What Is Human Resources Outsourcing?

Subcontracting HR, also known as Human Resources Outsourcing (HRO), is when organizations engage external HR service providers to handle either all or selected HR functions for the organization. Outsourcing HR lets organizations to shift the responsibilities of basic tasks, harmonize HR processes, and reach the needed knowledge and sources without losing the focus on the main activities. The HR outsourcing services comprise the tasks like payroll administration, benefits administration, recruitment, employee onboarding, performance management, compliance, training, and HR technology solutions, depending on organization’s objectives and requirements.

Example Of Human Resources Outsourcing

Alternatively, a small company employing limited number of HR department staff and resources may opt to outsource payroll processing and benefits administration to a professional employer organization (PEO) or an HR outsourcing firm as well. Through the outsourcing of these responsibilities, a business can alleviate the administrative burden, maintain compliances with payroll tax laws, and afford competitive employee benefits without incurring extra costs in infrastructure or hiring dedicated HR staff. For example, a multinational corporation operating in several countries may resort to global HR outsourcing providers to standardize HR processes, handle international payroll, successfully deal with complex legal and regulatory conditions, and support workforce management across various geographical areas. Outsourcing Human Resources involves leveraging skills, availability, cost effectiveness and adaptability to meet the dynamic needs of businesses and the market.