What’s HR Outsourcing?
HR Outsourcing is the practice of delegating one or more aspects of your company’s HR function to an external professional HR services company. This can be as limited as hiring an HR consultant to draft your company handbook to tasking a fractional CHRO with the leadership of your HR function or outsourcing one or more of your discrete HR functions such as FMLA administration, ADA compliance outsourcing, or performance and discipline management.
HR Outsourcing works for many reasons including:
Benefits of HR outsourcing include cost savings and expertise: Average pay for an experienced HR Generalist in a major metropolitan area in the US is $85k-$103k and jumps to $110K-$134K when you factor in a decent benefits package. This doesn’t include the added allocated cost of an HR Director ($168K) or VP of HR ($198k)for oversight. Outsourcing critical functions such as ADA and FMLA administration, labor law compliance, employee relations and performance and discipline management can easily cut this cost in half or less.
HR Outsourcing includes scalability: With HR Outsourcing, you pay only for what you need. You don’t have to carry the cost of an additional HR role when you don’t have enough employees to keep them occupied full time. Through our proprietary processes and experienced staff CHRO can accommodate 10, 100 or 500 extra employees all for an incremental increase per employee. This makes HR outsourcing the ideal solution for growing businesses.
Eliminates Conflicts of Interest and Enhances Confidentiality: Outsourcing HR is particularly effective because it eliminates the conflict of interest that HR personnel can feel, particularly as they build social relationships within your company. When you use CHRO as your HR outsourcing solution, our focus is on preserving our value to the executive team and senior HR staff through efficient execution of deliverables and compliance and leadership support. We have only as-needed interaction with your employees, in the course of providing HR services. We don’t get involved in office politics, the rumor mill or intra-office petty disputes. Finally, our role in supporting HR and executive leadership is often invisible to employees as the work we do is presented as leadership’s or HR’s work product, thus enhancing the effectiveness of the most vital roles in your organization.
Companies outsource HR to reduce risk and improve compliance: Executive management often reports frustration with HR’s failure to stay up to date on current issues or changes in the rapidly changing regulatory landscape. These failings usually come to light when legal counsel gets involved in an issue. While we are not a law firm, we do have an experienced lawyer on our staff who stays up to date on all employment law developments including case law, regulations and statutory amendments.
Enhanced Workforce Rapport: Employees often have a negative perception of HR departments, perceiving them as nothing more than an extension of management. Thus, if they feel negatively about management, that perception extends to HR. This means they are not as forthcoming with valuable information about internal issues that, if left unresolved, can lead to unionization, performance deficiencies, loss of valuable employees, and significant liability for unlawful employment practices.
Contact us to discuss how HR outsourcing can work for your company or complete our Company Diagnostic Questionnaire for a free HR Assessment that alerts you of applicable labor laws, possible risk, and tips on optimizing your workforce processes.
Why HR Outsourcing Is a Smart Fit for Small and Mid-Size Businesses (SMBs)
Once your business reaches around 15 employees (or fewer in some states), you’re subject to a growing list of state and federal employment laws. That’s when the risk increases — and when many SMBs realize their current HR setup isn’t enough.
HR Outsourcing is ideal for companies that:
Need to comply with complex workforce protection laws
Can’t justify the cost of a full‑time experienced HR Director or CHRO
Want to avoid costly legal mistakes and employee‑related disputes
Are growing quickly and need stronger HR structure and leadership
Have an HR generalist or other HR staff who need guidance, training, or executive‑level support
Fractional HR gives you the strategic oversight and legal awareness that most SMBs simply don’t have in‑house. See this article on What Size Company Needs to Worry About Labor Law Compliance.
What HR Outsourcing Looks Like in Practice
A fractional HR partner can step in to:
Train managers to recognize and handle risky employee situations
Take over sensitive HR functions like employee relations or FMLA/ADA administration
Develop your HR team’s skills quickly and effectively
Support your executive team with strategy, goal‑setting, and leadership development
Build practical, compliant processes that protect the business and improve performance
You get the confidence of knowing your people operations are handled by someone who understands both the legal landscape and the realities of running a growing business. Contct us today to discover how we can support your business.
Summary on HR Outsourcing
HR Outsourcing gives your company access to experienced HR leadership without hiring a full‑time employee. Instead of relying on an internal generalist or stretching your managers thin, you bring in an external expert who handles the HR functions that keep your business running smoothly and legally protected.
These services can include:
Leave administration (FMLA, ADA, PTO)
Personnel file audits and compliance checks
Employee relations and conflict resolution
Performance management and coaching
Workplace investigations
Streamlined HR workflows that improve efficiency
Employee handbooks and policy development
Support for junior HR staff — similar to what a CHRO, VP of HR, or HR Director would provide
You get the expertise of a seasoned HR executive, but only for the level of support you actually need. Contact us to discover how we can support your business.