5 Best HR Outsourcing Options for Small Businesses

Cody Cromwell
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HR Outsourcing Options Summary Table

You are right to be wary about HR costs, especially if you are a small business owner.

Almost every business leader has a horror story of HR costs. Since you are in control of your business operations, you need to be in control of the Hr. aspects as well for the highest ROI of your human resources.

Not only that, but there’s a good chance that your business strategy will involve a lot of growth and you will need to hire more employees. Since it’s difficult to predict that, you need to decide on outsourcing HR from several angles. You do not need to manage it all by yourself if you feel that you lack time and not enough energy to remain successful. Here I’ve narrowed down for you some of the best outsourcing options currently available in the market.

How We Evaluated HR Outsourcing Options

We wanted to include different types of HR outsourcing services to make it easier for you to choose the one that’s right for your small business. With so many options available these days, how do you know which platform is right for you?

As small business owners, you’ve probably found yourself in a situation when you’ve needed a part of your business staff to be part-time or even casual. You might be looking for that opportunity to take on that second position, or hire that college student or recent graduate to fill in the gaps during the week while you’re trying to grow your business.

Whether you’re a temporary staffing agency or hiring an individual, looking for the right person to manage your project can be complicated and take a while. You want to make sure that the person you’ve hired will be able to meet your needs and requirements.

Also, as a business owner, you know that the right person to manage your project or team is just as important as the right technology. You’ll want to spend time carefully examining the benefits of each HR outsourcing option to determine what it will be best for your company.

Best HR Outsourcing for Onsite Support: HR Consultant

HR Consultants are chief HR translators for small business. They have broad-based knowledge of recruiting, retention, career development, and employee relations and conduct research, provide candidate assessment skills, offer instructional/educational programs, conducts training, and supervise performance evaluations while also providing individual, team, and management level coaching. HR Consultants assist the management in recruiting and screening employees, developing employee policies, and training, and offer employee relations support in conflict resolution, communications, and performance management. HR Consultants are capable of handling employee relations tasks for up to 2,000 employees.

HR Consultant is a type of HR Consultant and can be utilized for Onsite support.

HR Consultant is one of the most dominant outsourcers within HR outsourcing marketplace.

Why to hire HR Consultant:

One reason why people are constantly hiring about HR consulting services is due to the fact that HR consultants have both technical knowledge and practical experience in the field. They are able to provide valuable insight into the latest hiring trends.

With HR consultants, you will get the following benefits:

they get to have a better sense of the business context, and hence they can assist their clients in making more informed decisions.

HR Consultant Pricing

HR Consultant Features

HR outsourcing is the most common HR solution among small businesses today. It has gained popularity and trust because traditionally, this method offers a cost efficient process and more flexibility to employers.

Why choose HR outsourcing?

Cost savings will be substantial

As a small business owner, you are looking at ways to keep your company’s expenses down. You will find that outsourcing your HR support will definitely help you achieve this goal. The cost of hiring and managing an HR office can vary in varying degrees of complexity. In cases of outsourcing, such costs would be divided among multiple employers. Thus, your overall expenses will naturally reduce down.

You maintain to control your company’s operations

Generally, outsourcing HR will maintain the operations of your company. The HR team will take care of hiring, training, and supervising of all the employees. You don’t have to worry about assisting in these endeavors, especially as things will be running smoothly on their own.

Flexibility when it comes to organizational changes

Since your HR team will be trained and experienced, they can be easily re-assigned to various positions based on your company’s needs. This is definitely a time efficient method that would greatly benefit your company’s changes and growth.

Professional HR for a fair price

How to Find an HR Consultant

Consultancy or Outsourcing Firm?

The HR function is a critical role for any business. HR influences so many different areas of your business, such as recruitment, training, benefits and payroll.

SR HR is an expertise partner and would love to talk with you in detail about the HR function in your business and seek to understand your exact requirements. We pride ourselves on being able to recommend the right HR solution for your business, whether it is a consultant, consultancy or outsourcing firm.

With the support of each of our experts, we can make sure we find the right partner for your business. Our extensive network includes both national and international experts, who could meet with you face to face or via Skype.

