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The Cost of Outsourcing HR

Posted on December 3, 2013
Kathy AlbaradoWritten by Kathy Albarado | Email author

People often ask how much will it cost to outsource my HR? I can certainly answer that question– after you answer several questions for me, because as you might imagine, the answer is, “it depends.”

For an outsourced model like we deliver at Helios, it could range from $3,500 to more than $12,000 per month. Large range you say?  Agreed. That’s why it depends. cost-of-outsourcing-hr

For example:

  • Are you a start-up or an established organization?
  • How many employees do you have?
  • Are you in a high growth mode where rapid policies, procedures and practice developments are necessary to ensure compliance and allow you to scale?
  • Are you in more of a maintenance mode with your HR and recruiting infrastructure already in place?
  • Will you leverage your back office infrastructure of your outsourced organization?
  • Do you need all of your HR function outsourced or do you have a specific function in mind as you may have an employee that may also be handling HR functions?
  • Are you looking for a PEO model or do you expect your employees to remain on your payroll? (A PEO may be a good model for a startup or small company up to 25 employees.)
  • Do you seek strategic advice and counsel and HR initiatives that scale your organization by building a culture that attracts, retains, and engages exceptional talent?
  • Are you primarily looking for someone to ensure you are compliant with employee regulations and/or provide benefits administration?

We have leaders from all types of organizations from 20 to more than 2,000 employees approach us about outsourcing a part or all of the HR and recruiting functions. How you answer the above questions will determine your ultimate cost of outsourcing.

  • For $3,500 per month, for example, you have access to a dedicated HR Business Partner and an entire team of HR professionals to provide guidance, advice and counsel whenever you need it. This service is provided remotely, typically with one onsite meeting per month to discuss updates to your strategic initiatives with members of you leadership team.
  • For $8,000 per month, a 50-75 person organization may be able to outsource the majority of their HR function providing regular onsite and remote support.
  • Outsourcing may not cost you less than a dedicated full-time employee; however, it will provide you with access to the resources, skills and experience of an entire team of HR professionals with a breadth and depth in all functional areas of HR. This is far more than any one person can provide. Also, consider that the person you need today may not be the same person you need in 18 months. If you are in a building mode, for example, the person to create and implement your policy may not be the same person who maintains them.

If you still have further questions about the cost associated with HR outsourcing, please feel free to call us directly at 703-860-3882 x102.  We would love to give you a more defined answer based on your unique needs.

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