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When you partner with an HRO company, you trust them with your team — choose the very best to know they’re in good hands.
If managing your human resources (HR) functions in-house becomes too much to handle, you can outsource some or all of these services. Human resources outsourcing (HRO) services offer expert HR teams who can take over your HR needs for you, handling areas such as employee benefits, payroll processing, recruitment and regulatory compliance. We spent dozens of hours researching, testing and analyzing the best HROs to help you find the right partner for your business. Consider our picks for the best HR outsourcing companies below.
At Business News Daily, we’ve spent years researching and testing the HR software and services that entrepreneurs need to manage their teams effectively. Our team of small business HR specialists conducts independent evaluations of the best HR service providers to determine which best support internal operations. We also regularly consult with HR experts, including recruiters, hiring managers, compliance officers and HR consultants, to stay on top of the latest HR trends impacting small businesses. And every review we publish is evaluated by our editorial staff to ensure objectivity, accuracy and fairness are at the core of our decision-making. Learn more about our editorial guidelines.
To find the best HR outsourcing companies, our team of small business HR experts closely reviewed the terms and conditions of partnering with the leading HRO names on the market. We conducted Q&A sessions with company representatives and interviewed them about what it’s like for businesses to work with their team. We also examined offerings like payroll management, benefits administration, and…
To find the best HR outsourcing companies, our team of small business HR experts closely reviewed the terms and conditions of partnering with the leading HRO names on the market. We conducted Q&A sessions with company representatives and interviewed them about what it’s like for businesses to work with their team. We also examined offerings like payroll management, benefits administration, and hiring and onboarding processes to ensure businesses would be in good hands when choosing any of our best picks. We also tested each provider’s software platform to ensure it was easy to understand and simple to navigate. Finally, we researched reviews from each company’s real-life clients to determine how well they delivered the services they offered.
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To find the best HR outsourcing companies, our team of small business HR experts closely reviewed the terms and conditions of partnering with the leading HRO names on the market. We conducted Q&A sessions with company representatives and interviewed them about what it’s like for businesses to work with their team. We also examined offerings like payroll management, benefits administration, and hiring and onboarding processes to ensure businesses would be in good hands when choosing any of our best picks. We also tested each provider’s software platform to ensure it was easy to understand and simple to navigate. Finally, we researched reviews from each company’s real-life clients to determine how well they delivered the services they offered.
considered
reviewed
selected
Best for Reporting and Analytics
Best for Startups
Best for Payroll
Best for Strategic HR Advising
Best for Midsize Businesses
Custom pricing
Starts at $99 per month
Custom pricing
Custom pricing
Custom pricing
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Yes
No
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Phone, email, live chat, dedicated specialists
Phone, email, live chat, dedicated specialists
Phone, email, live chat, dedicated specialists
Phone, email, live chat, dedicated specialists
Phone, email, live chat, dedicated specialists
TriNet’s HRO services provide access to the company’s robust technology platform, which includes strong workforce reporting and analytics tools. We like that TriNet offers a wide range of pre-built HR reports, as well as a user-friendly report builder for customized reporting. Organizations can also schedule reports to run regularly. Administrators can choose the frequency of the report, who should receive it, and its format. They can also create customized reporting dashboards for quick access to the most relevant data.
TriNet offers a variety of HR functions, like recruitment, payroll, risk mitigation and employee benefits. You can also train your staff with TriNet’s 360Learning management vendor, with the ability to record employee course completion. These HR services are even more useful when used in conjunction with TriNet’s robust reporting and analytics tools to obtain data-driven insights about different areas of your business’s HR operations.
TriNet’s workforce analytics dashboard makes it easy to see employee metrics. Source: TriNet
TriNet users like the platform’s implementation process and scalability. They also like TriNet’s employee onboarding and training features. However, some users noted that customer support can be difficult to reach at times. TriNet earned a 7.1/10 rating on TrustRadius.
Bambee’s offerings are the best for startups that need help getting their HR activities off the ground. We like how companies are assigned a dedicated HR manager who provides direct support on HR matters such as onboarding, terminations, hiring and company policy creation. These managers can be contacted by phone, email and chat within the platform. You can also access your manager’s calendar to set up a time to meet. When testing the platform, we were impressed with Bambee’s automated tools that can be used to simplify compliance, payroll and other HR processes for startups. For rapidly growing startups, Bambee stays on top of ongoing legal compliance issues and updates.
