HR Outsourcing Basics

1. The range of outsourcing services it offers;
2. The expertise it has in your industry;
3. Its general HR experience;
4. Its understanding of your priorities;
5. Its available resources;
6. The flexibility of its contracts.

Keep in mind that an HR firm is an extension of your company culture, so try to find one that fits your image. Don't expect a conservative HR firm that works mainly with financial institutions and law firms to be a suitable match for your young, progressive business. It may not attract the right talent pool, and it may not understand your needs well enough to communicate them to prospective candidates.

Depending on the types of things you need to outsource, you'll choose a professional employer organization (PEO) or a hybrid outsourcing firm. Our guide to HR outsourcing using a PEO explains the services that such organizations provide and recommends ways to start searching for a reputable PEO.

Professional Employer Organizations
If you prefer to focus solely on your core business, or if you have no HR capabilities, then a PEO may be right for you.

A PEO recruits, hires, and employs on your behalf. It becomes the employer of record for your employees, whom you essentially lease back from the PEO. It also manages all HR functions for these employees, from employee relations and staffing to benefits administration and payroll. Expect to pay between $90 to $150 per employee per month for a comprehensive PEO solution.