You will find within our network particular specialisms which will make finding the right HR solution for your business quick and easy. These include:

  • Recruitment Firms
  • Training Consultants
  • Benefits Advisers
  • Payroll Specialists
  • Health and Safety Consultants

Downsides of an HR Consultant

A business owner will hear that hiring an HR consultant is a great way to get a handle on HR for his or her business. After all, this person has done it before, so it’s not as if he/she knows nothing about the industry. But, the business owner thinks about it for a moment and realizes the downsides of keeping an HR consultant on staff are greater than the potential benefits.

Here are five reasons why the option of hiring an HR consultant doesn’t make a great deal of sense for small businesses:

{1}. High Costs: Most outsource HR to a consulting firm or an employee of a larger company. This is a mistake, since you will end up spending more money on HR than if you hired a full-time employee.
{2}. Not Enough Training: The small business owner will hire an outsource consultant with the goal of getting more work done more efficiently. However, the business owner won’t know ahead of time if the consultant is the right resource to do all the work.
{3}. Less Issues to Tackle: When someone is hired exclusively for one job, you know there’s more to their work than 20 miles to the office. On the other hand, you will be able to get by with the old, day-to-day HR matters.

Best HR Outsourcing for HR Project Work: HR Consulting Company

HR Consulting companies have a breadth of talent on their staff that consists of all the top human resource professionals. The HR Consulting organization recruit for all skill levels, specialties and competencies to build a team of top-notch and qualified talent. The HR Consulting organization can utilize their team to perform HR outsourcing and non-HR consulting work for large organizations.

HR Consulting companies can handle a lot of the day-to-day management of projects for HR. The HR consulting organization typically works in the large consulting company model. The HR consulting organization has a project manager or solution architect who will give a brief overview of the project and form the basis of overall objectives. Some of the outside partnering relationships can be alongside be included in the project.

HR Consulting companies provide solutions for an extensive array of business problems and opportunities. The HR consulting organization have typical project management and consulting service for small and large organizations. The HR consulting organization is a low-cost alternative to other outsourced solutions and can be used for a wide range of HR issues here a ones you would address through an internal lateral HR intake.

The HR Consulting organization can provide the right solution for your HR project needs.

HR Consulting Company Pricing

HR outsourcing is a process by which a company hires an outside HR solution provider to handle its entire human resources activities. Most of the HR outsourcing arrangements are conducted on an hourly rate basis. It not only saves you time but also reduces the complexity of management you have to handle and ensures that key functions like payroll, compensation, benefits and compliance are done by an expert.

HR outsourcing is an effective way of dealing with a staffing shortage, but you need to be clear about what you are looking for in a solution provider. A good number of options are available which can be categorized in to two categories û Internal Placement and Outside Placement. In order to address the immediate need for timely human resource management, both these options can be explored, which are:

HR Consulting Company Features

HR outsourcing is growing in popularity, and business owners are searching for a quality provider to make sure that their company’s hiring requirements are handled right. AHR Connections is one of the best HR outsourcing companies in India.

We offer a wide range of services and deliver quick results. Even in our current busy startup and small business environment, we have not had any complaints for yet.

Our consultants are trained by us and have been in the industry for an average of 7 years. To become a consultant with us, AHR Connections must pass a stringent interview process.

This ensures that you are getting the best talent that is available in the industry. We handle all the processes and flow of the hiring needs of your company.

This also relieves you from the worry of any hiccups. We guarantee the quality of the staff, and process all the paperwork. The candidate is placed on our database, and your HR process is in full swing. All your staff members have the full information about the company, and you can swiftly move on to other areas.

Our staff members are on call 24 hours, 7 days a week. We have the entire range of HR consulting services available to you. We can talk about training programs, organizing and conducting interviews, or even preparing contracts.

How to Find an HR Consulting Company

As the owner of a small business, you have to do a lot of things on your own. Between managing your payroll, contracts, insurance, and managing payroll for temporary workers, it can feel like you have your hands full. On top of all that, you also have to worry about the pay of every employee from your office manager to your sales manager. With all that on your plate, how are you supposed to find the motivation to find more staff?

Luckily, with HR outsourcing for small businesses, hiring and managing new employees has never been easier. HR managers and HR outsourcing companies work with small businesses of all sizes to provide the support small companies need to succeed in the modern workplace. From online payroll service providers to full HR consulting and outsource services, small businesses are able to focus on growing and excelling, instead of feeling overwhelmed and stressed.