Bambee’s guided payroll feature and employee policy tools are well suited for new startups that don’t have an employee handbook or HR processes in place, or for businesses that may be new to approving or processing payroll. Many startups need to build everything from scratch, including HR policies and documentation, and Bambee is designed to support startups in doing so. We like that the HR provider also partners with Deputy for time and attendance, and SimplyInsured for medical, dental and vision insurance. These partnerships further simplify the HR process for startups and growing businesses.
We found it easy to view and manage HR tasks within the Bambee platform. Source: Bambee
Real-life Bambee users appreciate their dedicated Bambee HR managers, stating that they are helpful and accessible. However, some users see Bambee’s pricing as a potential drawback, saying its services are expensive. Bambee earned a 3.6/5 rating on TrustRadius.
Paychex is a leading provider in the HR space, with established and well-respected solutions. The company offers affordable HRO services for small businesses alongside one of the best payroll processing solutions we reviewed. When testing the software, we found that Paychex offers a seamless payroll processing experience on the employer side, as well as easy-to-navigate self-service tools for employees who need to enter their time or view their pay stubs. Of the companies we reviewed, Paychex offers one of the easiest processes of transitioning to an HRO from a PEO. Many businesses use a PEO service at first but transition to an HRO as they grow. The transition is usually bumpy, but with Paychex, it can be seamless.
We like that Paychex helps you stay compliant with federal and state tax regulations. Source: Paychex
Users of Paychex like how user-friendly the software is, especially when it comes to payroll processing and tax filing. The biggest drawback users mention is its custom reporting tool, which some say is not very intuitive. Paychex earned a 5.9/10 rating on TrustRadius.
ADP’s human resources and payroll outsourcing services combine ADP’s robust tech platform with a personalized support team of HR specialists. We found ADP’s strategic HR advising to be an excellent resource for businesses that need hands-on support from an experienced HR partner. We like that ADP’s advisors can help businesses address employee retention, build recruiting strategies and more. Customers may also receive support for compliance matters related to employment laws and regulations, workplace safety, payroll and taxes, and more. Businesses that select these services get a strategic HR expert assigned to them; this representative acts as a go-to resource for HR questions.
The ADP platform makes it easy to manage employee benefits. Source: ADP
Real-life ADP users found many of its features to be useful, especially its benefits administration and payroll processing capabilities. However, some users note the software as a potential drawback, saying it looks older than competitors’ software. ADP earned a 6.1/10 rating on TrustRadius.
Insperity offers specialized experts to help midsize businesses navigate complex issues relating to time and attendance, payroll, performance management, recruitment and onboarding, employee safety, and benefits and compensation. We like that it assigns customers a dedicated account representative who can answer questions and, for more complex questions and issues, serve as a liaison to route queries to the appropriate expert.
Small businesses with plans to expand their workforce can also rest assured that transitioning from Insperity’s PEO service to its HRO service is simple. This isn’t something we found readily available with all of the vendors we researched. This can offer growing businesses the reassurance that they won’t run into the common challenges that come with migrating to a completely new platform.
We like Insperity’s user-friendly dashboard. Source: Insperity
Insperity users like the platform’s usability, especially its employee onboarding features. However, some users see Insperity’s pricing as a potential drawback. Insperity earned a 4.4/10 rating on TrustRadius.
There are many functions for HR to fulfill, such as recruiting and onboarding, benefits administration, time tracking, payroll and tax administration, performance management and employee development. While these can be managed by an internal team member or department, you also have the option to outsource HR. This involves hiring a third-party HR outsourcing service to manage some or all of these functions for you. This can be especially advantageous if you don’t have the time or resources to manage certain HR functions on your own.
The cost of HRO services varies widely. Most providers charge based on one of two models: by the individual service provided, or by a subscription plan that includes a bundle of features and/or services.
For small and midsize businesses, base costs typically range from $8 to $50 per employee per month. Of the services we reviewed, Zenefits had the lowest per-employee price, with plans starting at $8 per employee per month. Many of the HRO providers we reviewed offer custom pricing at all levels, so the cost depends on your service selections and company size.
