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The Cost of Outsourcing Human Resources

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

How much does it cost to outsource human resources“How much does it cost to outsource Human Resources?”

I can certainly answer that question– after you answer several questions for me, because as you might imagine, the answer is, “it depends.” 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?
  • 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?
  • Do you seek strategic advice and counsel for your talent strategy?
  • Are you primarily looking for someone to ensure you are compliant with employment regulations and/or provide benefits administration?

We have leaders from all types of organizations from 20 to more than 5,000 employees who approach us about outsourcing a part or all of the HR and recruiting functions. How we structure the engagement, in terms of the number of days per week, number of consultants, expertise needed, etc. will impact the cost of outsourcing.

HR 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 consultants 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 HR you need today may not be the same HR 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 costs associated with outsourcing human resources, please feel free to contact us.  We would love to give you a more defined answer based on your unique needs.

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