Human resources outsourcing services (HROs) have become a popular way for thousands of businesses to handle complex people issues rather than building and supporting an internal HR team. HR outsourcing services can help you save money while obtaining indispensable expertise and protection in the areas of labor laws, payroll, employee benefits, and recruiting.
Based on our research, a small business with 50 employees could save $87,500 per year by outsourcing with an HR company, rather than hiring and maintaining an in-house team.
To find the best HR outsourcing services, we reviewed dozens of companies while looking for a combination of adaptability and value. While each HR outsourcing service differs slightly in its approach, those that made the cut offer customized solutions and excellent customer service.
When choosing an HR outsourcing service, focus on:
- Expertise in compliance and regulations
- Quality of service
- Timely and accurate payroll processing
- Efficient benefits administration
- Reliable employee support
- Flexibility and scalability
- Cost-effectiveness
Best HR Outsourcing Services
| Company | Overview | Best for |
|---|---|---|
| ADP TotalSource | PEO solution offering a wide range of HR services, including payroll, compliance, employee benefits, and risk management | Businesses with 2 or more employees seeking an all-in-one PEO solution with advanced analytics and compliance support |
| Bambee | Highly affordable HR guidance provided by a dedicated HR manager | Small businesses looking to develop and implement HR compliant policies |
| TriNet | Adaptable HRO solution with outstanding 24/7 client support | Businesses with at least five employees seeking industry-specific HR expertise |
| Axcet HR Solutions | IRS-Certified PEO with a knack for developing customized HRO solutions | Small to medium-sized businesses that wish to offload HR work to a team of skilled professionals |
| Insperity | HRO and PEO company with a comprehensive array of benefits, payroll, and recruiting services | Larger businesses looking to offer competitive benefits packages |
| Justworks | PEO with user-friendly HR software combined with affordable benefits services | Small businesses looking to provide their employees with seamless onboarding and generous employee benefits |
| ExtensisHR | Mobile-first HR platform that helps build HR processes from the ground up | Startups, small businesses, and remote teams looking to offset the workload of HR processes |
1. ADP TotalSource
ADP TotalSource is the nations largest Professional Employer Organization (PEO) and stood out in our research as the best HR outsourcing service. You probably know ADP for being a payroll service, however they’ve grown other service offerings to the point that payroll only accounts for 20% of their business.
The TotalSource PEO program is designed to support businesses with 2 or more employees in managing a wide array of human resources functions. As part of ADP, TotalSource provides a balanced approach that combines advanced technology with expert HR support.
ADP’s HR outsourcing service covers essential areas such as payroll processing, benefits administration, risk management, and regulatory compliance to ensure businesses stay on track with current employment standards. ADP TotalSource stands out by providing data-driven insights and real-time analytics through its technology platform, enabling more informed decision-making.
Clients have access to a dedicated team of HR professionals, ensuring personalized support and guidance. This is complemented by access to ADP’s vast array of resources and tools that enhance the management of employees from hiring to retirement. This balanced mix of technology and human expertise allows businesses to streamline their HR practices, improve employee engagement, and focus on achieving long-term goals.
ADP Features
- Recruitment and onboarding support
- Comprehensive payroll processing
- Employee benefits administration
- Tax filing and compliance management
- HR policy development and implementation
- Risk and safety management solutions
- Employee performance management tools
- Advanced analytics and reporting
- Time and attendance tracking system
- Expert HR advisory services
ADP Downsides
While businesses with as few as two employees can benefit from their HR solution, larger companies will get more value from ADP TotalSource. Additionally, pricing for ADP TotalSource is custom quoted based on specific needs and scale, which might not align with smaller budgets.
One other downside is that as a PEO, ADP TotalSource pricing is primarily based on the cost of workman’s comp coverage. This means that if your business operates in a high-risk industry then the cost of TotalSource could outweigh the benefits. In that case, you’re probably better off going with an HR outsourcing service rather than a professional employer organization.
ADP Value
ADP TotalSource delivers a scalable, comprehensive HR solution that combines the strength of industry-leading resources with customized support. This makes it highly suitable for businesses seeking to outsource all of their HR functions.
The core value of ADP TotalSource lies in its ability to handle complex HR tasks—such as payroll management, regulatory compliance, and employee benefits. By leveraging ADP’s advanced technology platform, businesses can access real-time analytics and insights, empowering more informed decision-making.
Many HR outsourcing services lock clients into lengthy 1 or 2 year contracts, limiting flexibility. ADP stands out by only requiring a 30-day notice for cancellations.
2. Bambee
If you’re looking for a simple way to build and implement HR policies in your business, Bambee is an excellent choice. Their HR Autopilot package starts at only $99 per month, and it provides you with all the tools and expertise you need to create effective workplace policies.
