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Top 8 Best HR Outsourcing Services For Small Businesses In 2024

By November 13, 2023 January 26th, 2024 10 Comments

best-hr-outsourcing

When a job calls for specialized skills and knowledge, you call in the experts (most likely after realizing you can’t do it yourself despite researching and even subscribing to all the related newsletters).

You find a skilled virtual assistant when you need an extra set of hands. You hire a business lawyer when you need guidance on important contracts.

You use HR outsourcing for your small business when you need expert help complying with policies and efficiently running your growing company.

If you’re not already doing the last one, then it’s a good time to start.

HR outsourcing can save small business owners time, money, and stress, and those are just the top-line benefits.

WAIT! Get the free secret weapon that helps HR professionals navigate real-world embarrassing, uncomfortable, and common HR mistakes.

The best small business HR outsourcing services can also help you improve your HR function, increase compliance, and retain top talent.

If you’re considering outsourcing HR, be sure to do your research and choose a reputable provider.

This post explains everything you need to know about the HR outsourcing trend and even dives into what the best HR outsourcing services for 2024, such as Paychex, can do for you.

What Is Human Resources (HR) Outsourcing?

what-is-hr

HR outsourcing is the practice of securing human resources services and expertise from sources outside your company. Most often, these outside sources are small business HR outsourcing companies, such as Paychex, who can connect you with experts who require zero training to immediately jump in and help you with anything from advanced policy development to administrative tasks.

Two key subtypes of HR outsourcing, sometimes called HRO, services include:

  • Administrative Service Organizations (ASOs), provide key HR and administrative services.

Which HR Functions Can Be Outsourced?

best-hr-outsourcing-tools

Most commonly outsourced HR functions (HRO Survey):

Additional HR functions:

  • Payroll Administration
  • Bookkeeping
  • Accounting
  • Job Descriptions
  • Payroll Taxes & ERTC Services
  • Client Management
  • HR Policy Compliance Management
  • Unemployment Claims
  • Policy Development
  • Staff Training and Coaching
  • Labor Law Compliance
  • Employee Performance
  • Employee Termination
  • Audit and Wage-Claim Assistance
  • Talent Management

Why Is It Important For Small Businesses To Outsource Human Resources?

hr-outsourcing

HR outsourcing can help small businesses (especially those with limited financial and human capital) enjoy top-of-the-line support that meets all the Society for Human Resource Management’s metrics for effectiveness, including access, availability, reliability, and adequate communication.

HR outsourcing helps small businesses do what they need to, namely:

Focus on growth, not on administration.

  • When employees and company owners who are not HR experts (like Paychex’s) try to perform essential HR tasks, they can easily waste valuable time just trying to understand regulations and paperwork requirements. HR support for small businesses can free up time for strategic planning.

Take care of their employees.

  • Don’t underestimate the “human” element of human resources. Professional small business HR services ensure employees receive the benefits, care, training, and support they need to feel valued. (Tip: Provide solid HR support for small businesses along with other morale-boosters to make employees feel truly appreciated.)

Follow complicated rules and regulations.

  • Local, state, and federal employment regulations and requirements vary from state to state and change as often as 75 times per year. (That’s a lot to keep track of, especially if doing so is not your only responsibility.)
  • A dedicated, outsourced small business HR support company will know about the rules and the changes, helping you avoid penalty fines or worse—business-draining litigation costs. (There’s a reason about 28% of this survey’s respondents cited “lower risk” as a compelling reason to outsource HR.)

Practice smart spending.

  • Outsourcing HR services for small businesses can help companies optimize spending in a variety of ways. (In fact, nearly 80% of people responding to a Deloitte outsourcing survey said providers satisfied their cost-centric expectations)
  • Outsourcing HR solutions can help small companies put off the expense and risk of hiring a full-time HR team while also maintaining compliance and proper employee support.
  • Small business HR support professionals have expertise and knowledge, so they can also help you get the best deals on the best benefits, coverage, and other company-wide services and systems.

