As the business environment continues to evolve, more companies are turning to human resources outsourcing to control costs, introduce operational efficiencies, and focus on strategic priorities. According to a Deloitte study, 52% of companies outsource business functions and 43% outsource HR. More than half of companies outsourcing do so to control costs, improve business strategies and shift operating models, and gain access to new capabilities. Therefore, it is important to understand the cost of outsourcing human resources as well as how it compares to hiring in-house talent.

cost of outsourcing human resources
How Much Does an HR Employee Cost?

For companies looking to build an HR team, bring on additional staff, or fill vacant roles, hiring employees can be expensive. The Society for Human Resource Management estimates that the average HR hire costs $4,700 based on benchmarking data. However, companies can easily pay more for qualified talent. Some estimates place the cost to hire a new employee at three to four times the annual salary of that employee. If the average salary of an HR professional with 4 to 6 years of experience is $75,323, according to Glassdoor data, hiring costs can reach as much as $301,292 for one employee. This includes both the hard and soft costs that result from time taken away from business priorities to screen applications, conduct interviews, and other processes needed to support the hiring process.

How Much Does HR Outsourcing Cost?

There is not a one-size-fits-all answer to this question. The cost of outsourcing human resources can depend on many factors, such as the type of HR outsourcing and the level of service. For example, choosing a Professional Employer Organization (PEO) is typically the most costly option, but is not easily scalable, offers limited support, and no strategic help. In contrast, an Administrative Services Organization (ASO) can be cost-effective and scalable for companies with fewer than 75 employees. A Human Resources Outsourcer (HRO) like Corban OneSource is generally the most cost-effective and scalable option for companies with 75 to 6,000 employees.

An HRO provides a wide range of advantages, such as benefits administration, payroll, and compliance with employment and payroll regulations. At Corban OneSource, we operate using a variable cost model and companies are charged per employee per month. This allows for greater flexibility over traditional hires: we can scale service up or down as your needs change. In a turbulent economy, this means you don’t have to worry about laying off HR employees. When you’re growing, avoid high recruiting and onboarding costs while ensuring your company’s HR needs are easily met.

HR outsourcing is a convenient and flexible way to manage and control HR costs, improve employee engagement, and receive strategic guidance without sacrificing quality. For companies with 75 to 6,000 employees, Corban OneSource is a reliable HRO partner that allows companies to focus on their core competencies while expertly covering all HR needs. To learn more about how we can help you manage the cost of outsourcing human resources, contact the experts at Corban OneSource today.