Below are five ways to find a qualified HR company to help you manage your small business. When choosing an HR outsourcing partner, start with these five tips.

Review How These Services Are Categorized with Other hr or Outsourcing Companies

Businesses from startups to small corporate businesses to small businesses looking to grow are taking advantage of HR outsourcing services. With the help of HR consultants and HR outsourcing companies, both large and small, people who work at small businesses are more productive and can reach their full potential.

Downsides of an HR Consulting Company

HR consulting companies offer opportunities to improve your talent management agility and allow you to do your HR from the cloud. However, if you hire the wrong consultant or fail to provide adequate homework for the initial contract, you may end up losing substantial time and money.

In the outsourcing deals that have been signed, the HR consultant will work with you to oversee and implement your human resource policies and procedures, helping you to reap the benefits while solving personnel issues.

Ultimately, the works of the HR consultant, like any other business process, are typically cost-effective. The biggest factors that would determine the earnings potential of an HR service provider include your choice and training methods to implement your HR objectives.

The big question is whether or not the benefits will outweigh the potential risks in your business. Below is some information that can help you make this decision.

Best Low Cost HR Outsourcing: Online HR Software

Online HR is the most affordable option for HR outsourcing, it suits small to medium sized businesses with low to medium-sized HR complexity.

Online HR software delivers reliable, low cost HR services to businesses by streamlining and automating a number of HR processes such as hiring, training, benefits and more. If you’re hiring you can search comprehensive job resources to find the talent you need quickly. You can also streamline your recruiting and internal training processes to ensure your team and employees have the right resources, skills and training at the right time.

Online HR software automates time-consuming HR processes like hiring, annual leave, employee leave, HR events, managing benefits and documenting employee relationship history. If you’re using it the right way, you can reduce up to 80% of your time spent in business operations and HR.

Even though online HR software is inexpensive, it offers so much more than other HR outsourcing options.

You can also put it to good use for:

recruiting, employee onboarding, employee training, employee development, knowledge management and employee performance management

With an online HR software, you can:

Automate time-consuming HR processes.

Reduce up to 80% of your time spent managing your human resources.

Upgrade to an advanced version and more tailored HR solutions for businesses of any size.

Online HR Software Pricing

All HR outsourcing companies offer their solution through subscriptions. The price is very variable. The pricing depends on many parameters. Here is a list of the most common factors which determine the price of HR outsourcing software.

There are many service areas which are covered in a payroll software. Some of the common service areas are:

  • Compensation and Salary Management,
  • Employee Benefits Management,
  • Employee Leave Management,
  • Performance Management,
  • Employee time Clocks and Billing,
  • Activities and attendance,

Payroll Tax Accounting.

According to the service area, there is a basic package with predefined tasks which provide basic functionality. Additionally there are packages which extend the functionality of the basic package in case the company requires that.

There is always a set of features which are standard in the packages and may be used in every process of the package. The customizations are created based on the needs of the client.

Since the work flows across service areas, it is important to have a good insight on all the functionalities.

It is important to know the required end-to-end functionality and the time spent for each feature. The company should understand the time required for testing and deployment.

The scope depends on the activities and it should also be known in the process.

Integrations are very important; external services like file sharing, mailing services, OCR and external payment networks etc.

Online HR Software Features

Workforce management remains an essential separation of management responsibilities. If you are not seeking the constantly updated functions of human resources, you will undergo unnecessary waste and cost. Employers that fail to meet this challenge are constantly losing to their competitors.

An HR software application can have larger uptime, a large number of employees, lower cost and the speed needed to adapt to changing business situations. Here are five HR outsourcing options that you can choose from.

Employee Time and Attendance Tracking
One of the most common and essential features of an HR software application is time and attendance. It records employee data including time worked and travel on a dashboard which is visible to employees. When employees enter this information, it can show data points like work shifts, vacation days, sick leave days, annual leave days and holiday hours. It also verifies things like overtime hours to make sure that everyone is receiving the proper amount of pay they need.

Performance Management
This feature examines the performance of employees based on goals and objectives. It also includes those who need corrective investment from the employer to meet the requirements of the job. The performance management feature can also show how often the employee is meeting their assessment and goals and can be adjusted at any time through the dashboard.

