How to Choose the Right HR Outsourcing Partner?


The first step towards success is knowing what you can do on your own and what must be outsourced. HR outsourcing services are a brainchild of such effective business strategies. A majority of businesses outsource HR because it gives them more time and better control of things. They can focus better on business operations. However, choosing the right HR outsourcing partner is easier said than done.

It doesn’t matter whether you are a startup or an established business, you’ll have plenty of HR outsourcing partners to choose from. In either case, you must know the key determinants that separate great HR services providers from others.

With that in mind, we bring you the top tips on how to choose the right HR outsourcing partner for your company.

Complete Solution Provider

HR outsourcing solutions are available in various forms. Some companies are experts in payroll outsourcing, others offer technology solutions such as HRMS/HRIS, some companies take responsibility for offshore hiring, while others are into compliance management.

Whether you are looking for a particular HR service, multiple HR services, or complete HR solutions, choose an HR outsourcing company that offers complete HR solutions. Here’s why:


Suppose you start with outsourcing only one process but realize that you need to outsource other tasks too. In this case, the said company will be able to accommodate your additional requirements. But if the HR outsourcing partner offers only a part of HR services, you may need to find another HR service provider for another HR process.

This will require a lot of time, effort, and research to find a service partner. So, it will be a logical choice to choose an HR outsourcing company that offers all services under one roof.

Evaluate the Staff

The staff at the HR outsourcing partner’s company will work with you. As a result, their efficacy will have a direct impact on your business. From adhering to compliance policies to timely and accurate payroll processing to managing appraisals, benefits, reimbursements, etc., your chosen HR outsourcing company has to look after many things. And all of it will be handled by their staff members.

So, it becomes important for you to check how efficient their staff is. Ask about their qualifications, their experience, their performance, etc. Such information will help you understand how good they will be for your requirements. If they are going to work for you as non-payroll staff, their diligence will have a direct impact on your business. At the same time, if a team is going to handle your payroll processing, you need to know how well versed they are with the legal guidelines and policies.

Business Practices

As much as it may come as a surprise, but the way your HR outsourcing partner works plays a vital role in how your processes will be run. Take staffing for example. If your chosen HR outsourcing company doesn’t take care of their employees, they’ll not be as dedicated to their work as they should be. With a lower employee engagement, there comes high employee turnover. The higher the turnover, the more communication gaps will happen. In the end, you’ll not get as great service quality as you’d expect from them.

You don’t want to lose good talent just because your HR partner didn’t treat them right. Just the way you want them to handle benefits, reimbursements, appraisals, and full & finals for you, the HR outsourcing company should also treat their employees with similar benefits, when and where they are due.

Taxation and Other Government Policies

If your HR outsourcing partner can’t help you stay compliant, then what’s the point of teaming up with them? Why invest all that money in a partnership that doesn’t help you follow government guidelines? If you are falling into statutory and legal issues because your HR outsourcing company wasn’t working the way it should, then you should not be the one to get the short stick.

So, you need to check the track record of the company and see their legal and other compliance backgrounds to see if you are teaming up with the right partner. From tax payments to legal compliance to labor laws, ensure your chosen HR outsourcing partner performs all the legal duties on time.

Cost of Service

We didn’t mention the cost at the beginning of the article because of three key reasons:

  1. Cost is not the only determining factor
  2. Cost is not the top determining factor
  3. You probably already have a set budget

You see, cost plays a vital role as it helps you filter out HR outsourcing partners that are too cheap to be good or completely beyond your budget. Moreover, the price will also help you understand how much the services will cost you when you scale up.

When you talk about the charges, make sure you ask them to explain the price clearly. Get the complete details of breakage to ensure they aren’t charging you unnecessarily. You don’t want to pay for services that you wouldn’t use.

Market Reviews

Businesses run on how clients perceive them. A lot of happy clients and positive reviews on the internet doesn’t mean the company is really hat good. The sad part of every industry is that reviews can be faked, both positive ones and negative ones. Ruling out the fake ones is not easy. But then again, some companies use testimonials of genuine clients.

If you happen to across a company that proudly showcases client testimonials, try to get in touch with the clients. This will help you understand exactly how the said HR outsourcing company helped them.


All the points mentioned above will help you make an informed decision. Remember, when it comes to choosing an HR outsourcing partner for your company, there are many things at stake. Given the fact of how competitive every industry is, HR outsourcing firms will also try their best to bring you on board.  The key lies in understanding which HR services provider you’d like to team up with.

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