The Best Small Business HR Outsourcing Companies & Human Resource Support Services

1) Papaya Global

Papaya logo

If you’re a small business that works with specialist remote workers around the world, Papaya is one HR software worth checking out.

Papaya Global is first and foremost, a solid and dependable global payroll and payments processing solution. But it doubles up as an EOR (Employee of Record) solution or a global platform if needed. So, you can hire and pay workers from around the world without worrying about ensuring compliance with local laws and regulations.

Small Business HR support & tasks they will take on:

  • Tasks you may outsource to Papaya include, but are not limited to:
  • EOR (Employee of Record)
  • Payroll processing for a global workforce.
  • Global benefits.
  • Visa/immigration support
  • Policy Compliance

What makes Papaya Global a great HR outsourcing company for small businesses?

Papaya Global is a disrupter that’s been able to establish a solid offering in the global payroll space. If you are looking to outsource HR services, then working with Papaya is a win-win for both employers and employees!

Best for:

Small businesses deploying remote workers and looking for globally-compliant solutions.

Standout Features

  • Use as a global payroll software or EOR (Employee of Record) solution.
  • With Papaya, you can fund payroll accounts in 12 currencies and pay workers in 160+ countries.
  • Implement globally-competitive benefits
  • Visa/immigration support via the platform.
  • Self-service employee portals for accessing personal data, downloading payslips, or tracking time and attendance.

Pricing

The payroll and payments platform is available for as little as $3 per user per month. Visit Papaya Global’s pricing page for a detailed list of plans.

Reviews

Here’s what one Papaya user said on TrustRadius:

“Papaya has helped us take our company to the very next level by helping us automate our payroll processes. This may be something lots are underestimating, but managing payroll with global/remote workers is a great pain, especially in today’s world with greater regulation and the need to work with multiple vendors. It’s also completely unnecessary, as we learned when we began working with Papaya. Automation is not only easier and faster, but it’s also better.”

 

2) Paychex

Paychex-logo

Paychex simplifies your HR administration by handling the crucial aspects of human resources so that your business can grow while being confident that all HR services are handled.

Small Business HR support & tasks they will take on:

Working with an HR outsourcing provider like Paychex will allow you to cover:

  • HR services
  • Payroll
  • HR Compliance
  • Hiring services
  • Employee onboarding

What makes Paychex a great HR outsourcing company for small businesses?

Paychex is an all-in-one HR technology that provides a suite of tools to manage employee benefits, attract and retain talent at your organization, and keep up with HR regulations and compliance all while your team focuses on your core business.

Best for:

Paychex creates an HT system for businesses of all sizes — from self-employed individuals to companies with 10 employees to over 1000.

Standout Features

  • Group benefits including retirement, group healthcare coverage, and
  • Payroll packages built to fit businesses of every size
  • Access to a dedicated, experienced HR professional

Pricing

Pricing plans start at $44 per month and can be customized based on your business needs and the level of HR support you require. Learn more about Paychex to get a custom pricing breakdown.

Reviews

Here’s what one Paychex customer said on G2:

“Paychex has been a great partner for our small business. If we ever have a question or need help, we can always reach someone via phone. It’s convenient to have one company handle our 401(k) and other benefits. And our HR representative has exceeded all expectations..”

 

3) BambooHR

BambooHR Logo

Looking for an all-in-one HR toolbox that delivers on the essentials? BambooHR may be right up your alley. BambooHR takes care of everything a small business may need from an HRM software, including admin, recruitment, payroll, benefits, and data. It’s a complete HRM software that helps you manage and track the employee experience from start to finish. When you are looking for outsourced HR services, you could do a lot worse than BambooHR.

Small Business HR support & tasks they will take on:

Tasks you may outsource to BambooHR include, but are not limited to:

  • Payroll processing
  • Time tracking
  • Benefits management
  • Hiring, inclusive of an ATS (Applicant Tracking System) and onboarding task list
  • HR data and reporting
  • Tracking employee experience

What makes Bamboo a great HR outsourcing company for small businesses?

