How Your Business Can Save Money By Outsourcing Your HR Functions


Outsourcing your HR functions is a good option if you’re looking to decrease your operational costs and save money for your business.

In fact, in general, many companies look at outsourcing as an alternative to hiring employees into their business in order to manage tasks and functions in a cost effective way. This isn’t limited to HR functions too; areas and expertise that involve writing, design, research, and maintenance are outsourced — especially if the business is not directly involved in these industries. For instance: a food and beverage company may outsource PR and marketing functions since this is an area the business has no expertise in and yet is also important for the profitability of the operations. This way, the work gets done and the company wouldn’t have to worry about looking for personnel to handle the functions (and, in turn, worry about salary and benefits).

The same goes for hiring HR companies to do your personnel management. HR functions are necessary in any company, but it can also be very costly if you do it yourself. And if you do it yourself (or delegate the task to your senior employees or managers), you will end up doing a task you have to experience with or expertise in. This could mean poor quality of work, not to mention you lose valuable hours that could have been used to focus on other business tasks and opportunities.

This in itself saves you money already. But there are more ways hiring HR companies can be cost effective for your company.

You save money on salary. This is a no-brainer. Naturally, you when you outsource your HR functions, you cut costs on salary.

Keeping a human resources personnel or department can be quite expensive; this entails regular training (to make sure your staff is well-versed in workforce policies and employment laws). Outsourcing offers lower costs than if you retain an in-house human resources staff.

Many believe that having in-house HR is more effective. But this isn’t always the case; small and medium sized companies, more often than not, do not need in-house HR personnel. Outsourced HR is more efficient and cost effective in many cases.

You save money on software. HR is not simply a matter of handling people; it’s also a department that handles many aspects of employment, including payroll, attendance, and performance. And these functions often need software.

Hiring HR companies mean you wouldn’t have to worry about the software needed to do HR functions. If you have in-house HR, you don’t only have to hire people — you also have to provide your HR staff with various software and hardware. These could be expensive.

You save money on consolidation. Outsourcing HR means consolidating all the personnel management functions. Your service provider will worry about hiring people, doing the payroll, supplying paychecks, fixing employee benefits and unemployment claims, dealing with legal concerns — all at a fixed price, with no additional cost to you. By consolidating the HR duties to one service provider, you can save money by asking for service bundles.

For more info about outsourcing to HR companies, visit
You can save more money when you outsource some of your HR functions. For more info on how to do this, visit

Heather McWilliams

The author Heather McWilliams