How Much Does HR Outsourcing Cost? [Per Employee, Month, Year]

Are you considering hiring an HR outsourcing company? Human resource departments are responsible for various tasks, including payroll management, benefits administration, recruiting, and compliance. An experienced HR outsourcing company can help your business save time, money, and resources.

HR outsourcing companies offer many services, including payroll processing, tax filing, employee recruitment, onboarding, personnel record keeping, legal consultation, communication between managers and employees, benefits administration, and dispute resolution.

But how much will it cost to hire an HR company?

Our article looks at the costs associated with hiring an HR outsourcing company. It helps you make an informed decision on whether or not this is the right move for your business and the expense per employee monthly and yearly.

How Much Does HR Outsourcing Cost Per Employee?

Experts from HR Assured say that the cost of HR outsourcing can range from $75-$200 per employee per month. Of course, you will also have to pay a set-up fee due to the nature of setting up the agreement with an outsourced provider.

Outsourcing represents a great way to lower the strain of managing HR tasks. Now, paying for such a service will usually draw many benefits, but many of those benefits highly depend on the price you have to pay.

The costs vary significantly, depending on the type of HR services you need and the number of employees covered. For instance, if you have 15 employees, a monthly payroll service for $100 per employee would come to $1,500 a month. An employee assistance program for the same number of employees at $30 per person per month would cost an additional $450 a month for HR outsourcing.

It’s important to note that some HR outsourcing providers offer discounts for long-term contracts or larger groups of employees. Therefore, before making your decision, shopping around and comparing quotes from different HR companies is essential.

How Much Does HR Outsourcing Cost Per Month?

In most cases, the cost of HR outsourcing is calculated monthly. On average, small to mid-sized businesses expect to pay around $75 – $150 per employee per month.

Further, it can be broken down into the cost of medical insurance, payroll services, and other HR services such as recruitment, compliance monitoring, and training. Most HR outsourcing companies offer a better rate for larger businesses with more than 200 employees and could even provide a flat fee for their services.

While paying monthly, the HR outsourcing expenses are still calculated by the yearly costs. To get a clearer picture, an HR outsourcing company charges $100 per employee per month with ten employees. That means you’re paying $1,000 per month and $12,000 per year to outsource HR responsibilities.

How Much Does HR Outsourcing Cost Per Year?

You also have to consider the yearly costs of HR outsourcing. If you spend $100 per employee monthly and have ten people on your team, it costs $12,000 annually! (i.e., $1,000 per month x 12 months = $12,000). However, when outsourcing HR services, you should also consider discounts associated with long-term contracts or larger employee numbers.

The annual cost of HR outsourcing can also greatly depend on the type of services you need. So, be aware of all the costs and fees to understand your annual HR outsourcing costs.

While annual costs can vary from business to business, you should expect to pay between $1,000 and $12,000, depending on the size of your workforce. Moreover, the cost can also increase if you outsource employee development and training services.

How To Minimize HR Outsourcing Costs?

To minimize the cost of HR outsourcing, it’s important to shop around for the best prices and research the range of services offered. It’s also a good idea to set realistic objectives before outsourcing and have specific outcomes in mind.

Additionally, ensure all your contracts are flexible enough to accommodate company size or scope changes. Lastly, capitalize on discounts offered by HR outsourcing providers when signing long-term contracts and increasing the number of employees.

If your goal is to minimize the expenses for the outsourcing project, prepare to do research and be hands-on with the process. The right approach can save considerable amounts of money in the long run.

It’s essential to understand the cost of HR outsourcing per month and per year to make the best decisions for your business. 

HR Outsourcing Cost Summary

Overall, HR outsourcing can be a great way to reduce costs, but it’s essential to understand the associated expenses before deciding. Compare quotes and consider any discounts available for long-term contracts. Knowing how much you will pay per employee, per month, and per year for HR outsourcing can help you make the right decision for your business.

Companies should expect to pay around $75 – $150 per employee per month; however, discounts may be available when signing long-term contracts. The cost of HR outsourcing per year can range between $1,000 and $12,000, depending on the size of your workforce.