BambooHR is purpose-built to meet the needs of SMBs. You also have pricing flexibility, so you can add modules as you expand or scale. Together with award-winning customer support, Bamboo is worth checking out as a complete HRM solution.

Best for:

Small businesses looking for a single source of data and coverage of core HR tasks.

Standout Features

  • Move your HR database away from scattered spreadsheets and paper files forever into an organized and centralized digital database.
  • A variety of insightful and beautifully designed HR reports with customizable dashboards for smart decision-making.
  • Simplified PTO usage, calculation, and approval.
  • Election approvals for benefits in seconds, not days.

Pricing

Opt for the starter Essentials plan or get more features with the Advantage plan. Top up with extras in the form of add-ons if needed. See BambooHR’s pricing page for more information and a free quote.

Reviews

Here’s what one BambooHR user said on Trustpilot:

“BambooHR is the best HRM system I have ever used; I recommend it to everyone I know! UI is exceptional and intuitive, resulting in zero need to train users. I particularly enjoy its performance management processes. They’re quick, easy, and low effort for users. The FAQs and help guides are excellent. It’s easy to find out an answer without the need to reach out to their support team. Get it, it’s a no-brainer.”

 

4) Bambee

Bambee-Logo

Look no further for your human resources “match made in heaven.” Bambee has you covered!

Bambee is an HR outsourcing service that matches you with a skilled HR professional who can help you develop policies, understand and comply with regulations, and so much more.

Consider Bambee your expert matchmaking service for human resources professionals.

Small Business HR support & tasks they will take on:

Tasks you may outsource to Bambee include, but are not limited to:

  • Unemployment Claims
  • Government Communication
  • Policy Development
  • Policy Compliance
  • Staff Training and Coaching
  • Labor Law & HR Compliance
  • Employee Termination

What makes Bambee a great HR outsourcing company for small businesses?

  • Bambee helps small businesses enjoy the expertise and essential guidance of a dedicated HR professional at a beyond reasonable cost.

Best for:

  • Small businesses, especially those too small to have dedicated HR departments.

Standout Features

  • Employee Voices feature lets everyone in your company interact with your HR experts
  • Staff training assistance boosts policy compliance
  • The platform includes features for managing policies, collecting signatures, and more
  • Internal document review helps you get existing documentation up to standards

Pricing

Reviews

Here’s what one Bambee user said on Trustpilot:

We have been working with Bambee for several months now. Cynthia, our HR Specialist is amazing! Both her verbal and written communications are easy to follow and if I have a question she is right back with me. She is courteous, concise, clear and helpful. She really listens to my questions and when appropriate she knows I am always interested in best practices so she provides those as well. She also looks for consistency in our policies and when we are out of alinement she makes recommendations. She has been a tremendous help to us, we are glad to have her.

 

5) Zenefits

zenefits_logo

Zenefits provides you with HR solutions, delivered via a robust online platform, that is tailored to your business size and needs.

Get full-service support with talent management, policy compliance, and more.

Small Business HR support & tasks they will take on:

Tasks you may outsource to Zenefits include, but are not limited to:

  • Payroll Processing
  • Payroll Administration
  • Audit and Wage-Claim Assistance
  • Talent Management
  • Bookkeeping
  • Accounting
  • Performance Reviews
  • Employee handbook management

What makes Zenefits a great HR outsourcing company for small businesses?

  • Zenefits’ outsourcing provides all the services you could possibly demand from an in-house team.

Best for:

  • Zenefits offers solutions suitable for both small-to-medium businesses of 5 – 149 people and larger businesses of 150 – 5,000.