With Bambee, you’ll be matched with a dedicated HR manager who will assess your company and identify any existing HR gaps, policies, or operating issues that endanger your company or its employees. From there, your Bambee manager will collaborate with your team to draft customized policies that both enhance talent management and protect your organization.
As an optional add-on, Bambee clients can also opt for payroll services. While not as fully featured as other payroll services on this list, Bambee’s payroll solution includes two-day direct deposit, wage regulation guidance, and automatic handling of federal, state, and local tax filing.
Bambee Features
- Support and guidance from a dedicated HR manager
- Development and implementation of HR compliant policies
- Employee onboarding and training
- Comprehensive HR audits
- Employee termination services
- EEOC-compliant document storage
Bambee Downsides
While the expertise of Bambee’s HR managers is undeniable, their HRO services lack benefits administration and recruitment strategies. Additionally, Bambee does not currently work with organizations of over 500 people.
Bambee Value
Both simple and affordable, Bambee is ideal for new businesses seeking relief from administrative tasks or looking to establish some HR best practices. Whether your HR team is undersized or nonexistent, a Bambee HR manager can help implement solutions that protect your business and its teams.
| # Employees | Monthly Cost |
|---|---|
| 1-4 | $99 |
| 5-19 | $199 |
| 20-49 | $299 |
| 50-500 | $449+ |
Annual billing with Bambee will help you get up to 20% off.
3. TriNet
TriNet offers an impressively wide array of HRO services, from benefits administration to risk mitigation. Their team can develop customized solutions for businesses of varied sizes. Their HRO packages are tailor-made to the needs of your business, and their pricing model allows for flexibility and iterative additions of new services.
What distinguishes TriNet from comparable HR outsourcing providers is the industry-specific expertise of their teams. When you’re matched with one of their HR experts, TriNet will make sure that they have the commensurate experience of the realm in which you work. So whether you run a 501c3, a life sciences company, or an education startup, you’ll have access to the best HR practices in your field.
TriNet’s cloud-hosted software is also a breeze to use. Accessible from both smartphones and computers, TriNet’s interface is easily navigable by both employers and employees, and it also allows for seamless syncing with other services like Oracle, QuickBooks, NetSuite, Sage, and Google.
TriNet Features
- Industry-specialized HR professionals
- Varied benefits packages and administration
- Payroll processing
- Tax filing and W-2 preparation
- Training and development courses for employees
- Risk mitigation and liability protection
- Proprietary app for payroll, benefits, expenses, and time tracking
TriNet Downsides
Currently, TriNet only works with businesses with at least five employees, so smaller businesses might want to consider an HRO solution from Bambee.
TriNet Value
When working with TriNet, you’ll have 24/7, one-on-one support from their HR experts. As with every aspect of TriNet’s services, you can expect industry-specific knowledge that can help take your business to new heights.
4. Axcet HR Solutions
Axcet HR Solutions offers a PEO solution that provides your company the benefit of structure and regulation. If your small business currently pays too much for health insurance, struggles with employee turnover, or needs a dedicated payroll administrator, the team at Axcet HR can help you build out a solution.
Axcet’s HR professionals can take on just about every facet of human resources management, from recruitment to benefits administration and even termination. Highly skilled in the world of state and federal workplace regulations, Axcet’s team will also make sure that your teams abide by any government regulations.
Axcet’s PEO solutions, unlike those of an HRO, require you to partner with them, effectively making them into your co-employer. While this commitment may sound intimidating, working with an IRS-certified PEO (CPEO) like Axcet HR brings many benefits such as financial stability, industry experience, and organizational integrity.
Regardless of where your business is at in terms of growth, Axcet HR Solutions can partner with your organization to help develop and implement comprehensive HR solutions that protect your teams and foster a culture of progress.
Axcet HR Features
- Recruitment and retention infrastructure
- Employee discipline and termination guidance
- HR policy development and implementation
- Leadership training solutions
- Payroll and tax administration
- Legal Compliance
- Diverse range of employee health benefits
- Workplace safety audits and recommendations
- In-house workers’ comp claims team
Axcet HR Downsides
Axcet HR operates nationwide, but currently doesn’t take on clients in:
- California
- Hawaii
- Kentucky
- New York
- Pennsylvania
So if your company is based in one of these locations, choose another HR outsourcing company.
Axcet HR Value
The value of Axcet HR lies in their expertise. Composed of HR professionals from a wide range of industries, Axcet HR Solutions can consult with your business and devise a strategy that delivers winning results––both for you and your employees.
5. Insperity
If your company is weathering an HR-related issue, then Insperity undoubtedly has a solution for it. By automating crucial HR functions and administrative tasks through their HCM infrastructure, Insperity allows businesses to operate more efficiently.
When partnering with their team, you’ll have access to a network of HR, payroll, and benefits specialists. Spearheaded by your Insperity client success manager, this team can help you navigate the intricacies of your tailor-made HRO solution.
