“In-House” HR Functions That Can and Should Be Outsourced

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In-house hr function outsourcing

Human Resources is a field that has experienced a vast amount of transformation over the years. The truth is, in order to stand out in your industry, your Human Resources strategy and functions should be innovative, cohesive, and tactical. What that really means is you have to use your resources in a way that enables your HR functions to help your business reach its goals from a strategic standpoint.

Outsourcing some or all of your HR functions can be a time-saving and cost-effective way to better position your organization strategically for success. If you’re wondering what should and should not be outsourced, let’s discuss some of the top “in-house” functions that might be best to kick out the door.


Hr compliance

First, let’s talk about compliance in general, a primary function of HR.  Businesses are often susceptible to common compliance pitfalls in wages and compensation, with employment laws such as the Family and Medical Leave Act and Americans with Disabilities Act, workplace safety, Form I-9s and other immigration laws, and even employee handbooks. Unfortunately, not understanding your organization’s compliance responsibilities can lead to hefty fines or even a lawsuit.

Compliance happens at a federal, state, local, and industry level, and sometimes, you may be unaware that compliance issues even exist. Having an outsourced HR professional audit your current policies and procedures, Form I-9’s, employment documentation, compensation practices, and other crucial areas can save you thousands of dollars in potential fines and headaches.

When it comes to being compliant, it might be best to leave this to the experts so you can focus on running your business. 

Employee Handbook


Employee handbooks help outline expectations of behavior and performance, ensure employees are treated fairly, and support managers in directing their teams. Even though businesses aren’t legally required to have them, handbooks are a resourceful way to ensure compliance based on your company’s size, location, and industry.

In this document, policies such as non-harassment and discrimination, workplace violence, drugs and alcohol, standards of conduct, and use of company property are clearly communicated, so the tendency for discrepancies and ambiguity is substantially mitigated.

An employee handbook is a critical component of the success and security of your business, and because drafting or keeping one up-to-date can be a daunting task, you might want to consider outsourcing this important business tool.  

Workplace Investigations

Workplace investigations hr outsourcing

Workplace investigations are a vital and necessary HR function to help protect the integrity of your business. If done incorrectly, you could be at risk of a lawsuit or other considerable liabilities. Outsourcing workplace investigations provides your business with the benefit of an impartial investigator, qualified and experienced in conducting a thorough and accurate inquiry.

An experienced investigator with fact-finding skills and an adept understanding of the law can help your business ensure Best Practices in the investigation process, maintain your employees’ confidence in your system, and mitigate any potential risks that an otherwise inexperienced investigator might overlook. Lastly, immediate action is the key to investigations. They should occur as soon as possible and require time and focus to complete.

If you or your managers are busy with other tasks, you might not have the bandwidth to properly conduct a thorough workplace investigation. In this case, it might be best to consider outsourcing this essential function.

Payroll Processing

Payroll administration

Managing payroll is not only highly time-consuming, but it can present a slew of compliance complications. Quite simply, outsourcing this function can save you a chunk of time and money. First, errors made when processing payroll can have financial implications such as fines, penalties, and back pay.

Keeping up with regulations at every level can be challenging, so it’s useful to have an experienced professional at the helm. In addition to being time-consuming, processing payroll is also time-sensitive. Typically, the process involves a plethora of tasks, such as collecting and approving timesheets, reviewing deductions, and analyzing payroll reports for accuracy.

While we all hope for seamlessness every time we run payroll, there are often unique circumstances or changes at the 11th hour that can lengthen this process. The entire payroll process could take hours and even days. Outsourcing this function can not only free up a lot of time, but it can help organizations utilize best practices and protect you from payroll and tax-related risks

Benefits Administration

Workers compensation benefits administration

Speaking of time-consuming functions, rolling out benefits to employees, administering COBRA, enrolling eligible employees onto plans, assisting with claims resolution, and fielding questions about your benefits should also be a consideration for outsourcing.

Benefits administration requires a lot of “day-to-day” activity that can take away from your ability to focus on strategies that are income-generating and create value for your organization. Additionally, it can be highly complex. For example, administering COBRA is no simple feat, and noncompliance can result in detrimental fines. Why take the risk?

Outsourcing your benefits administration can not only lead to a happier workforce and improved communication, but it’s just another example of how outsourcing can give your business another layer of protection from non-compliance

External Recruitment

External recruitment

When finding the best people to add to your team, you want to be vigilant in making sure you place the right candidate, not just any candidate. First, finding a qualified candidate means making sure you have a solid job description in place that will help drive recruitment efforts, keep your hiring practices compliant, and attract the right people for your open positions.

The recruitment process can often be burdensome. Composing job descriptions, reviewing resumes, and screening applicants cuts into valuable time that can likely be better spent elsewhere. Furthermore, once you’ve found the right candidate, the job’s not over!

Drafting an offer letter, conducting background checks, and preparing for the employee’s first day can be equally onerous. Outsourcing this function can also be valuable on an intervallic basis during periods of intense hiring phases when your existing staff might not have enough free time to take on a large-scale recruitment project. It also may prevent high turnover rates that can be costly, interrupt your productivity, and negatively impact workplace morale. HR experts are well-versed in evaluating and finding candidates that are best suited for your organizational needs.  

Performance Management, Team Building, & Training, and Development

Team building

It’s no secret that your employees are a paramount contributor to your organization’s success. Performance management, team building, and training and development are all facets of your business that are imperative in promoting and safeguarding a strong workforce. Not only can a seasoned HR professional guide and advise executives and managers on Best Practices in maintaining a positive workplace culture, but they can also help you stay… you guessed it… compliant!

By ensuring your performance management reviews and procedures focus on core competencies, align employee performance with your organizational vision, and give your managers the tools to conduct performance evaluations correctly, you can alleviate common hazards such as executing inaccurate evaluations or providing unactionable feedback. When done correctly, performance management is one of the best tools for communicating expectations, establishing professional goals, maintaining a positive work culture, and designing training and development opportunities for your staff. This is one area where many businesses can benefit from seasoned HR experience. 


So, which functions should stay, and which should go?

Honestly, every organization has different needs and goals that may help sway this decision. Outsourcing can not only save you time and money, but it can also provide you with flexibility in managing your workforce’s resources and prevent some serious headaches. EnformHR specializes in Human Resource Consulting and Outsourcing. For more information or to discuss whether or not outsourcing HR is right for you, reach out to us!

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Cristina Amyot

Cristina Amyot, SPHR, the firm’s President, leads the HR Services Group. Ms. Amyot graduated with a Bachelor of Arts Degree and Master’s Degree in Human Resource Management from Rutgers University. She holds a Senior Professional in Human Resources (SPHR) certification from the Human Resources Certification Institute and a Life, Accident, and Health Insurance License from the State of New Jersey Department of Banking and Insurance.

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