Standout features

  • Employee benefits feature makes it easy to offer top-notch perks
  • Expert workers’ compensation assistance helps employers save money
  • HR software helps you automate procedures
  • Experts help develop responses to regulatory agencies

Pricing

Reviews

One happy user wrote the following review on G2.com:

“We’ve been using Zenefits for over a year now and utilizing it for everything from hiring documentation, background check authorization, managing org charts, and managing paid time off requests and approvals. I am a big fan of their training materials, and in fact these were linked in my first day onboarding documents. The system is extremely user friendly and there are many templated “starting-points” to use, especially on the job offer side, so you don’t have to start from scratch to create a job offer, which is really great. I like how there’s a mobile app, and on a couple of occasions when I’ve forgotten to officially request my PTO (and I was on PTO), I’ve been able to log on and do so.

 

6) CoAdvantage PEO

coadvantage-logo (1)

CoAdvantage PEO offers clients payroll and HR solutions, an excellent online platform for managers and owners, and a great deal of structure and stability from the company itself.
With CoAdvantage PEO you can get a full-service PEO solution on top of excellent management and hiring tools to help your business grow.

Small Business HR support & tasks they will take on:

The main tasks CoAdvantage PEO will take on are but are not limited to:

  • Payroll processing
  • HR administration
  • Benefits administration
  • Compliance and risk-management support
  • Recruitment support and services
  • Training options

What makes CoAdvantage PEO a great HR outsourcing company for small businesses?

Their online tools and general services make them a great HR outsourcing service for many businesses, as are their reliable standard PEO services.

Best for:

CoAdvantage PEO is a fine choice for businesses of nearly any size, but we recommend it for businesses with more than 10 employees or will be growing rapidly to take full advantage of their perks and services.

Standout Features

  • Excellent payroll and HR administration services.
  • An excellent online platform and management tool for yourself, your managers, and your employees.
  • Some of the best recruitment tools in the industry.
  • An easy and helpful onboarding process

Pricing

Pricing for CoAdvantage PEO will depend on the size and needs of your business, as well as what services your business is interested in. We recommend if you are interested to contact a representative and get a quote.

Reviews

Here are a few quotes from a positive review of CoAdvantage PEO on G2.com:

“The platform design was very aesthetically pleasing and adjusting hours and looking up employees on the back end were easily accessible.”

 

7) Workday

workday

Workday offers a human capital management system that delivers the awesome benefit of combining cutting-edge technology with HR expertise.

Companies can use Workday to self-manage HR initiatives, enhanced by data-based insights and system-based knowledge.

Workday’s insights help companies optimize processes spanning the full range of an employee cycle, from staffing to career growth solutions.

Small Business HR support & tasks they will take on:

Workday can help you automate and streamline the following HR functions and then some:

  • Benefits Management
  • Analytics and Reporting
  • Time and Absence Tracking
  • Workforce Planning
  • Global Compliance

What makes Workday a great HR outsourcing company for small businesses?

  • The self-service system is perfect for adding sophistication, efficiency, and structure to existing or developing HR support models.

Best for:

  • Medium-to-large businesses

Standout features:

  • Insights correlate individual performance to overall company performance.
  • Configuration tools let you program the system for your own regional rules.
  • Analytics empower companies to make both incremental and long-term improvements.

Pricing

Reviews

One Software Advice reviewer gave Workday high praise for value and insight:

“Value. One simple word. Workday’s HCM platform is the Bentley of HR software. It’s easy to use and provides incredible insights to employee and company data.”

 

8) Trinet

Trinet-

Get the customized HR support you need without taking time away from other pressing aspects of developing your business. Trinet’s small business HR solutions can help you get the support you crave from an in-house HR team without taking time off to recruit a team by attending HR conferences.

Small Business HR support & tasks they will take on:

Tasks you may outsource to Trinet include, but are not limited to:

  • Payroll Management
  • Tax Code Assistance
  • Regulation Compliance and Assistance
  • Talent Management
  • Strategic HR Planning

What makes Trinet a great HR outsourcing company for small businesses?

  • Trinet is flexible enough to accommodate companies that are just starting out and need help ASAP.

