs each client with a dedicated HR manager who can help ensure the business adheres to federal, state and local labor laws. Many competitors don’t provide this standout feature, but it’s a crucial offering for many businesses that must minimize the risk of costly penalties and legal issues.
Bambee’s expertise in policy creation, employee relations and documentation ensures that businesses stay up to date with evolving regulations. With its user-friendly platform, Bambee makes compliance management easy, offering peace of mind for business owners who want to focus on growth while maintaining a compliant workforce.
Paychex HROBest for Remote Teams
Pros & Cons
Our Review for Paychex HRO
Paychex is an excellent HR outsourcing solution for businesses with remote or dispersed teams. It offers a full range of HR services, including payroll processing, tax administration, benefits management and employee training.
I particularly like that its cloud-based platform and mobile apps for iOS and Android allow employees to access essential HR tools from anywhere, making it especially valuable for remote teams. With self-service features, employees can easily manage tasks like updating personal information or viewing pay stubs. At the same time, employers can ensure compliance, handle HR reporting, and maintain seamless operations across all locations.
Insperity HROBest for Small Businesses
Pros & Cons
Our Review for Insperity HRO
Insperity is an excellent HR outsourcing solution for small businesses that are looking to streamline their operations and stay compliant with ever-evolving regulations. It provides comprehensive HR support, including HR audits, to help small businesses mitigate legal risks.
I was impressed that Insperity empowers teams with access to a wide range of online courses and educational materials. While this isn’t offered by all competitors, I like that it allows employees to enhance their skills and stay current on essential topics like workplace safety, harassment and employment law.
With dedicated customer support, Insperity ensures that small businesses have the guidance they need to navigate complex HR challenges efficiently.
ADP HROBest for Benefits Administration
Pros & Cons
Our Review for ADP HRO
ADP stands out as a top HR outsourcing solution, particularly in the area of benefits administration. Known for its ability to cater to businesses of all sizes, ADP provides a wide range of HR services. However, I found that its benefits administration capabilities truly shine.
The platform gives small- and mid-size businesses access to comprehensive, affordable benefits packages that rival those of much larger companies, helping them attract and retain top talent. Additionally, ADP’s user-friendly interface simplifies the benefits enrollment process, making it easy for employees to manage their benefits with minimal confusion.
HRO service costs
An HR outsourcing service costs between $50 and $1,500 per employee per month. While this may seem like a substantial range, monthly costs depend significantly on the features you need and how many employees you have. Some HROs charge a fixed per-employee-per-month rate, while others base monthly charges on a percentage of your employees’ salaries.
Here are some HRO pricing factors to keep in mind:
- Minimum requirements: Many HROs require businesses to have five to 10 employees in order to provide eligible services. If you have a smaller team, checking a potential provider’s minimum requirements is crucial.
- Bundled vs. a la carte services: Some HROs require you to bundle specific HR features, while others allow for a la carte service customization.
- Additional fees: Employee benefits are always an additional cost, whether you pay for bundled or a la carte services.
- Billing: HR outsourcing providers typically offer monthly and annual billing, although annual billing is usually less expensive.
How to choose an HRO
An HR outsourcing company can significantly improve organizational efficiency. However, finding the right HRO for your unique business needs is critical. Take the following steps to ensure you partner with the best HRO for your organization.
- Determine what HR services must be outsourced. Take inventory of your current HR processes and identify any gaps or inefficiencies. This exercise will help you determine what HR processes are going well and what should be outsourced. If you plan to expand operations, you must also consider your future HR gaps and needs.
- Establish your HR priorities. Which HR services and features are critical, and which would simply be nice to have? For example, are your employees tech-savvy, or will you need a basic, intuitive platform that’s easy to implement? Is a specific price point a dealbreaker, or do you have a flexible budget? Only you will know what’s most important to your business, but defining your priorities before beginning your search is crucial.
- Gather a list of potential HR vendors. Research potential HRO vendors, like the ones listed on this page, to get a feel for your options. Each vendor has unique strengths and weaknesses, so you should be able to quickly tell which ones are valid contenders and which ones aren’t a good fit.
Conduct demos and intro calls. Once you’ve chosen a shortlist of top vendors, schedule demos and intro calls with them. During these calls, you should expect to get a firsthand look at the software and ask your questions. Inquire about pricing, contracts, service plans, add-on options, implementation, customer support and additional fees. - Compare and choose an HRO. The last step in this process is to compare your top choices based on the information you gathered in your research and demo calls. Compare factors like available HR services, implementation, pricing and contracts, tech usability, scalability and ongoing support. A clear winner should emerge.
Whether you’re choosing an HRO for the first time or looking to upgrade your current service, it’s critical to consult with key stakeholders, such as your HR professionals, about your decision.
Methodology
To find the best human resources outsourcing services available, I started by researching and analyzing dozens of potential HRO solutions. I discovered the key players through industry experience and market research, and then I did a deep dive into each HRO provider. I looked at company websites, competitor comparison pages, the Better Business Bureau (BBB), accreditation sites and customer reviews.
Through this research, I was able to examine and compare pricing, contract requirements, HR services and limitations, payroll processing capabilities, benefits administration, accreditations, compliance and customer support. I also participated in guided tours and product demos to gain firsthand experience with each platform’s functionality and ease of use.
HRO FAQs
Is outsourcing HR a good idea?
Yes. For many businesses, outsourcing some or all HR functions to a third party is a good idea. Partnering with an HRO often results in efficiencies and cost savings. However, outsourcing is not always the right choice for every business.
What are the disadvantages of HR outsourcing?
Outsourcing any service comes with inherent risks. When it comes to outsourcing HR, companies risk losing control over certain processes. They may also face communication challenges or security risks if they don’t partner with a reputable organization.
What functions should not be outsourced?
Although you can outsource nearly all HR functions, a few tasks are best suited for an internal employee. For example, outsourcing company culture-related functions is generally not recommended.
What is the biggest challenge to outsourcing HR?
The biggest challenge to outsourcing HR is ensuring that the outsourcing agency performs HR functions in a way that matches your company’s values.
What HR task is most likely to be outsourced?
Companies outsource many HR tasks. Popular outsourced services include recruitment, HR policy creation, administrative HR functions, payroll and benefits administration, compliance management and employee training.