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What HR Functions Can You Outsource?

Human resources (HR) refers to far more than just one function. Your HR people handle a huge array of tasks and duties; that’s partly why HR can easily overwhelm small teams. Fortunately, it’s possible to outsource only individual pieces of your HR needs, when appropriate. Here are the most common HR functions that you can outsource.

HR Administration
HR involves more activities than just transactional. Implemented well, HR can serve an organization’s strategic goals, especially with its workforce. Certified HR consultants can create service plans and offer strategic recommendations around policies and procedures, employee development, new hire support, and more. Better yet, a vendor can often provide a bevy of online tools and resources for administering HR, including self-service portals for employees and business owners. Learn more about outsourcing HR administration here.

Payroll can be time-intensive and error-prone if you’re inexpert at it, and it requires extensive knowledge of multiple regulations. Outsourcing this function can return valuable time to employers. Payroll processors will handle all the usual suspects (payroll administration, direct deposit, paycheck distribution) as well as any documentation or reporting requirements (W-2 preparation, EEO-1 reports, etc.) Payroll processors also usually handle or provide tools for tracking time off (including Family and Medical Leave), time and attendance, and any unemployment claims. Learn more about outsourcing payroll here.

The National Retail Federation (NRF) has found that 69% of small business owners feel overwhelmed by regulations, rules, and mandates. Tackling compliance requirements takes more than just time away from the business, it also puts the burden of responsibility and accountability squarely on the owner’s shoulders. That is a weight that outsourcing can help lift. A compliance partner can help manage wage and hour disputes, harassment claims, workers’ comp, safety programs, employment law requirements, company policies, and more. For more information on outsourcing compliance, click here.

As with any other outsourced function, outsourcing recruitment means gaining access to high caliber service delivered by subject matter experts, typically at much lower cost than trying to handle these functions in-house. Further, Professional Employer Organizations (PEOs) can consolidate and flatten an array of employer-related costs into a single condensed expense. Recruitment services can also include background screening, application and interview procedures, onboarding services, and more. For more information on outsourcing recruitment, click here.

The third annual Guardian Workplace Benefits Study found that one-third of employers now outsource all of their benefits administration, a 65% increase since 2013. “Our study shows utilizing outside expertise can offer opportunities for companies to transform their benefits package and offer a broader range of employee benefits and related services,” says Ray Marra, Senior Vice President, Group Products at Guardian. Outsourced benefits programs (including insurance plans and programs, retirement benefits, and more) can incorporate as much or as little as the client wants. The outsourcing company or PEO will typically administer all aspects, including enrollment, compliance, eligibility oversight, claims management, and online self-service tools for both employers and employees. For more information about outsourcing benefits, click here.


CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about our ability to create a strategic HR function in your business that drives business growth potential, contact us today.