Human resources outsourcing, or HRO, transfers defined HR processes or administrative activities to an external service provider. The organization remains responsible for selecting the operating model, retaining required decisions and overseeing service delivery.
Which processes may be outsourced?
- Payroll and benefits administration
- Recruitment coordination
- Employee data and records
- Learning administration
- Leave and attendance processing
- Help desk and lifecycle support
HRO vs. employer of record
An HRO provider performs HR processes for the client's workforce. An Employer of Record legally employs specified workers under its arrangement. The service scope and legal employer role should not be confused.
What should remain with the client?
The client should define policy, decision authority, workforce strategy, sensitive employee actions and oversight. Legal responsibility varies by process and country and cannot be transferred merely by outsourcing administration.
What should the contract cover?
Define populations, countries, systems, data responsibilities, calendars, service levels, approvals, employee communications, incident handling, subcontractors and exit support.
How should performance be measured?
Track accuracy, timeliness, case resolution, employee experience, statutory deadlines, rework and control exceptions. Cost per employee should not be the only measure where errors affect pay or benefits.
