Updated February 29, 2024

Best Outsourced HR for Small Business

Q: Which HR Functions Can You Outsource?

Here are some of the HR functions you can outsource: Recruitment and hiring. This includes applicant screening, tracking, and personal interviews. They can also handle talent searches and background checks.

By Alyssa Supetran

What Is HR Outsourcing?

With human resource (HR) outsourcing, you delegate HR functions to a different company or person. You'll be working with consultants or companies. Or just use an online HR software.

Let's talk about them in detail:

HR Consultants
They are experts in human resources. They'll provide personalized support to optimize your business operations.
HR Consulting Companies
These companies connect you with HR specialists. You won't have to go through individual applications from experts.
Online HR Software
These programs handle many HR admin tasks like employee data tracking and payroll processing. They can automate repetitive tasks to free up your time and resources.
HR Service Providers
These companies offer both consultancy services and HR software solutions. They can provide more hands-on support when you need it.
Professional employer organizations (PEOs)
Looking for more comprehensive HR services? PEOs can provide that for you. They'll handle all HR-related tasks.

Is HR outsourcing a good idea?
HR outsourcing is a good idea. It frees up your time, energy, and resources. That way, you get to focus on other aspects of your business. You also ensure that your business is compliant with laws and regulations. That means you'll avoid penalties from the government.

Now that you know who can offer outsourced HR services, let's talk about the best of them.

16 Best Outsourced HR for Small Businesses

This list is a mix of the 5 types of providers mentioned earlier. Not all of them offer the same kind of services. Take your pick based on what you really need.

Here's a quick guide for your reference:

HR Consultants: Fiverr, Freelancer, Upwork
HR Consulting Companies: Bambee, Jumpstart HR, Employers Advantage LLC
Online HR Software: Paychex Flex, Gusto, Sage HR, Workday
HR Service Providers: TriNet Zenefits, ADP
Professional Employer Organizations (PEOs): Rippling, CoAdvantage, Justworks, Insperity

Let's start with the apps for consultants.

1. Fiverr: Best for Affordable Pricing

Pricing: Gigs start at $5/project, with service fees

Fiverr is an online marketplace where you can connect with freelance HR professionals. You can hire qualified HR specialists worldwide for as low as $5/gig.

These experts are called "sellers". Most of them only go for short-term projects (or "gigs"). But there are others who offer subscriptions for long-term clients.

Their talent pool isn't as broad as some of the other platforms on this list, so just keep that in mind.

2. Freelancer: Best for Flexible Services

Pricing: Depends on your budget (hourly or fixed rates); with service fees

Freelancer is another platform where you can search for and hire skilled HR professionals. But unlike Fiverr, you'll have to post job ads. Interested freelancers will pitch their applications directly on the post.

It makes your hiring process easier. You'll just go through the bids on your job ad instead of checking freelancer profiles one by one.

You get more flexibility with payments, too. Choose between paying hourly or per project depending on your budget.

Take note that there have been complaints about bots and fake accounts being widespread on the platform. If you value quality over quantity of applications, the next choice may be worth checking out.

3. Upwork: Best for high-quality services from top consultants

Pricing: Minimum of $3/hour and $5/fixed-price contracts;^[1] with a 5% marketplace fee^[2]

If you're looking for top-rated HR consultants, Upwork is one of the best places to look. It works like Fiverr and Freelancer. The difference is, both employers and freelancers can advertise what they're looking for.

Choose to do fixed rates for short-term contracts or hourly rates for longer projects. Or hire and pay full-time employees through Upwork Payroll.

Have projects that last longer than a month? Find the perfect HR consultant with Upwork Talent Scout.

It's worth taking note that Upwork's service charges can be expensive for both employers and freelancers.

Not all business owners have the time to screen individual applicants. In those instances, go for HR consulting companies. Let's start with Bambee.

4. Bambee: Best for startups

Pricing: Starts from $99/mo; setup fees apply to higher-priced plans^[3]

Bambee connects small business owners with qualified HR professionals at reasonable rates. It accommodates businesses with 0 to 500 employees.

