Outsourced HR: The Pros and Cons

What is Outsourced HR?

Outsourced HR is a contractual agreement between an employer and an external third-party provider whereby the employer transfers the management of, and processing of key employment practices for certain HR functions to the external provider.

If you are struggling to keep up with HR tasks in your organisation, or simply don’t see a full time in-house HR department as a financially viable option, you may wish to consider outsourced HR.

At HR Solutions, we provide outsourced HR, Payroll and Health & Safety services to save you time, money and resources and allow you to focus completely on your business operations.

The Pros

Outsourcing HR has grown exponentially during the 20 years since HR Solutions was founded. Why? Business owners recognise the need to have HR specialists in their organisation, and relying on an outsourced expert is often more cost-effective than building an in house team.

HR consultancies also have the resource available to them to stay fully up to date with the latest employment law developments, helping to protect your business and manage risk. The advantages of outsourcing will absolutely outweigh the disadvantages, as long as you have a trusted, expert partner in place.

Here is a list of just a few of the key advantages that can have a hugely positive effect on your company:


Outsourcing your HR can be extremely cost-effective. With us, you can have access to a dedicated HR Consultant for as little as £175 per month (depending on company size), or from £125 a month if you require less support.

Outsourcing your HR means that you do not need to fund the salaries of those employed in your HR department, allowing you to save costs and continue to grow your business.


Repetitive and manual tasks are the day-to-day reality for an HR department. As well as long processes such as employment contracts or those processes that relate to employee relations such as performance management or disciplinary, then outsourcing your HR will enable you to free up the time spent on such tasks, whilst saving money.

Outsourcing your HR means that your staff can focus on the more important tasks that directly affect the performance of your company.

Risk Management

Your employment contracts, policies and procedures are crucial to ensuring your business is protected from any employee issues which may arise. Choosing to outsource your HR will enable you to have total peace of mind that your organisation is up to date, on track, and ultimately compliant from a HR perspective.

Working with an HR consultancy will give you access to dedicate support to answer any of your employee relations queries, helping you to understand any potential risks associated with strategic decisions, and how to navigate them correctly. This will once again allowing you to focus on your business.

Skills and knowledge

When you choose to outsource your HR, you are entering into a contract with qualified experts in the field. Essentially this means that you have skipped the standard process of hiring an employee in an HR position who may or may not live up to expectations, for someone that is an expert and will.

Your outsourced HR consultant will also have knowledge on areas such as employment law and regulations that an in-house HR team may not be familiar with.

They’ll also have direct access to a network of support from their colleagues, giving you the confidence that the solutions and advice they provide, will be the right ones.

It’s also important to bear in mind that training your in-house HR team to reach the same level will come at an additional cost.

The Cons

As with any service, there are always two sides to the story. As a provider of outsourced HR, Payroll, and Health & Safety it would be easy to assume that we would only inform you of the benefits that can come from choosing to use one of our outsourced services.

However, just like the service that we provide, we only work on facts and would never misinform a prospect or client for our own gain.

It is important to highlight that, as with any service provider, finding the right partner who will deliver on their promises, is key when moving to an outsourced model.

With that said, here are some of the aspects of outsourced HR that could be viewed as a disadvantage:

A lack of control

In-house HR departments will naturally get to know your employees by being a part of the business. Removing the HR department can sometimes lead to business owners feeling a sense of a lack of control over the procedures within the company. Strong communication will rectify this, though.

Company culture

Somewhat connected to a lack of control, is if outsourcing HR has the potential to affect your company culture. Employees want to feel engaged and listened to.

Of course, by using HR Solutions as your third-party HR provider there will be face-to-face interactions with your dedicated consultant (our HR Enhanced package), however, employees may still need to adjust to the change if they were familiar with the HR team that has now been removed from the business.


The subject of money is an interesting area when it comes to any outsourced service. There will come a time when the business owner must decide whether the most financially viable option is to have an in-house HR team or to outsource.

Initially, outsourcing your HR may seem like an expensive option when in reality, many businesses find the process extremely beneficial, financially.

If you are new to the world of HR and have never employed an in-house HR team then outsourcing may seem expensive. In reality, though, a report from Indeed found that the average HR manager salary is £41,220 per year (£3,435 per month). With this in mind, our HR Enhanced packages start at £175 per month, giving you full access to your own dedicated HR consultant.

An alternative option:

Do you have an in-house HR department or expert, who simply requires additional support and resource? Our HR Knowledge Base may be the solution.

Our HR Knowledge Base is the go-to resource for thousands of business owners and managers across the UK and helps them keep up to date with changes in employment law.

The HR Knowledge Base includes employment law-related template documents as well as access to a range of compliance audits, webinar content, and training material.

All of our template documents come with an easy-to-follow key and detailed guidance to ensure you know what you can edit.

You can sign up to the HR Knowledge Base here

We are here to help

Now that you have a better understanding of the pros and cons when it comes to outsourced HR, we hope that this helps to guide you in making your decision.

If you would like to find out more about our HR service and how we can help your business, you can do so here.

If you have any queries regarding this service or would like to have a chat with a member of the team, contact us today.




Got questions? Looking for advice?


Got questions? Looking for advice?


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