How to Find HR Software

With the high costs and low adoption rate of companies adopting Human Resource Management (HRM) solutions, there has been a continuous need to search for better HR technology that can help companies save time and money. With high cost overruns and low adoption rate, the responsibility of HRM never seems to fall on the shoulders of companies. This has created a smart HRM industry that can make it easier and hassle-free for business owners to follow these initiatives and bring more stability to their workforce.

Ranging from small to big companies, companies can benefit a lot from implementing an HR software that compliments their business goals. Knowing all the features and outcomes of good HR software will empower you to shift from a traditional approach to implementing a more practical approach. A little research and careful planning are only some of the reasons why an HRM software can be such a viable resource that will help your company improve productivity. Below are some of the top HR outsourcing companies that offer HR services.

Downsides of Online HR Software

Online, HR managers no longer have complete control. Value is squeezed because HR managers cannot design or customize the software as they choose. The software company sets the direction and consistently strives to make the software better and better. The feedback is not positive because it takes a long time to answer employees’ questions. The company wants to make money, and the HR manager cannot endorse the product.

However, it’s true that in recent reviews, most of the users were very pleased with the features of the software. The main advantages to the software are related to time and money. Managers don’t need to spend time on manual operations. The time saved in the operation of the HR system is huge, but some managers can deduct this time.

This software is not only the best One Pager, but it’s also one of the best HR Outsourcing Software for small businesses in India. It is not only available in India, but it provides the best HR Outsourcing Services (Online) in the world.

Indacomp International provide Flexible HR Outsourcing Services (Online) for large companies, medium-sized enterprises, and businesses with 50 employees and more.

Best HR Outsourcing for HR Compliance Consulting: HR Service Provider


The HR service provider (HRSSP) works on a pay per employee basis typically billing a few dollars per employee every 30 days based on the number of employee checks performed. There may also be an option to pay a flat fee as a one-time service fee.

The HR service provider comes with all the bells and whistles of a full-service HR consultancy ” so they have access to quality tools like applicant tracking systems (ATS), hiring managers’ screening services, outsourcing of background screening and drug testing, etc.

Moreover, there is often a week or two of training that the employers can benefit from.

On the other hand, the HRSSP does not provide much in the way of employee benefits such as life insurance or 401(k). Additionally, these providers generally work within your office hours or during times that make sense for you and your employees.

On the plus side, the HRSSP is also more cost efficient than hiring a full service HR consultancy (FSHRC) and they save on travel time and other costs associated with hiring a consultant.

With the high pace of technological advancement and the Indian economy booming, there is high demand for HR consulting services at competitive costs. So for small business owners, these HR outsourcing vendors and consultancies are a great option to fill the HR and compliance gap.

HR Service Provider Pricing

World-class HR management doesn't come cheap. When you consider all the elements needed to get it right, from team members and software to a full-fledged interactive, onsite office and training, the numbers can add up. With more and more multinationals coming to India for their HR management needs, it's evident that the talent pool here, from HR managers to entry level candidates, has expanded significantly in the past few years. India offers a perfect blend of resources, location and access to resources for businesses all over the world.

If your HR needs are equally extensive, you can plan to hire an HR department. But this may not be your best option. Offering full HR management services doesn't just make sense from a cost perspective, but also from a service level point of view. An HR manager, or an HR department, is the one accountable for delivering a full-fledged solution for your HR needs, from recruitment to pay slip management to payroll processing. Often, companies overlook the return on investment (ROI) aspect of it, which is a mistake. However, there are many business owners who point out that this is the most expensive HR solution, and they prefer to outsource the service. But this is a crucial decision and one that needs to be made according to your exact needs.

HR Service Provider Features

HR outsourcing services are a good way for small businesses to save costs and time. By outsourcing HR duties to an HR service provider, a business can save staff time, hire talented people and allocate resources on its core competencies.

HR outsourcing providers have experience & expertise in many areas of HR management including talent management, recruitment, compensation, performance management, employee benefits, and tax related HR tasks.

In this post, we are listing down the 5 best HR outsourcing options for small businesses.