You'll get a dedicated HR manager who will help you build your HR policies from the ground up. Besides that, they offer many services to help you build and maintain an effective HR department. You'll get to meet local, state, and federal compliance requirements through them.

Need to contact your consultant? No problem. Do it anytime, anywhere through multiple communication channels.

While Bambee is great for startups and small businesses, its services can't cater to larger enterprises. Consider a different option if you're planning to expand or have more than 500 employees.

5. Insperity: Best for scalability

Pricing: Custom pricing only

If you want something flexible enough to handle future growth, go for Insperity. They're one of the biggest HR outsourcing companies around operating in multiple states.

They support basic and more advanced HR needs. In fact, they accommodate businesses with up to 5,000 employees. There's plenty of room for growing your company.

You get a dedicated team of HR professionals who provide hands-on support. Their services are also personalized. It's perfect if you need features that standard HR packages don't provide.

Insperity requires you to use their in-house payroll service. Unfortunately, you won't get to work with other payroll companies with lower rates. And since pricing is customized, it can get pretty expensive.

6. Jumpstart HR: Best for personalized services

Pricing: $197/hr or $250/mo^[4]

If you don't need HR services around the clock, then Jumpstart HR is a good choice. The services are available on demand. This is perfect if you just need help with some aspects of human resources.

When you subscribe, you're assigned a dedicated HR expert or team. They'll help you streamline business operations and create effective HR policies. Because they cater to U.S.-based firms, they're familiar with the local, state, and federal business laws.

They cater mainly to startups and small businesses.

Compared to the others on this list, Jumpstart HR's services are expensive. This is especially true if you use their hourly services. You'll want to compare against other custom pricing plans to see which is worth it.

7. Employers Advantage LLC: Best for effective risk management

Pricing: Custom pricing only (inquire about their fees here)

Employers Advantage LLC offers practical HR solutions to small- and mid-sized businesses across the country.

They'll help you create HR policies that comply with the law. You get to protect your company's interests through them. Also, their team of HR professionals provides expert advice so you can optimize your business operations.

Choose from individual services (a la carte) or HR packages. Or request specific services that aren't listed to give your business custom-tailored HR support.

Employers Advantage LLC offers in-person HR support in selected areas in the country. Check out this link for more information.

What if you're on a tight budget? An online HR software can help you out. Read on.

8. Paychex Flex: Best for flexible payroll services

Pricing: Starts from $39/mo + $5/employee^[5]

Paychex Flex is mainly a payroll software solution with some HR features for small- to mid-sized businesses. It's a great option if you just need help with basic HR functions. But you still get enough room for future growth.

There are three pricing plans to choose from. Essentials (Starter Plan) has everything you need to handle fundamental HR functions without going over budget.

But if you need something personalized with more advanced features, you can go with Select or Pro plans. Just note that they only offer custom pricing for these two. So you need to contact them to get a quote.

Not sure what to get? Take the Paychex Flex Online Quiz to determine which plan is best for you.

9. Gusto: Best for feature-rich payroll solution

Pricing: Starts from $40/mo + $6/employee^[6]

Gusto is one of the leading payroll services around. And they cater mainly to small to mid-sized businesses. They have a well-developed, feature-rich program that can handle most HR functions, from hiring and onboarding to benefits administration.

Even their lowest-priced plan, Simple, delivers a solid set of features at an affordable price. But despite their many features, they still have a limited selection of performance management tools.

To help with that, Gusto's software integrates with many popular third-party apps for accounting, time tracking, expense management, etc. This gives you an all-in-one software solution.

Looking for more affordable payroll services? Check out our list for Cheap Payroll Services.

10. Sage HR: Best for mixing and matching HR services

Pricing: Starts from $5.50/mo;^[7] comes with a 30-day free trial

If you're looking for all-in-one HR software that allows you to pick the features you need, Sage HR is your best bet. Its services are in "modules". You'll pick the specific functions in your plan.

Add more features later on if you need to. Because of this, you enjoy better flexibility and personalized services.

Sage HR's software also automates repetitive HR processes. This eases the burden of handling tedious admin tasks. You get to focus on other areas of your business instead.

Find out how much you have to pay with their handy online calculator.

