Human Resources outsourcing – detailed overview to outsourced HR for UK employers

Last checked and updated on 17 June 2022

If you’re a UK employer considering outsourcing your HR, then this detailed overview is for you. We’ll discuss the advantages and disadvantages of Human Resources outsourcing, as well as who can provide these services and at what cost.

We’ll also look at what functions can be outsourced, and which should still be managed in-house. So whether you’re small business wondering if outsourced HR is right for you, or an established company investigating different HR outsourcing solutions, we have all the information you need!

HR outsourcing advantages and disadvantages

Outsourcing HR can offer many advantages to businesses, including cost savings, improved efficiency and access to specialist expertise.

However, there are also some potential disadvantages to consider, such as loss of control over HR functions and reduced flexibility.

When deciding whether or not to outsource HR, it’s important to weigh up the pros and cons carefully to see if it’s the right decision for your business.

Should HR be outsourced?

There is no one-size-fits-all answer to this question – it depends on the specific needs of your business. If you’re struggling to manage HR in-house, or if you don’t have the internal resources to do so effectively, then outsourcing HR can be a good solution.

Outsourcing HR can also be beneficial if you want to access specialist expertise or improve efficiency within your HR function. However, it’s important to consider the potential disadvantages of outsourcing before making a decision.

Sometimes, a company might seek external HR support when they have a specific staffing issue, such as for disciplinary procedures.

Human resources outsourcing services – what options are available?

There are a range of different HR outsourcing services available, from full outsourcing to partial outsourcing. The level of service you need will depend on the size and complexity of your business, as well as your specific HR requirements.

Full outsourcingPartial outsourcing
This is where all HR functions are outsourced to a third-party provider. This can be a good option for businesses that don’t have the internal resources to manage HR effectively.This is where some HR functions are outsourced, while others are still managed in-house. This can be a good option for businesses that want to retain control over certain aspects of HR, or that only need help with specific tasks.

HR outsourcing functions – which aspects can you outsource, and what should still be managed in-house?

There are a number of different HR functions that can be outsourced, from payroll and benefits administration to recruitment and training.

Outsourced HR functionGood to know…
Payroll and benefits administrationThis is often one of the most popular HR outsourcing services, as it can be complex and time-consuming to manage in-house.
RecruitmentOutsourcing recruitment can be a good way to save time and money, as well as access specialist expertise.
TrainingTraining can be outsourced to external providers, which can be beneficial if you don’t have the internal resources to deliver training effectively.

However, there are also some HR functions that should be managed in-house to ensure that they are carried out effectively. These include:

  • Performance management – This is a critical function that should be managed in-house to ensure that it is carried out effectively.
  • Employee relations – Employee relations should be managed in-house to ensure that any issues are dealt with quickly and effectively.
  • Policy development – Development of HR policies should be managed in-house to ensure that they are aligned with your business goals.

Cost of outsourcing HR

The cost of outsourcing HR will vary depending on the size and complexity of your business, as well as the level of service you require. Typically, businesses can expect to pay between £500 and £5000 per month for full HR outsourcing services.

Human resources outsourcing companies – who are the best providers?

There are a number of different HR outsourcing companies operating in the UK, each with their own strengths and weaknesses. Some of the leading providers include:

  1. Citrus HR – Citrus HR is a leading provider of full HR outsourcing services. They offer a range of services, from payroll and benefits administration to recruitment and training.
  2. Peninsula – Peninsula is one of the UK’s largest providers of HR outsourcing services. They offer a comprehensive range of services, from full outsourcing to partial outsourcing.
  3. CIPD Outsourcing – CIPD Outsourcing is a leading provider of HR outsourcing services, with a range of services available to businesses of all sizes.
  4. XpertHR – XpertHR is a specialist HR outsourcing company that offers a range of services, including payroll and benefits administration, recruitment, and training.
  5. BambooHR – BambooHR is a cloud-based HR outsourcing company that offers a range of services, including payroll and benefits administration, recruitment, and performance management.

Outsourced HR for small business – what are the best options?

Small businesses have a number of different options when it comes to outsourcing HR.

One option is to use an all-in-one HR platform, such as CIPD Outsourcing, which offers a range of services that can be tailored to the specific needs of your business.

Another option is to use a specialist HR outsourcing company, such as XpertHR, which offers a range of services that can be adapted to your specific requirements.

See our list of the top five providers below.

How to choose an outsourced HR solution – what to look for in a provider

When choosing an outsourced HR solution, it’s important to consider a number of factors, including:

The size and complexity of your business – The HR needs of a small business are very different from those of a large multinational. Make sure that the provider you choose is able to cater to the specific needs of your business.

The level of service you require – Do you need a full-service HR outsourcing solution, or do you only need help with specific tasks? Make sure that the provider you choose can offer the level of service you require.

The cost – Make sure that you understand the costs involved before you commit to any outsourcing agreement.

FAQ

What is HR outsourcing?

HR outsourcing is the process of contracting out certain HR functions to an external provider. This can be a good way to save time and money, as well as accessing specialist expertise.

What are the benefits of HR outsourcing?

The benefits of HR outsourcing include saving time and money, as well as accessing specialist expertise.

What are the risks of HR outsourcing?

The risks of HR outsourcing include the potential for problems with communication and coordination, as well as the possibility that the quality of HR services may suffer.

How much does HR outsourcing cost?

The cost of HR outsourcing will vary depending on the size and complexity of your business, as well as the level of service you require. Typically, businesses can expect to pay between £500 and £5000 per month for full HR outsourcing services.

Who are the leading providers of HR outsourcing services?

Some of the leading providers of HR outsourcing services include CIPD Outsourcing, Xperthr, and People Management Solutions.

What are the best options for small businesses?

Small businesses have a number of different options when it comes to outsourcing HR. One option is to use an all-in-one HR platform, such as CIPD Outsourcing, which offers a range of services that can be tailored to the specific needs of your business. Another option is to use a specialist HR outsourcing company, such as XpertHR, which offers a range of services that can be adapted to your specific requirements.

How do I choose an HR outsourcing provider?

When choosing an HR outsourcing provider, it’s important to consider a number of factors, including the size and complexity of your business, the level of service you require, and the cost. You should also make sure that you choose a provider with a good reputation and that has experience in working with businesses like yours.

What should I look for in an HR outsourcing provider?

When choosing an HR outsourcing provider, it’s important to consider a number of factors, including the size and complexity of your business, the level of service you require, and the cost. You should also make sure that you choose a provider with a good reputation and that has experience in working with businesses like yours.

Important – The information provided in our articles is intended to be for general purpose use only, and not advice for you or your business. We strive to publish accurate information, but encourage you to fact-check and seek expert guidance. We recommend that you always speak to a qualified professional to get advice about how to operate your business under your specific requirements and circumstances.