How to Find an HR Service Provider

Likewise, when you're looking for an outsourced, HR service provider, you'd probably like to compare the prices and then choose the best deal. However, a lot of information about these outsourced HR service providers are not very clear.

For companies, finding a reputable HR service provider is a delicate balance between efficiency, success and cost.

Human Resource Outsourcing

This is a relatively new trend in the HR outsourcing industry. Human resource outsourcing (HRO), also known as human resource management outsourcing (HRMO), is a mode of providing human resource management services to a third-party employer. The company hiring a human resource outsourcing provider is said to outsource their HR process. A company looking for an outsource HR service provider can do so with an intention to save costs, time, and better utilize their resources.

However, the employee working in an outsourced company is not an employee of the company hiring the HR service provider.

The company hiring an HR service provider would manage the employees working in the outsourced company through a contract. Employees usually have the option of either filling up job applications and waiting to be recruited for their preferred positions or joining the outsourced company directly.

The ideal candidates for HR service providers are those who are in need of more effective HR services in terms of saving both time and money while retaining flexibility.

Downsides of an HR Service Provider

The biggest downside to hiring an HR outsourcing service includes flexibility and responsiveness. When you decide to hire an HR outsourcing service, the decision has to be a permanent one. When you think about the training, projects, and responsive hours it already takes to manage, find, and staff a full-time HR department, the investment is already high. This is why many small businesses, startups, and those who don’t have a hefty HR budget with which to play, usually opt to outsource their HR functions to an HR service provider.

Best Full Service HR Outsourcing: PEO

PEO Pricing

In the past, PEOs were referred to as painters’ employees or ‘painters’.

It is not uncommon for companies to use a PEO instead of their own employees for a variety of reasons. Some will outsource functions where their own employees are overworked, others will use them to complete tasks that their employees are unable to perform due to an illness, some companies will use them purely for cost control. The PEO model can be a great option for small businesses if used correctly, and the most effective companies will be able to provide more value by combining multiple PEO services into one package.

However, the traditional painters’ or ‘employer’ function is still very reliable and effective for a variety of reasons:

They are stable – PEO services typically give businesses flexibility by allowing them to outsource part-time, seasonal or on-demand services. However, many PEO companies are unable to handle the extra load of work needed when a business goes through a growth spurt or has new business created specifically for them. By having their own employees, business owners are able to address the changes they need without the cost that comes with a PEO.

PEO Features

Today’s HR technology is expensive and complex, but it’s still important. No matter what your business size, your HR department’s primary job is to manage employee records and benefits, while also handling the company’s employment compliance needs.

If you’re looking for a way to improve your HR department’s efficiency and employee service level while also saving money, then Human Resources Outsourcing (HR outsourcing) may be the solution for you. HR outsourcing has been around for quite some time, but it’s only in the past few years that managing an HR department’s costs has become a priority for smaller business owners.

So let’s take a look at some of the major benefits of HR outsourcing:

Cost Cutting and More Flexibility

One way that HR experts can get a handle on HR department costs is to cut down on the expenses paid for by the company.

By outsourcing HR tasks or tasks involved with employee scheduling to a PEO or employer, you can get a handle on your expenses and improve the quality of jobs that you’re outsourcing. You can also focus on your core product or services, while the PEO handles HR or scheduling functions.

How to Find a PEO

Your small business may have many employees, and you may need to carry out and maintain Human Resources for your business. Employee relations and employee management are considered basic to keep a running business on track and are usually the responsibilities of your business owners. Outsourcing these issues to a professional firm, or Professional Employer Organization, or PEO is the best option.

Let’s understand the importance of outsourcing your HR problems before we get into the options.

Outsourcing Human Resources

Professional Employer Organisations or PEOs can help to keep your HR problems from your corporation, even as your business grows. A PEO is a company that provides a variety of services to small businesses. You will be provided a call center staffed with well trained people to help you with your HR problems. Frequent payroll and HR services are offered by most PEOs, many of which offer other services as well, like Paycom outsourcing payment system and even work space for your employees at some locations.

The concept of a PEO has made it possible for small businesses to get certain services for free. You will, however, have to cover the cost of your compensation plan and your health insurance. The amount of your premiums will depend on your benefits offered.