Besides their HR support and technology, Insperity really stands out with benefit offerings. While they’re not required––as Insperity packages can be customized to your liking––Insperity’s benefits administration rivals that of Fortune 500 companies, giving your small business the chance to attract the best talent in your industry.
Like other HR outsourcing companies, Insperity offers generous health, vision, and dental insurance. Insperity can help implement online benefits enrollment, data integration with carriers, and HSA, FSA, and HRA administration.
Insperity Features
- Fortune-500 level benefits
- Proprietary HR platform that streamlines workforce management
- Access to HR professionals
- Intuitive self-service tools for employees
- HR administration
- Payroll administration
- Customized report generation
- Time and attendance management
- HR policy generation and dissemination
- Talent acquisition, onboarding, and management
Insperity Downsides
Insperity offers both PEO and HR services; however, for those seeking a purely HRO contractor, it’s difficult to distinguish which of their offerings fall under this category. As with TriNet, businesses with five or fewer employees will want to seek a different solution.
Insperity Value
With its comprehensive array of services, Insperity is the ideal HRO partner for small- to mid-sized businesses, particularly those looking to level up their benefits.
6. Justworks
If one were to combine the intuitive software of Bambee with the HR offerings of TriNet, you might end up with an HR outsourcing solution like Justworks. With plans that include benefits starting at $99 per month, Justworks is a professional employer organization that’s both accessible for small businesses and multi-faceted enough to serve larger organizations.
Their basic package includes payroll management, compliance assistance, and other expected HR tools. Their more robust Plus plan, however, covers HR responsibilities like COBRA administration, health advocacy services, medical insurance, and HSA/FSA accounts.
Regardless of which plan you choose, you’ll have access to hiring, onboarding, and workflow management tools that help your business scale faster.
Justworks Features
- Medical, dental, and vision plans
- Proprietary HR tools for onboarding and PTO
- Organizational charts
- 24/7 HR consulting and support
- HR Compliance
- Employer tax forms and filing
- Automated deductions and direct deposits
- Workers’ comp, EPLI, and 401(k) services
- HR policy creation assistance
Justworks Downsides
While Justworks is a competitive HR outsourcing service, their pricing model can become costly as your business grows. This may leads larger companies to evaluate whether they remains cost-effective compared to other PEO solutions as they expand their employee base beyond initial thresholds. However, Justworks continues to be a solid choice for small to medium-sized businesses searching for an all-in-one HR outsourcing solution.
Justworks Value
The benefit of Justworks is its simplicity. From its software’s intuitive interface to the straitlaced pricing, this HRO service wowed us with its ease of use.
| Justworks Basic | Features Payroll, Benefits, HR tools, and Compliance |
|---|---|
| <50 Employees | $59/mo per employee |
| 50+ Employees | $49/mo per employee |
| Justworks Plus | Plus Access to Medical, Dental, and Vision |
|---|---|
| <50 Employees | $99/mo per employee |
| 50+ Employees | $89/mo per employee |
7. ExtensisHR
While a majority of HR outsourcing companies offer a mobile software platform, ExtensisHR centers their methodology on a “mobile-first” approach. With ExtensisHR, you can manage payroll, benefits, compliance, and recruiting––all through a smartphone or a computer.
Similar to other software-centered HROs, ExtensisHR emphasizes the importance of obtaining and tracking data, be it from workflows, HR practices, or peer reviews. By actively collecting this data, and presenting it in customizable reports, ExtensisHR enables your HR department to make strategic improvements that lead to growth.
ExtensisHR Features
- HR guidance and support
- Benefit planning and consulting
- Employee benefits administration
- Risk management
- Automated job postings
- Integrated learning schedules for upskilling employees
- Dedicated customer service team
ExtensisHR Downsides
Unlike some other HROs on this list, ExtensisHR does not appoint a dedicated, industry-specific HR professional to your account. That said, the company does work with a variety of industries.
ExtensisHR Value
In alignment with their mobile-first ideology, ExtensisHR is an ideal solution for quickly growing businesses. In under 24 hours, you can get a customized quote and start using ExtensisHR for your HR needs.
Why Is HR Outsourcing Important for Small Businesses?
For small businesses, outsourcing HR can save both time and money. Particularly for organizations with neither the capital nor personnel to handle employee management, HR outsourcing provides an effective solution to reduce HR risks.
If your business currently struggles with the following issues, then consider outsourcing your HR function.
Non-HR Team Members Taking on HR Functions
According to ADP, 70% of small businesses delegate HR tasks to team members with little or no experience managing workforces.
While this tactic might work in a pinch, it’s important to remember that HR professionals are an indispensable source of expertise in terms of onboarding employees, employee training, and HR guidance.
Insufficient In-House HR Team Members
HR outsourcing is not a one-size-fits-all strategy. In fact, with most outsourced HR services, you can select which specific HR functions you’d like to offload into their hands.
