What could be the benefits of outsourcing Human Resource (HR) functions for a company?

Benefits of HR outsourcing

We know that it can be daunting to juggle between management and dealing with administrative and HR-related stuff. As a result, many businesses are outsourcing these functions, allowing them to streamline their operations. HR outsourcing is an agreement between a business and a third-party company to oversee some or all HR functions of the business. Every HR function requires a certain amount of paperwork, and an outsourced HR company will cover the administrative tasks associated with your workforce. 

To know if it’s the right time to outsource, a company must identify the gaps between its HR needs and HR functions.

What HR functions can be outsourced?


Payroll involves determining the salary components and allowances, looking after any extra expenses incurred by the employees, along with the deductions from their salaries. Payroll outsourcing also includes wage and hour laws and making sure businesses are compliant with the labour laws regarding paying your employees. At Proactive, we have the right HR software system to perform payroll services efficiently.

Employee relations

HR outsourcing also addresses any employee issues and concerns such as employee-manager conflicts and creates company policies. As part of employee relations, the outsourcing company can even help businesses create their employee handbook.

Compensation and benefits

An HR outsourcing firm will help you administer your employee benefits package to relieve you of the work that consists of researching plans and complying with benefits regulations.

Talent acquisition

One of the most important HR functions is recruiting talent. The HR outsourcing company is responsible for advertising the position, doing background checks, screening resumes, scheduling interviews, and, finally, hiring new employees. 

Employment law compliance

As an organization, it’s important to comply with labour laws e.g. equal employment opportunity (EEO) laws and workers’ compensation regulations, Hiring HR compliance experts can keep you in line with all the laws, legal, regulatory and human resources best practices.

Performance management

An outsourced HR company will do annual reviews, salary negotiations and other performance-related conversations. It can provide training and performance reviews to keep the workforce’s performance at a high level. Outsourcing your performance management will help you determine your performance goals and disciplinary processes for poor performance.

What are the benefits of HR outsourcing?

Cost Reduction

Hiring an internal HR team can result in high costs to an organization in terms of salaries, workspace, benefits, training, equipment etc. When outsourcing HR functions, companies lower prices while still focusing on their core business. The outsourcing firm will give you the same benefit of having your HR department minus the associated costs.

Risk Management

One way a business can reduce risk through outsourcing is through employment and labour law. The HR outsourcing firm ensures that you are up-to-date and are complying with the regulations affecting the workplace to avoid any potential lawsuit. Also, they put in place company policies and best practices for both the organization and its employees.

Streamline HR processes and time-saving

Outsourcing creates greater efficiency with advanced HR System technology such as payroll administration and compliance management. It simplifies HR processes and further helps leaders spend less time performing mundane administrative tasks and dedicate more time to improving the productivity of their employees and growing core business operations.

Improves the quality of your HR

Employers can have peace of mind knowing that the HR functions of the business are being handled by highly capable HR experts who specialize in those particular functions.

Other benefits:

  • Acquisition of skills and technologies at competitive costs
  • Increase creativity by viewing the business from a different perspective
  • Bring new solutions
  • Improved management control on business operations
  • Improve employee engagement
  • Increased flexibility to respond quickly and effectively to economic challenges

Proactive offering HR Outsourcing services

Outsourcing your HR services with Proactive will allow you to make significant savings compared to hiring a full-time internal HR expert. We put at your disposal experienced consultants who master the policy and regulatory changes.

We offer personalized services that correspond to the needs of your company so that you can offer your employees the best experience possible. Overall, outsourcing your HR functions with us will result in cost savings, time savings, access to HR experts, prioritizing your core business and enhanced compliance.

If you’re in need of outsourcing your HR functions, contact us today!

Written by Karishma Pattoo, Content Specialist at Proactive Talent

2 replies
  1. Ella
    Ella says:

    Hi there! This post couldn’t have been written any better! Reading this post reminded me of my previous roommate! He always kept talking about this. I will forward this article to him. Pretty sure he will have a good read. Thank you for sharing!


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