11. Workday: Best all-in-one HR software

Pricing: Custom pricing only (inquire about their fees here)

Workday provides business owners with a centralized platform for all their HR, financial, and resource planning needs. It automates repetitive HR tasks, manages workforce processes, and provides valuable insights into your company's performance.

It also combines technology with the team's HR expertise to optimize your company's HR processes. It's cloud-based, so you'll easily access your company's data anytime, anywhere.

They also cater to businesses of all sizes. So, their services can adapt and accommodate the future growth of your company.

Even though Workday offers efficiency and convenience, third-party integrations are limited. It's also tough to gauge the costs because they don't display their prices online.

What if you want support from actual HR specialists and work with software? These next two options would be the right fit.

12. TriNet Zenefits: Best for comprehensive HR services

Pricing: Starts from $10/mo/employee (discounted rates with annual plans)^[8]

TriNet acquired Zenefits in 2022 and combined their resources to provide comprehensive HR services to small businesses. They have a feature-rich platform that can handle all your company's HR processes from start to finish. In fact, it integrates everything in one convenient location - from payroll to employee benefits.

Choose from several plans with the option to add more services as you see fit. And if you need hands-on help, use their advisory services to connect with the HR team.

It's an overall great choice for small businesses. The only downside is that they charge for a minimum of 5 employees. That means you still pay for 5 people, even if you have fewer or no employees.

13. ADP: Best for businesses of all sizes

Pricing: Custom pricing only

ADP is a well-known company that has serviced thousands of businesses through the years. They offer a broad range of services that accommodate any business, regardless of industry and size.

In fact, they have several options when it comes to HR outsourcing. You can choose between their payroll and HR packages (ADP Run) and dedicated HR plans (ADP Comprehensive Services). They even have PEO services (ADP TotalSource) if you need them.

They're an excellent option for small businesses that want a higher level of flexibility. There's also plenty of room for more advanced HR functions.

Is ADP worth it? Checkout our ADP Payroll Review

What if after viewing all that, you still get no option that offers what you're looking for? Maybe PEOs can help. Let's start with Rippling.

14. Rippling: Best for businesses with heavy technological needs

Pricing: Starts from $65/mo per employee;^[9] you can sign up for a free demo

Rippling is an all-in-one PEO company that offers a broad selection of business services, including HR and IT functions. Like ADP, they cater to small and large businesses alike. You don't have to worry about switching providers when your company expands.

Their different services integrate seamlessly. And their features are customizable. Adjust them according to what your business needs.

You can even turn their PEO services on and off whenever you want. The only downside is the cost. It's expensive, especially for small businesses on a tight budget.

15. CoAdvantage: Best for growing businesses

Pricing: Custom pricing only (inquire about their fees here)

CoAdvantage offers clients a full range of HR products and services. They focus on helping small businesses like yours develop HR processes.

That way, your business stays compliant while keeping your employees happy and productive.

The company adopts a flexible and integrated approach. They have a highly intuitive platform as well.

16. Justworks: Best for small businesses on a budget

Pricing: Starts from $59/mo/employee (less $10 for your 50th employee onward)^[10]

Justworks offers structured plans with enough flexibility to adapt to changing needs. There's a comprehensive set of services, from payroll to compliance assistance.

What's more, they give you access to their team of HR consultants. That means you get more hands-on assistance. And all of these are available at reasonable rates - perfect if you're on a budget.

The only drawback is that they can't accommodate businesses from certain high-risk industries. Plus, they can only handle companies with fewer than 500 employees.

Justworks has excellent customer support. In fact, you can contact their customer service team via multiple channels. You can get the help you need whenever you need it.

Okay, now that you know your options, let's talk about how to choose the right one.

How to Choose the Best Outsourced HR for Small Business

Considering the sheer number of options available, finding the right outsourced HR service can be tricky.

Here are some of the factors you should consider:

Level and Range of Services
Before you choose, ask yourself, do you need extensive hands-on support? Or do you just need help with repetitive HR admin tasks?