Best for:

  • Businesses of all sizes, from 5 – 1000+ employees

Standout features

  • A comprehensive platform provides an HR hub for employees
  • Workforce analytics put HR data at your fingertips
  • Versatile reporting features help companies analyze data
  • Employee benefit options help companies streamline offerings

Pricing

Reviews

Check out this glowing Trust Radius review:

“We are a small ad-tech startup. I selected TriNet before we hired our first full-time employee to provide HRIS, low-cost benefits, payroll, compliance and HR support. It became the backbone of our employee programs and financial tracking. Over the course of the year we’ve successfully on boarded 7 executives.”

 

Bonus: G&A Partners

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This full-service HR company takes on all the administrative tasks of a full-time specialist. They cater to companies with growth mindsets—companies that need specialized small business HR services to develop that department in smart ways.

Using G&A Partners, small businesses can quickly and easily connect with HR professionals while spending almost no time on hiring and training.

Small Business HR support & tasks they will take on:

Tasks you may outsource to G&A Partners include, but are not limited to:

  • Benefits Administration
  • Safety Training
  • Policy Compliance
  • Payroll Administration

What makes G&A Partners a great HR outsourcing company for small businesses?

  • G&A Partners helps growing companies, who can’t take time off for hiring and training, quickly get expert HR help.

Best for:

  • Small-to-medium and/or rapidly growing businesses

Standout features

  • A single-sign-on employee platform simplifies onboarding and employee management
  • A sophisticated applicant tracking system helps companies optimize the hiring process
  • An e-learning platform enables companies to provide professional development courses and training

Pricing

Prices depend on company needs. Contact a G&A sales representative to learn more about their pricing model.

Reviews

This quote from one customer testimonial illustrates the big-picture benefits of HR outsourcing:

“Payroll, tax filings, tax credit applications, getting health insurance, getting [employees] onboarded—all of those factors take time, and time costs money. Having a PEO partner allows us to focus on making sure we have the right person to help us grow our business without focusing as much on how we’re going to take care of the employee’s requirements.”


People Also Ask These Questions About Small Business HR Outsourcing

Q: What tasks of HR are typically outsourced?

  • A: The tasks of HR that are typically outsourced include payroll administration, bookkeeping, accounting, client management, policy compliance management, and more. You can review a variety of HR outsourcing companies and the tasks they will take on in this list.

Q: Can you outsource HR for a small business?

  • A: Yes, you can outsource HR for a small business. In fact, for some small businesses, outsourcing HR might make more sense than investing time and effort in hiring and training full-time employees. HR outsourcing services can quickly connect small and growing businesses with trained HR experts who are ready to take on administrative tasks immediately. Small business owners use human resource outsourcing support services to continue scaling their companies instead of spending time and focusing on the HR needs of their growing startup.

Q: What are the pros of outsourcing HR in 2024?

  • A: The pros of outsourcing HR in 2024 include:
    • Getting expert help immediately
    • Gaining time to focus on strategic planning
    • Providing top-notch care and benefits to employees
    • Abiding by complicated rules and regulations
    • Optimizing business expenditures
    • Lowering the risk of penalty fines or lawsuits
    • Enhancing and streamlining business operations

Q: Is payroll an HR function that can be outsourced?

  • A: Yes, payroll is an HR function that can be outsourced. Many HR outsourcing companies handle payroll administration, management, and processing. You can review a variety of HR outsourcing companies and the tasks they will take on in this list.

Q: How does HR outsourcing reduce costs?

  • A: HR outsourcing can reduce costs by connecting you with experts who can find the best deals on benefits, coverage, and other company-wide services and systems. Outsourcing might also help companies delay or avoid the expenses of hiring and training their HR staff.

Q: How does HR outsourcing impact my employees?

  • A: HR outsourcing impacts your employees positively by helping them gain access to professionals who will accept questions, complaints, and concerns. Outsourcing to one of these providers may also give employees access to better benefits, more efficient processes, and streamlined systems.

