Choosing the Right HR Outsourcing Company: 7 Factors You Can’t Afford to Overlook

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Managing and supporting your employees is critical to running a successful organization with a healthy workplace culture. Balancing HR tasks and business growth during economic downturns can be challenging, especially when employee support is a full-time job in itself. In order to help ease some of that workload without sacrificing the integrity of the business, or without negatively impacting employees, many companies turn to outsourcing some or all of their HR functions.

Working with an HR outsourcing company is one of the most effective ways for organizations to do more with less, contain costs, foster a positive workplace culture, ensure HR and payroll compliance, and offer competitive benefits programs. But, selecting the right HR outsourcing partner can be overwhelming. It’s crucial to take the time and conduct due diligence to ensure that you make the right decision, as it can significantly impact your company’s success and, most importantly, the well-being of your employees.

We’ve put together this article to help guide you through the process of selecting the best HR outsourcing company for your business.

We’ve outlined 7 key factors to consider when evaluating potential companies, including their expertise, technology, credentials, pricing, customer service, and more. By considering these 7 factors you can make an informed decision that will help streamline your HR functions, save you time and money, and ultimately contribute to the success of your business and people.

Let’s get into it.

1. Determine Your HR Needs

Assessing your HR needs is key to selecting the right HR outsourcing company. HR requirements differ depending on the company’s size, industry, turnover rate, pay groups, employee type (full-time, part-time, contract etc.), organizational structure and more. Small businesses may only need basic functions such as HR administration, payroll processing, and benefits administration, while larger organizations require a more comprehensive solution that includes leave of absence administration, international service (for international employees), performance management, training & support, recruiting, employee relations, and compliance management.

Once you’ve identified your HR needs, search for HR outsourcing companies that specialize in the areas that matter most to your business. Focus on companies that have experience working with businesses similar to yours and reach out to them to schedule a consultation to discuss if there is a mutual fit. Choose a provider that can customize its services to meet your unique needs and provide the level of support necessary for the success of your business and your people.

2. Do Your Research

Choosing the right HR outsourcing company for your business can be overwhelming, but there are steps you can take to simplify the process.

  1. Create a list of potential providers that offer the HR services you need.
  2. Look for companies with experience working with businesses similar to yours.
  3. Check customer reviews, NPS scores, and testimonials to get a sense of their reputation and level of customer satisfaction.
  4. Consider their technology and tools, such as integrations with other software you use to run your business.
  5. Take a look at years in business. That is not to say that new HR outsourcing companies aren’t qualified or provide great service, but it’s important to consider nonetheless as this is a complex space with complex needs.
  6. Review their social media channels, content offers, videos, and blog posts to see what they are sharing. and posting that aligns with your needs.
  7. Speak to trusted colleagues that are currently with an HR outsourcing company or have worked with one in the past.
  8. Speak to an HR leader or HR solutions advisor to get more information about how they manage their more specific HR support services. Don’t just speak to a sales rep.

Ultimately, take your time and choose a provider with a strong reputation, a track record of success, and the expertise and resources to meet your specific HR needs.

3. Flexible All-in-One Technology

Technology is a critical aspect of HR outsourcing, and it’s important to choose a provider that offers a user-friendly, secure, and compliant technology platform that is not tied directly to the provider. Many HR outsourcing companies offer platforms to manage HR functions such as payroll and benefits administration but you give you access to that platform if you are working with them. This makes it complicated and sometimes downright impossible to leave without a massive disruption to your business. Choose an HR outsourcing company that partners with industry-leading technologies, such as ADP, but ultimately the license to that technology is yours, making it easy to move on if and when you need to.

It’s important to ensure that the chosen platform has key integrations depending on your existing systems and your business’s specific needs. You should also verify that the platform is secure and compliant with data privacy regulations to protect sensitive employee information.

Taking the time to evaluate the provider’s technology platform can help you make an informed decision and ensure a smooth transition to outsourcing your HR functions.

4. Review the Contract Length and Services Included

Understanding the contract terms, length and services included is crucial. Before signing a contract, review all the terms in detail to ensure that it meets your business’s specific needs. The contract outlines the level of service you can expect, including response times, overall services provided, penalties for early termination, implementation fees, onboarding timeline, issue resolution and more. Make sure that it aligns with your business objectives and that you’re comfortable with the level of support being outlined.

It’s also essential to clarify any questions or concerns you may have to avoid with more than just the sales rep or account manager. Speak to their HR advisors, customer success manager, or other senior people at the company to ensure no misunderstandings occur and ensure a successful partnership.

A well-crafted contract can provide you with the peace of mind and confidence that you have chosen the right HR outsourcing company for the short or long term.

5. Review the Pricing Structure

It’s essential to understand the pricing structure and any additional fees that may apply. Most providers charge a fee for their services, which can vary based on the services provided and the size of your business. It’s important to look for transparency in pricing and avoid companies that have hidden fees or charges. Ideally, choose a company that provides modular services that you can easily add or remove to your overall service offering when you need to. The fact is, businesses change, and sometimes that change can happen quickly and without warning. Being able to work with an HR outsourcing partner that is as flexible and agile as your business requires, is critical.

Make sure you have a clear understanding of the costs associated with the services you need and that the pricing structure aligns with your budget. It’s also important to ask the provider about any potential additional costs that may arise, such as fees for customized services or employee support.

A transparent pricing structure can help you avoid unexpected costs and make an informed decision when choosing an HR outsourcing company.

6. Consider the Company’s Culture and Values

The culture and values of an HR outsourcing company can significantly impact your business relationship. It’s essential to choose a provider that aligns with your company’s values and goals. Look for a company that values transparency, integrity, client relationships, accountability, and customer service. You’ll want to ensure that the provider has a positive reputation in the industry and a track record of ethical behavior.

Consider the provider’s approach to customer service, communication, and conflict resolution. A provider that prioritizes building strong relationships and providing exceptional service can help ensure a successful outsourcing experience.

One thing that most businesses don’t always consider when choosing an HR partner is how they treat their employees, and what type of company culture the vendor has. Are they drinking their own kool-aid, so to speak? Their culture and employees’ satisfaction are big indicators of how they will approach supporting your business and your employees. Look for awards like Great Place to Work, or Employee Satisfaction awards.

Choosing an HR outsourcing company that aligns with your values and culture can contribute to a positive partnership that benefits both your business and employees.

7. Evaluate the Company’s Customer Service

Customer service is critical. Look for a provider that has a dedicated support team that also includes a dedicated technical support team, available to answer your questions and resolve any issues that arise. It’s important to ensure that the provider offers ongoing support and training to help you get the most out of their services. Evaluate the provider’s approach to communication and responsiveness to ensure that you receive the support you need when you need it.

A provider that prioritizes customer service and support can help you streamline HR processes and focus on growing your business and looking after your people. Choosing an HR outsourcing company that provides exceptional customer service can help ensure a successful partnership and long-term success.


Choosing the right HR outsourcing company is critical to the success of your business and the wellness of your people. By understanding your HR needs, researching potential companies, and evaluating their technology platforms, contract terms, pricing, culture, and customer service, you can make an informed decision that will benefit your business for years to come.

Remember to take your time and ask plenty of questions before making a final decision. Keep in mind that HR outsourcing companies are not a one-size-fits-all solution, and you should select a provider that can customize their services to meet your unique needs and provide the level of support you require to succeed.

With the right HR outsourcing company by your side, you can focus on growing your business while leaving the HR responsibilities to the experts.

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