HR outsourcing is the middle option between running everything yourself and handing the employment relationship to a co-employer. A provider takes the administration: the pay run and filings, the starter and leaver paperwork, the handbook, an advice line, usually a portal your staff log into. You stay the employer, you keep your own benefits, and you keep the employment risk. For most businesses between about ten and a hundred people that is the arrangement that fits, and it is the one least well served by comparison sites, because it sits between two things that are easier to name.
Where it sits between a bureau and a PEO
A payroll bureau is narrower: it runs the pay and the filings and stops. A professional employer organisation is wider and legally different: it co-employs, files under its own identification number and puts your staff on its benefits. HR outsourcing takes the administrative load of the second without the legal change, which is exactly why some buyers want it and others find it the worst of both. If what you want is cheaper group health, this is not the arrangement that delivers it. If what you want is the paperwork gone while you stay in charge, it is.
What a good scope looks like
Ask what is included rather than what is offered, because the difference is where the invoices come from. Payroll and filings; contracts and offer letters; onboarding and leaver processing; handbook drafting and updates; an advice line with a named responder and a stated response time; and a system of record your staff can use themselves. Anything described as available is a separate charge until somebody writes otherwise, and advice lines in particular vary from a real employment specialist to a script.
What it costs and who says so
Providers on the HR outsourcing side of this market publish prices less often than payroll platforms do and more often than PEOs, which is to say rarely. The record on this site shows which of the providers checked publish a rate at all. Where nobody publishes, the practical move is to price a published payroll platform at your headcount first, decide what the administration is worth to you above that number, and go into the conversation with both figures.
Questions people ask about hr outsourcing
What is the difference between HR outsourcing and a PEO?
A PEO co-employs your staff, files their employment taxes under its own identification number and puts them on its benefits and workers' compensation. HR outsourcing leaves you the sole employer and takes the administration only. The PEO route is the one that changes your legal position and your benefits buying power.
How much does HR outsourcing cost?
It is usually a monthly fee plus a per-employee charge, but most providers in this market publish no rate. The providers on this site that do publish one are shown with the figure quoted from their own page and the date it was read.
Can I outsource HR and keep my own health plan?
Yes. That is one of the main practical differences from a PEO: because you remain the sole employer, your existing benefits are unaffected unless you choose to change them.