Human Resource Outsourcing Best Practice Examples

The Milestone Team November 16, 2021
Human Resource Outsourcing Best Practice Examples

Human resources is an important department for every business. After all, people are your best asset, and having a dedicated team that protects and develops your best asset makes a lot of sense. However, many businesses don’t have the time or expertise to set up a comprehensive HR program and so they turn to HR outsourcing to fill this need. 

Let’s take a look at best practices for HR outsourcing examples for how you can get started with your own outsourced HR partnership. 

What are the key HRM practices?

In order to have a successful HR outsourcing solution, you need to understand what functions an HR department typically performs. These include:

Workforce management

The role of HR includes all the tasks around workforce planning, like recruitment, onboarding, and exit processes. The HR department has a crucial role in selecting and developing the best candidates for each role at a company. 

Administering benefits and perks

Finding the right benefits and perks that fits the needs of the employees and the budget of the organization is one of the skills of HR. Once the right fit is found, HR is then responsible for administering and helping each employee understand and take advantage of the  benefits and perks that are available to them.

Advocating for employees

HR is an advocate for the employees, listening to any concerns and helping them align their needs and rights to the needs and rights of the company. 

Performance management

In addition, HR helps the company by working with employees to set performance goals and plan for the future. HR can help develop short-term and long-term goals around workforce management to help the business thrive and grow.

Risk management

There are many different rules and regulations when it comes to employing people, and HR is responsible  for staying in compliance and minimizing risks to a business. HR stays on top of any changes to the law, and can also provide safety training and information to help mitigate these risks. 

Learning and Development 

HR also plays a crucial role in developing employees. Human resources often provides appropriate training, assists with formulating and implementing new policies, and establishes healthy culture.

Culture and Engagement (reference pillar page)

These are just a few of the key HRM practices that HR professionals take on. Many businesses find the cost of having an internal HR department is prohibitive and may even do without these crucial functions. One solution that many small and medium sized businesses turn to is HR outsourcing, as the costs of HR outsourcing are generally lower.

What are the best practices in human resource management outsourcing?

If you’re considering outsourcing your HR functions and are searching for HR best practices in 2021, here are some of the best practices for setting up this type of business relationship: 

Carefully vet your outsourcing provider

It’s important to work with an outsourcing provider who is reliable and trustworthy. After all, you’re turning over some of the most sensitive information that your company holds and trusting them to carry out vital tasks for your business. Finding a company that has an established track record, excellent reviews, and comes with personal recommendations from other businesses is important to make sure that the outsourcing provider you are working with is legitimate and trustworthy.

Look for leadership and personality matches

When you are outsourcing HR functions, you will have to spend a fair amount of time working closely with your service provider. This is a true business partnership, and if you can’t stand the person you’re working with, that’s a big problem. In addition, some styles of leadership don’t compliment each other—find someone who you can see yourself working with and whose skills dovetail with your own. 

Open communication

The most important part of outsourcing is to have an open line of communication throughout the entire relationship. You need an outsourcing partner who is available and communicative in order to garner the results you are looking for. An outsourcing provider who doesn’t respond to emails or is in a rush to get off the phone probably isn’t the right fit for your business. 

Get feedback from employees

Once you’re selected your outsourcing partner, it’s important to get feedback from your employees. After all, they are the ones who are directly impacted by this service. Your employees should be experiencing improvement in different areas of their work life due to the benefits of HR outsourcing, and if they aren’t satisfied, it may be time to seek a different provider. 

Review and assess services

Along with employee feedback, you should set up a regular schedule to examine the services you are paying for and determine if they are still meeting your needs. HR outsourcing is easily scalable, so you should be proactively checking to see if there are areas where you need more coverage or less. 

With all of these best practices in place, you should be able to get the most out of your HR outsourcing relationship and discover the difference that a good HR department can make for your business. We’ve put together a checklist for you to follow as you go through this process. 


Human resources best practices checklist 

Find a reliable outsourcing provider

ロ Look at reviews

ロ Check credentials and experience

ロ Word of mouth recommendations

Leadership and personality questions

ロ Does their leadership style compliment yours? 

ロ Is this someone you would like to work with? 

Open communication

ロ Ask about communication style

ロ Outline your communication expectations

Get feedback from employees

ロ Set up a survey or feedback process for employees

Review and assess services

ロ Add to calendar reminders to review the outsourcing service

Looking for HR best practices? You’ve found them with Milestone

As a trusted HR and Accounting partner for businesses of all sizes and specialties, we know how important it is to have the best practices front and center. When it comes to outsourced HR, our team of highly experienced professionals are here to be your team and resource to lean on. We can provide monthly HR support, strategic HR initiatives, payroll services, employee engagement, and more—all customizable to fit your business needs. Contact us today and let us help you build a people-first business. 

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