For example, if you’ve already got a team to handle recruitment and onboarding, you might call on an HRO to handle issues of payroll and employee benefits.
Lawsuits & Liability
HR professionals are an integral component of shielding your organization from employment-related lawsuits.
With an extensive knowledge of policies related to wrongful termination, discrimination, workplace harassment, and workplace injury, a dedicated HR professional can help ensure all aspects of your workplace are in alignment with both local and federal regulations.
Which HR Functions Can Be Outsourced?
You can outsource almost any component of human resources to an HRO. The following processes represent what you can expect from an HRO company, and some companies offer additional services.
HR Administration
Many new companies give little attention to human resources, but as your business scales, you’ll want to establish some protocols for employee conduct, communication, and training.
An experienced HR professional can help you establish these HR operations, creating an employee handbook, managing employee relations, and drafting policies specific to your company.
Payroll Processing
By outsourcing payroll processing, you can help make sure that employees are paid on time and that your company complies with local and federal payroll regulations.
Many HRO companies will also assist your business with filing taxes, getting tax credits, and handling workers’ compensation claims.
Benefits Management
To attract the best talent, your company needs a compelling benefits package that––at a minimum––includes health insurance, retirement plans, and health savings accounts.
Many HR outsourcing companies can help you create and administer employee benefits, giving your workplace a competitive edge.
Talent Recruitment and Onboarding
For larger organizations, employee recruitment is a full-time commitment, one that requires full-fledged teams to both attract and onboard talent. Smaller businesses, however, often rely on their existing teams to take on these roles.
If your company struggles to find and keep quality personnel, then an HR outsourcing company could take on these duties, creating a talent acquisition strategy, implementing an applicant management system, and developing onboarding practices for new hires.
Legal Compliance
Unless a member of your team is well-versed in issues of business compliance, then lawsuits from team members will pose a continued risk to your organization. To address this, an HRO company can assist you with both understanding and complying with federal, state, and local regulations that govern both employment and safety practices of your industry.
Performance Management
To help your business manage annual reviews, salary negotiations, and other conversations related to employee performance, an HRO company can step in.
In most cases, you’ll want an in-house team member to lead these types of conversations, but an HRO professional can help you plan for them, aligning company goals with the expectations of individual team members.
Employee Relations
No matter how healthy your workplace culture is, conflicts will inherently arise. Particularly for smaller companies in which leadership is diffused throughout the organization, handling these types of issues can prove difficult.
HR outsourcing companies can provide you with an unbiased third party that can help mediate disagreements among team members. These companies can also help you create, implement, and update your employee handbook.
HR Services vs PEO
Both HROs (HR outsourcing provider) and PEOs (professional employer organizations) can help small businesses tackle HR-related issues; however, the two types of organizations differ in their approaches.
While an HRO company acts as a contractor, a PEO acts as a partner or co-employer, hiring its own employees, providing payroll services, paying taxes, creating W-2s, and managing any associated tax liabilities. When partnering with a PEO, your business handles business decisions and employee responsibilities, while the PEO handles all aspects of HR.
When compared to an HRO, the main differentiation with PEOs is that the PEO takes on the legal and financial responsibilities of your employment practices. PEOs often come with lower-premium health insurance and workers’ compensation plans, allowing smaller businesses to offer the competitive benefits packages of larger companies.
HROs and PEOs Compared
| HRO | PEO |
|---|---|
| Contract with your business and take on neither tax nor financial liabilities | Partner with your business and take on associated tax and financial liabilities |
| HR services in an “a la carte” pricing model | More fixed HR outsourcing packages |
| Lower cost | Higher cost |
| Less comprehensive benefits packages | More comprehensive benefits packages to employees |
What Is an IRS-Certified PEO?
An IRS-Certified PEO, often referred to as a CPEO, has met the rigorous standards for professional employer organizations. Currently, fewer than 7% of PEOs hold IRS certification. To qualify for this designation, a CPEO must:
- Have at least one physical business location in the United States.
- Demonstrate a history of financial responsibility, organizational integrity, and tax compliance.
- Be managed by a majority of U.S. citizens and residents with demonstrated expertise in employment tax compliance.
When the IRS designates a PEO as certified, it denotes a high degree of trustworthiness, minimizing the onus of financial risks in your partnership.
Final Thoughts on HR Outsourcing Services
In 2024, the average salary for a HR specialist hovers somewhere near $50,000. But, unless your company has reached a point where it can foot the bill for this type of personnel––or potentially several––HROs offer a cost-effective way to protect both your employees and your organization.
When comparing quotes from HROs, be sure to consider which services they offer. Which duties could benefit from the work of true professionals? Although software can be a great way to track data, you’ll be happier working with an HRO that’s backed by humans skilled in the art of managing people.
