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What are Human Resources Outsourcing?

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Human Resources Outsourcing, or HRO, is the process of outsourcing, or hiring out to an outside company, some or all of your company’s Human Resources operations. Outsourcing, a trend we hear about quite often, has spread to the human resources functions, and is a lifesaver for many companies. HRO is especially popular with growing small businesses that don’t have the knowledge, resources, or manpower to handle all of the tasks needed in today’s business society. And no, not all outsourcing is done overseas, as people often assume.

Companies choose to outsource one, two, or more portions of their human resources operations, and some choose to outsource everything, for a variety of reasons. These reasons include:


  • A chance to focus more fully on improving the company, not on paperwork and other tasks related to human resources. Companies want to do what they do best—and leave the rest to other experts. Spending time on paperwork, answer questions, studying up on regulations, and so on, take time away from building a company and taking care of clients.
  • For many companies, outsourcing is more cost-effective than hiring a full- or part-time employee. When hiring an employee, you have to consider not only his or her salary, but benefits, the cost to hire and replace, finding space for him or her to work, and paying for tools, training, and other resources needed to do the job.
  • Better compliance with local, state, and federal regulations, having an experienced, knowledgeable person on your side, and having an outsourcing company stand behind its work. Increasingly complex laws and regulations put companies in a bind, requiring time, expertise, and money to comply, and legal risks if they’re not complied with properly. Outsourcing minimizes these requirements and risks.



Next Page: What tasks will an outsourced HR company provide?

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