Consider your business’s needs before you purchase a bundled subscription plan — you don’t want to pay for services you don’t need.
If you need what many HRO providers consider add-on services, expect your monthly costs to increase. The pricing of add-on services is also influenced by the size of your business, whether you have multiple locations and the complexity of your organization.
Examples of add-ons include time tracking, recruitment services and advanced reporting features. When you compare plans, pay close attention to add-ons, because what one vendor considers an add-on may be a standard part of another HRO vendor’s basic service bundle.
In addition to subscription and add-on costs, you may also encounter one-time implementation fees, which can range from $200 to $3,000. Some HRO providers don’t charge setup or implementation fees, so consider these fees when you’re shopping around and factor them into your cost comparisons.
For small and midsize businesses, there are many advantages of a strong HRO partnership. An HRO provider tracks, reviews and informs your business of changes in HR trends, laws and best practices. It also allows your team to focus on business operations instead of compliance.
A good HRO service provides the following benefits:
Recruitment is a common HR function that HROs can help with. Source: ADP
Selecting the right HRO does not have to be an overwhelming task. Aside from getting to know what services a provider offers (which can be difficult if all you are doing is visiting provider websites), you must assess its reputation for customer service and product customization.
Most HRO companies want your contact information before they share any useful information about their services and their costs. We recommend that you take the following steps during your search process:
Start by researching different HRO providers. Work to create a short list of HRO companies that have the features and support your business currently needs. Each HRO provider has its own strengths. Often, you can customize their HRO service packages so that you pay only for what you need. So, when you compare options, be sure to focus on the core functions you specifically need in an HRO service. We highly recommend talking to other business owners within your industry to see which HROs are held in high regard and which ones to avoid.
While HRO companies offer a lot of hands-on services, including consulting from expert advisors, a solid tech platform is also important. Sign up for demos with several providers to find a platform that you find user-friendly and that offers the tools you need. Don’t forget to ask about mobile app offerings for employees and administrators. Besides giving you a thorough demonstration of their platforms, many HRO companies offer a free trial of their software, so take some for a spin to see what you like best.
Many HRO providers offer custom pricing based on the HR functions your organization wishes to outsource, so you’ll need to obtain quotes from each vendor. You can often get a quote when you meet with the sales team for a demo or by completing a quote form on the vendor’s website. Then, you can compare the pricing and the included services to find out which vendor offers the best value for your money.
If you have selected an HRO provider that you are excited about, do not proceed further until the company provides at least three customer references that you can contact to learn about their experiences with the HRO provider.
Customer references should meet the following criteria:
Although HROs and PEOs both involve outsourcing HR functions to a third party, they have a few key differences.
For example, HROs allow companies to maintain control over their employees and systems and access administrative benefits through HR services third-party outsourcing. HRO services are typically a la carte or customizable.
On the other hand, PEOs directly employ the client’s employees. PEOs typically offer their HR services as a bundled package, and they require you to use their payroll service.
As with most things in business, whether HR outsourcing or in-house HR is better will depend on your business needs. Each option has its own benefits and disadvantages.
HR outsourcing is ideal for employers who need additional third-party assistance with one or more HR functions. If you are willing to give up some control of certain HR processes for expert assistance, this may be the right option for you. If you are a small business in need of help with all of your HR processes, you may consider outsourcing to a PEO specifically.
Hiring an in-house HR department can be expensive but valuable to those who can afford it. No one will know or understand your company and its culture better than in-house staff. This option also allows you to keep all of your HR data and processes in house as well.
Outsourcing and in-house HR don’t have to be mutually exclusive. Some companies benefit from outsourcing certain HR functions while also having in-house HR professionals manage others.
Gusto users can manage payroll and HR for employees and contractors. Source: Gusto
Once you’ve chosen an HR outsourcing service, contact the company for an initial consultation. Although implementation can vary based on your provider and service plan, a representative will typically help you get set up. You will need to add employee information into the platform. Certain functions will offer self-service capabilities for employees to enter their own details, taking the administrative burden off of you or your in-house HR staff.