Downsides of a PEO

6 Questions to Ask When Outsourcing HR

Consider outsourcing all or part of your HR function. Outsourcing HR services to a small business can be a great option if you’re short on time, resources or both. Here’s how you can go about finding the right outsourcing partner for your company.

How much is the average time your candidates spend with your company before they are hired?

As a small business owner, you need to understand how your staffing solution works. Does your business use employment agencies or do you hire directly? What is the average time it takes to get a candidate from application to hire? Are you looking for a short-term solution or longer-term one? You’ll want to understand your staffing needs to prepare for your needs.

Do you outsource employment services with recruitment agencies or direct hire?

Why use agencies to recruit candidates when you can hire them directly? Agencies will have a more formal structure and will require an upfront fee, but they’ll offer all of the benefits that come with going through a recruitment agency.

You can expect agency fees to include a fee for their services of between 7-13 percent (depending on circumstances), and an administration fee of 2.5 percent of the total fee. If you want to bring the cost down, remember it is your job to advertise the job!

4 Pitfalls to Avoid When Outsourcing HR

Every company decides whether or not outsourcing its HR is the best move at some point. For smaller companies with limited resources and time, such a decision is harder. In fact, this is exactly why most small to medium size companies choose to outsource their HR function. However, here are some of the risks that you must be aware of when outsourcing your HR function.


In this ever-changing business world, where hiring the right number of employees to meet the objectives of a company can prove to be hard, hiring reliable and efficient employees is a must. However, in the current market where cost cutting has become the trend, hiring employees becomes a dilemma therefore it becomes more important for a company to have good HR practices.

Hence, HR Outsourcing to a third party company has become a great option for a company that is looking at increasing its efficiency and at the same time cutting the cost. This concept has been adopted by many companies across the world. Most of the companies prefer to outsource the in-company activities like HR, Payroll etc. to service providers.

HR Outsourcing makes a company more efficient and it does not require any extra capital. This works great for small and medium size companies that are in a great need of tools to cut the costs.


There are many ways to save money on HR outsourcing, but the hardest part is usually finding the partner who…s right for you. This is why I…ve created a rough checklist of the most important criteria to consider when choosing a HR outsourcing partner. If you…re just starting out, you…ll need to focus on this checklist heavily as you develop your company…s HR procedures.

Once you have the first couple of processes down, however, you…ll quickly realize that a vital part of managing your HR department is learning as much as you can about your host company…and the market as a whole. Once you know who is paying the most for their development and HR outsourcing services, you can get a better idea of who is worth partnering with, and who isn…t.


The first big security consideration is the actual ownership of the HR software that you decide to use. If you’re going to purchase software rather than use a service, you’re going to want to make sure you’re not just a client to the provider. The best option for this is to sign up for a managed service.

Managed Services take care of your software ensuring it’s running well and keeping you up to date. It also makes sure the software is secure and up to date on all the latest security updates.

While a managed service is an additional expense, if you’re going to take on a software that is going to be responsible for your HR outsourcing and, hopefully, generate some revenue for your small business, it’s worth at least having a look at a managed service and weighing the cost up against the value you’ll receive.

In short, if it’s worth it for your business, you should look at a managed service.


Among internet technologies, HR outsourced service is a service with a technology edge. It offers a lot of easy, convenient and effective ways to perform employee’s hiring and other functions.

HR outsourced services offer many benefits for employees and companies. Some of the benefits include an easier employee recruitment process, live and direct access to knowledge about companies, comfortable and easy monitoring of the current performance of employees, and an increase in working capital for some companies who are stuck with unprofitable working capital because of bad employees.

HR Outsourced offers many solutions such as employee screening, personal and professional recommendation, skills and qualifications search, background check, drug test, management search, IT outsourcing, and payroll outsourcing, etc.

HR Outsourcing can be divided into two sections based on varied business models and business platforms.

· Traditional: Traditional HR outsourced companies provide employees with traditional services such as employee screening, reference checks, skills and qualifications searches, and drug test services.

· Modern: Modern HR outsourced platforms are quite different from traditional HR outsourced platforms. These platforms focus on recruiting target employees through these services and also use rapid employee identification technology on the platform. Modern HR outsourced platform offers its employees many benefits such as discounts and cashbacks on the platform services, free and fast medical checks, and instant