Q: Why is HR outsourcing important to a small business?

  • A: HR outsourcing is important to small businesses, especially those with limited financial and human capital because it can help them enjoy top-of-the-line services and consulting without investing time and money to hire and train a full-time HR team.
  • HR outsourcing is also important because it allows small business owners to do what they need to, namely, focus on growth, take care of their employees, follow complicated rules and regulations, and practice smart spending.

Q: Are there HR outsourcing services that I can hire?

  • A: Yes, there are a variety of HR outsourcing services that you can hire. This list outlines several HR outsourcing services and details what tasks they will take on, what company size they cater to, and even what users have to say about their offerings.

Q: How much does a typical HR outsourcing service cost?

  • A: One HR outsourcing service we looked at costs as little as $99 per month. To learn about costs for most HR outsourcing services, you’ll need to discuss your requirements and company size with a service representative.

Q: Why do small businesses outsource HR?

  • A: There are many reasons why small businesses choose an HR outsourcing service. These include saving the business money, time, and resources. It can also help the business to stay compliant with employment laws and regulations.

Q: Is HR outsourcing good or bad?

  • A: Some small business owners find that outsourcing HR works well for them, while others find it to be a difficult and expensive process. Ultimately, it is up to each business to decide whether or not an HR outsourcing service is the right choice.

10 Comments

  • You made a good point that hiring a management consulting services can help in making sure that I can focus on the the growth of the business instead of allotting so much time in admin work. I’m thinking of starting my own accounting firm someday and I don’t think I can manage multiple employees on my own since that’s not my forte when it comes to working with other people. I’d like to be able to focus more on the technical side of things since I am more accustomed that that.

    • Richard Fendler says:

      Appreciate your response Alice! What you brought up is a huge “ah-hah” moment for many people starting a new business. The founder should be focused on growth and driving new business vs being bogged down with Admin housekeeping that can be outsourced. What type of accounting firm are you looking to start?

  • An HR outsourcing company can manage a whole range of human resources functions that you might otherwise outsource to multiple providers

  • Andrew Shirley says:

    I’m definitely not proud of this, but I just started up a second (smaller) location for my lumber business and I might have bit off more than I could chew with some of the exact tasks this post talks about. I’m having a lot of trouble with payroll, PTO, and time off requests. I need to fix this quick because I wanna be the boss who takes care of his people. It’s the right thing to do and I can’t lose the good people I have because of ignorance. I did find a couple of decent payroll calculators, but I need more help than that. This post gave me some great ideas. It’s just a matter of what I can afford during the pandemic. Thanks a lot for some great info!

    Andrew Shirely

    • Richard Fendler says:

      Hey Andrew – thanks for the note! I’d highly recommend checking out BambeeHR if you are struggling with payroll, PTO, and time of requests currently. I’ve spoken with their CEO and they are doing top notch work to help small businesses scale through redundancies bogging them down.

      • Andrew Shirley says:

        Hi Richard– sorry for the delayed response. So my son-in-law takes care of most our tech stuff, and he’s been in contact with BambeeHR and Insperity about taking care of some of our people management stuff. I really appreciate the blog and the advice.

  • HR outsourcing is definitely the best variant for that business, which wants to start growing because instead of thinking about administrative questions, the header will think about ways to grow and improve his business and save his time.

  • BPO services says:

    I totally agree. In general, business process outsourcing increases the quality of outputs through process optimization by experts and team quality control.

  • Sejal Shah says:

    This is good point, human resources outsourcing is the practice of employing an outside company to handle one or more of a company’s HR needs. Hiring an outsourcing company can save a company money, time and resources.

  • Hiresmart says:

    Businesses of all shapes and sizes can leverage HR outsourcing to perform crucial tasks. Large businesses can use HR outsourcing to reduce operational costs. Outsourcing tasks and roles is much more cost-effective than in-house employees. Great Post.

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