If you are able to customize the platform, this is the time to set up customizations, automation workflows and permission settings. This can take additional implementation time up front but can be essential in creating efficient and secure HR processes.
When the platform is all set up and customized, it can be helpful to give your employees a training course on how to use it. Explain what features are available to them and how the platform or service will be used going forward.
If you are interested in learning about more top-rated HR outsourcing providers, some alternative solutions are worth considering include BambooHR, WorkSight by G&A Partners and Gusto.
BambooHR is a comprehensive HR provider that includes many of the services and tools needed to manage your workforce, such as recruiting, document management, time-off management, approvals and workflows, organization charts, performance management, and hiring and onboarding solutions. You can also add services for payroll, employee benefits administration and time tracking. Read our BambooHR review to learn more.
G&A Partners’ WorkSight is a secure and robust online HR platform that can automate many common HR tasks for small businesses. WorkSight stands out most in employee training and development. With a large library of training resources and customizable performance management and professional development offerings, WorkSight is an excellent choice for small businesses that want to improve employee productivity and performance.
Gusto is best known for its payroll platform, but it can also be used to outsource a wide range of HR tasks, including employee onboarding. Gusto supports the hiring process with seamless job postings and personalized offer letters through the new-hire onboarding and training process. Businesses can get advice from Gusto’s team of HR experts; certified HR professionals are available by phone or email to walk employers through HR questions and complex processes. Read our Gusto review to learn more.
At Business News Daily, our team of small business human resource experts has been researching and testing HR outsourcing services for years, comparing some of the leading solutions across nearly 125 key metrics. We considered 20 HRO service providers and closely reviewed and tested 11 of them before selecting our five best picks above.
Below are the factors we considered when determining our best picks. Each is weighted according to how much the criteria typically influences business owners’ buying decisions.
In addition to scoring each HRO we reviewed based on these criteria, we also determined the best use case scenarios for each. No two businesses are exactly alike, so we put ourselves in the shoes of different types of small business owners to identify the best HR outsourcing services for a variety of needs.
To learn more about how we review and test human resource products and services for small businesses, read about our editorial process here.
HR outsourcing services are robust in what they can do for you, but there are a few human resources functions that shouldn’t be outsourced: employee support, conflict resolution and company culture. An internal HR professional understands your team better than someone from an HR outsourcing agency, so they will be better equipped to provide employee support when someone on your team is going through a hard time. Similarly, if two employees have a disagreement, an internal team member can use their knowledge of each individual to help resolve the conflict.
Another major HR function that should not be outsourced is the development of your company culture. An external organization does not understand the details of your culture as well as an internal team member does. As such, you should create and grow your company culture internally.
Lastly, an HR outsourcing service will not terminate an employee for you. However, a good HRO provider can coach you and offer suggestions for the best way to proceed with employment actions such as termination, including when to involve legal counsel.
In many cases, yes, an HRO can manage benefits. You will need to ask prospective HROs specific questions relating to benefits management, such as those regarding their overall service offerings and open enrollment process.
Most HROs require 30 days’ notice. However, the more services a business has assigned to its HRO provider, the longer the offboarding period should be. Winding down a partnership with an HRO should be a careful process to ensure the continuity of your HR functions during the transition.
Outsourcing HR functions to an HRO company may be cheaper than hiring an in-house team, depending on your organization’s needs. However, many businesses use HROs to supplement, rather than fully replace, their in-house teams.
Although the decision will look different for every business, there are some common telltale signs that it’s time to consider outsourcing HR. For example, it may be time to outsource if you spend too much time managing HR problems, you’re worried about liability exposure, you need to save money on HR, or you can’t respond to employment changes as quickly as you need to.
Yes. Unlike a PEO which typically includes a bundled HR solution, HRO services can be customized. This can include picking a la carte features that you need support with, such as recruiting, payroll and benefits administration.
Yes, HR outsourcing providers prioritize the security and confidentiality of sensitive employee data through several measures. They employ encryption techniques for data transmission and storage, implement strict access controls with multi-factor authentication, and utilize secure data centers with physical and environmental safeguards. Adhering to industry standards like GDPR and HIPAA, they conduct regular security audits, provide employee training on data security, and have backup and recovery plans in place.
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