Another helpful question is whether you want to outsource everything or just a few functions.
Reputation/Past Performance
Handling human resources can undoubtedly be complex. So you'll want to go with a capable and reliable company. You can do your research by reading online reviews from reputable sources and previous clients.
Cost
Small businesses don't usually have the same budget as larger enterprises. So consider whether your preferred outsourced HR service fits your budget. Also, you'll want to make sure that they'll give you the best value for your money.
Scalability and Flexibility
If you have a rapidly growing business, it's best to consider an HR service provider that can accommodate your company's growth. This is also a good idea if you plan to expand your operations in the future.

You've seen your options; you have your criteria. You'll also want to know what exactly you can outsource.

Which HR Functions Can You Outsource?

Here are some of the HR functions you can outsource:

Recruitment and hiring. This includes applicant screening, tracking, and personal interviews. They can also handle talent searches and background checks.
Payroll processing. This includes calculating deductions, wage garnishments, taxes, payments, etc. Some offer this as a standalone service.

Read More: Best Payroll Service for Small Business
Benefits administration. They can help find the right employee benefits package. They can also handle computations for health care, retirement plans, and other work benefits.
Compliance. Their business laws and regulations expertise can help you meet requirements and avoid penalties.
Performance management. This includes handling performance reviews, salary negotiations, and skills training. Other examples are defining your company's goals and establishing employee disciplinary protocols.
Employee relations and engagement. They can mediate and negotiate for employees and employers. Also, they can help improve workplace conditions for better productivity.
Risk management. They can teach you about common workplace issues, like discrimination and harassment. This helps you prevent them from happening and avoid legal problems.

What HR functions should not be outsourced?
Ideally, an in-house team should handle termination management, company culture setup, and employee development. Their familiarity with the company's culture and dynamics makes them better equipped to handle these issues.

If you're weighing the pros and cons of outsourcing HR functions, reading these benefits will help you out.

Which HR function do you need the most outsourcing?

How HR Outsourcing Benefits Small Businesses

Outsourced HR services can offer you the following benefits:

Lowers costs. Outsourced HR services typically cost less than hiring an in-house team. You don't have to worry about onboarding, training, and benefits. You also generally pay less in terms of salary.

According to the Bureau of Labor Statistics, the average salary of an HR specialist is around $62k per year (approximately $5k per month). Outsourced HR services only cost $55 to $1,500 per month (around $660 to $18k per year).
Increases efficiency. Outsourcing optimizes your operations so that you and your employees can focus on the company's growth.
Provides access to a broader talent pool. Your choices won't be limited by your location if you outsource. You can easily hire someone from another state or even another country. Sometimes, you don't need to hire a person, just a program.
Improves risk management. Outsourced HR solutions can keep you updated on changes in local compliance laws and regulations. This keeps your company compliant without additional effort on your part.

What are the disadvantages of HR outsourcing?
An external team might be unable to provide deeper insights about your company. They might not be as familiar with your company culture and values as an in-house team. This can pose some challenges, especially when internal conflicts occur.

What the Experts Say

CreditDonkey asked a panel of industry experts to answer readers' most pressing questions. Here's what they said:

Bottom Line

Outsourcing HR functions can be a great way to streamline your business operations without going bankrupt.

But it's important to choose an outsourced HR service that can accommodate your company's specific needs (now and in the future). This is especially true since human resources can be complex and tricky to handle.

Make sure you do your research beforehand so you can select the best-outsourced HR for your business.

References

^ Upwork. Minimum hourly and fixed-price rates on Upwork, Retrieved 3/19/23
^ Upwork. Client Marketplace Plan, Retrieved 3/19/23
^ Bambee. Pricing, Retrieved 03/01/23
^ Jumpstart HR. Our Pricing Plans, Retrieved 3/19/23
^ Paychex. Compare Paychex Payroll Packages, Retrieved 3/19/23
^ Gusto. Pricing, Retrieved 3/19/23
^ Sage HR. Pricing, Retrieved 3/19/23
^ TriNet Zenefits. Zenefits Pricing, Retrieved 3/19/23
^ Rippling. Rippling PEO, Retrieved 3/19/23
^ Justworks Justworks PEO Plans, Retrieved 3/19/23

Write to Alyssa Supetran at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

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