What is Human Resource Outsourcing?

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  • Written By: Tess C. Taylor
  • Edited By: Bronwyn Harris
  • Last Modified Date: 29 September 2019
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In the world of business, human resources outsourcing refers to using an outside third party to manage personnel functions for an organization. Many companies choose human resource outsourcing to reduce the time and costs associated with managing human resource procedures in-house. It is often beneficial to outsource a portion of or all the human resource activities that a company needs to maintain staffing requirements.

There are a wide variety of firms that offer human resource outsourcing services to other companies in an efficient and low-cost manner. Staffing and recruitment firms offer a wide range of services, including sourcing for new openings, conducting pre-employment background checks, and managing payroll and employee benefits. In addition, there are specialized human resource outsourcing companies that offer training, personnel development and team-building services.

Staffing, employee, and independent recruitment firms are most often called upon to provide human resource outsourcing services to companies in many industries. Staffing and employment firms provide on-demand sourcing, recruitment, and employee management services. In addition, background checks and pre-employment evaluations can be performed off-site. Employment services also manage hiring paperwork that is legally necessary to work.


In some cases, companies only utilize the services of financial firms that handle payroll processing and taxes. This often tedious and legally sensitive aspect of human resources can often be better managed by an outsourced company. Payroll, deductions, expense reports and taxes are processed in an efficient manner and disbursed to employees which frees up internal human resources departments to focus on other important aspects of personnel management.

Benefits companies often handle the outsourcing of employee wellness programs by providing external support for medical benefits and other health-related programs. Employees who are eligible to receive benefits can work with representatives of the outsourced benefits company to handle all concerns. In addition, many companies provide employee assistance programs which handle counseling and support services for employees experiencing difficulties.

For the company going through a period of high growth or change, taking advantage of a professional human resource outsourcing company makes good business sense. Not only does it address the needs for on-demand support of growth objectives through the placement of skilled staff, but it also allows for change management. Human resources is a critical aspect of doing business, therefore it can often be managed better during periods of transition or growth by contracting with a reputable human resource outsourcing company that can handle all the details.



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