May 6, 2022
10 Most Popular Outsourced HR Functions

Perhaps you work with an accounting firm to keep your books and finances in order. Maybe you invest in a marketing agency to ensure a cohesive brand presence and spread the word about your organization. 

So, why not outsource one of the most crucial areas of your business: Human resources? 

Whether you have a new or established business, there are likely a handful of HR functions that you don’t have the time, knowledge, or desire to do. That is understandable—the field has many nuances, requiring continuous training and education hence why many employers opt for HR outsourcing.

If you’re exploring HR services, you may be wondering what your options are and how to determine which tasks you should leave to the experts. Below are 10 of the most commonly outsourced responsibilities.

1. Payroll Services

Payroll continues to be THE most popular outsourced HR function! It is almost too easy to make costly errors that can lead to tax penalties or even open up your company to lawsuits. It’s simply not worth the risk.

Your payroll service provider can take care of: 

  • Payroll calculation
  • Taxes
  • Producing and delivering checks
  • Direct deposit
  • Envelope stuffing
  • Automatic signatures
  • W-2 forms

You’ll meet filing deadlines and deposit requirements when you outsource the payroll function. Plus, payroll companies have the latest and most efficient technology—meaning they can process everything much faster than your in-house team.

The IRS recommends choosing a payroll provider that uses the Electronic Federal Tax Payment System (EFTPS), which allows you to confirm provider payments. 

2. Employee Benefits

Like payroll, managing employee benefits is a job in and of itself. You have to worry about employee healthcare, pension and retirement plans, work-life benefits like employee childcare, employee assistance programs and counseling, and even additional options like HSAs and FSAs.

When you partner with an HR consultant, they can:

  • Help you find the most affordable options
  • Respond to employee concerns and questions
  • Manage program enrollment
  • Process changes in participation status
  • Monitor benefit history and eligibility

Bottom line: Outsourcing your benefits administration can help your organization stand out with a unique and attractive benefits package. BlueLion works with fantastic insurance brokers to provide you with the best options.

3. Recruiting & Hiring

Save your leaders and managers significant time by taking much of the recruiting and hiring process off their plates. A complete outsourced HR firm can help you: 

  • Develop job descriptions
  • Post open positions on job boards
  • Review Resumes
  • Interview candidates
  • Provide feedback and suggestions

When you do hire new employees, your HR consultant can also ease the onboarding process by: 

  • Handling new hire paperwork
  • Setting them up on your payroll system
  • Discussing company policies and procedures with the new hire

Growing your team entails more than simply finding skilled candidates—employers must also follow legal requirements throughout the process. Your HR company will ensure your job descriptions and hiring practices comply with the Fair Labor Standards Act (FLSA) and the Americans with Disabilities Act (ADA). They’ll help you spot top talent and establish positive relationships with candidates. 

4. Compliance & Risk Management

There are specific federal and state regulations employers must follow. This could also vary depending on your industry, type of business, and business size. Your HR consultant will ensure you comply with:

  • The Family and Medical Leave Act (FMLA)
  • Workers compensation
  • Unemployment
  • ADA
  • Department of Labor (DOL) requirements and audits

In addition to HR functions like payroll, benefits, and hiring, they will support you in critical areas, including: 

  • Employee handbook creation/updates
  • Policy development
  • Employee documentation
  • Safety programs and guides

Employment laws change constantly and are challenging to keep up with. If you fall out of compliance, your business could be at significant risk of penalties and litigation.

5. Drug & Background Screening

While there is no federal requirement for most private employers to have a drug-free workplace policy, you may feel more comfortable conducting drug screenings for new hires to ensure the safety of your team. The same goes for background checks

And it may come as no surprise that there are specific laws about how far employers can investigate. Not to mention, there are various types of drug tests and background checks. So how do you know which you should use and how to do so lawfully? 

Work with a third-party provider to manage the process. Many HR consultants oversee and partner with third-party companies that take care of these processes, ensuring a safer work environment. 

6. Workplace Conflicts & Investigations

Workplace conflicts and investigations often go hand-in-hand with compliance and risk management. These issues can escalate, especially if you don’t address them. This could subject your company to costly lawsuits.

Whether you have employees who don’t get along and disrupt the workplace or you’ve received a complaint against a team member for harassment, sexual harassment, or discrimination, it helps to have a neutral third party who will come to your worksite and handle the issue. Your dedicated HR consultant will speak with all necessary parties, take care of documentation, and communicate with your legal team and insurance company.

7. Workforce Administration

To save your team even more time, you can outsource essential HR functions, known as workforce administration. The Society of Human Resource Management (SHRM) defines this area as: 

  • Development, maintenance, and operation of HR information systems (HRIS)
  • Employee and manager policy and procedure support
  • Employee and manager self-service and customer service
  • Employee data management and records retention

Workforce administration is often the foundation of HR outsourcing, done in conjunction with compensation administration and performance management. 

Hand off all that HR busywork to experts who will handle it much more efficiently so you and your team can get back to doing what you do best!

8. Performance Management

Many employers dread the performance management process. It’s time-consuming and not always entirely positive. However, you can enjoy smoother performance reviews, conduct regular and constructive employee feedback, and foster employee morale with suitable systems in place. 

If your leadership team is overwhelmed, an HR consultant can help you: 

  • Design a performance appraisal system
  • Work alongside managers and leaders to conduct employee performance reviews
  • Maintain employee records/files
  • Manage performance issues

Best of all, an HR firm will do extensive research into your company, goals, and each position and department. For example, BlueLion will build you a custom monthly, quarterly, or annual review process that evaluates both the employee’s and the organization’s goals. 

9. Employee Rewards & Recognition

Speaking of performance management, when employees do well, you will want to reward them and show your appreciation for their dedication and hard work! 

Rewards and recognition programs can boost employee morale and incentivize team members in areas such as productivity, sales, workplace safety, work anniversaries, and accomplishing major tasks or projects. 

Although they sound like fun, reward programs can eat up a lot of time and energy. You may have several tasks, such as ordering plaques and certificates. Even issuing bonuses requires specific accounting and administrative work. As your team grows and evolves, it may become more complex. 

Outsource these tasks to an HR consultant so they’re handled smoothly—and so you have one less thing to worry about. 

10. DEI & Anti-Harassment Training

Diversity, equity, and inclusion (DEI) and anti-harassment training are critical to creating a safe, welcoming environment for all employees. Bring in a neutral party to conduct these training sessions and gain an outside perspective.

BlueLion will engage your employees in modern, realistic discussions and scenarios as your HR consultant. We will educate your team on what to look for, how to handle a conflict when it arises, and how to create your ideal workplace culture. Forget those cringeworthy old-school videos demonstrating bullying or sexual harassment! Your employees will become more culturally competent, empathetic, and self-aware while building trust with one another. 

Now that you’re familiar with the 10 most popular outsourced HR functions, which ones would you remove from your plate first? Consider where you currently experience people and operations bottlenecks, and evaluate from there.

If you’re ready to invest in a complete outsourced HR firm or have crucial projects and training you need assistance with, contact us today at 603-818-4131 or Our HR consultants will help you find the best solution for your organization.

The information on this website, including its newsletters, is not, nor is it intended to be legal advice. You should contact an attorney or HR specialist for advice on your individual situation.