6 Best HR Outsourcing Services for Small Businesses in 2024
Human resources (HR) outsourcing is the delegation of specific HR functions and activities to an external provider. The best HR outsourcing services for small businesses provide several benefits to employers, such as better HR processes, improved compliance, and cost savings from not having to directly hire an HR manager.
For this guide, we reviewed 14 companies that offer HR services for small business owners looking to outsource HR administration. We then narrowed the list down to our top six recommendations.
- Bambee: Best overall HR outsourcing service
- Justworks: Best for managing payroll and employee benefits
- Rippling: Best all-inclusive HR, IT, and PEO solutions
- TriNet: Best affordable HR and payroll solutions
- ADP TotalSource: Best for strategic HR management
- Papaya Global: Best for companies with international staff
Top HR Outsourcing Services Compared
Why You Can Trust Us: I evaluated 16 HR outsourcing services (from the least to the most popular) based on different criteria, including their pricing, the HR services they provide, HR tools they have, reporting capabilities, ease of use, and what real-world users say about them. Within each criterion, I further evaluated each provider across 30 data points. After this thorough analysis, I identified the top six HR outsourcing providers that excel in these areas.
HR Staff Writer at FitSmallBusiness
Continue reading for an in-depth look at our six best HR outsourcing services. However, if you are looking for inexpensive, independent HR consultants to work on simple HR projects or simply want the end-to-end HR compliance solution of HR software, partnering with an HR outsourcing service provider might not be the best option. Expand the section below for other alternatives.
Bambee: Best Overall HR Outsourcing Service
Pros
- It offers a dedicated HR manager.
- It has a reasonably priced starter plan.
- It tracks HR compliance and documents requiring electronic signatures.
Cons
- Starter tier only comes with email and chat support.
- It charges setup fees for higher plans.
- Guided payroll solution is a paid add-on.
Bambee
Starter plan (no employees yet): $99 per month; zero setup fees
Higher plans (with employees):
- 1–4 employees: $299 monthly plus a $500 setup fee
- 5–19 employees: $399 monthly plus a $500 setup fee
- 20–49 employees: $499 monthly plus a $1,500 setup fee
- 50–70 employees: $1,299 monthly plus a $2,000 setup fee
- 71-plus employees: Custom-priced
- Dedicated HR manager: Bambee’s dedicated HR manager provides expert guidance as you set up your HR policies and procedures. Your dedicated HR manager provides full remote support and coaching if you need assistance navigating a sensitive employee issue or if you want clarity on labor regulations. Bambee’s online system also allows you to easily connect with your HR manager to raise requests (such as policy reviews) via chat or email. You also get phone support—provided you subscribe to its higher tiers.
- HR Autopilot and compliance support: Bambee’s HR autopilot solution helps ensure that your HR policies are up-to-date, signed by your employees, and reaffirmed twice a year. Plus, your workers’ attendance at mandatory training (such as workplace safety and sexual harassment sessions) will be tracked, and you’ll even be notified of your team’s progress.
- HR audits: Bambee conducts audits to help you identify HR gaps and formulate action plans to address the gaps. Its system even has an “HR Compliance Score” tool, providing an estimate of your HR’s general health (either excellent, good, or poor) based on the audit.
Since Our Last Update: Bambee has a range of new pricing plans tailored to suit the needs of businesses of all sizes. From eight pricing tiers, it now has six pricing tiers, removing the higher-priced ones.
Bambee is our top recommended HR outsourcing service because it offers solid compliance support and a dedicated HR manager to help you navigate the intricacies of handling HR and managing employees—from onboarding to conflict resolutions and terminations. It also has an online platform to help you track HR documents, staff performance, and training certifications.
Its “Employee Voices” tool even provides your staff with an online space where they can share their concerns, express appreciation, and raise workplace issues either anonymously or publicly. Take note, however, that it isn’t a confidential third-party hotline. And, while Bambee can help you pay employees, this service is a paid add-on (unlike Rippling, Justworks, and ADP TotalSource).
Bambee has a secure “cabinet” that stores all of your digital documents. (Source: Bambee)
Justworks: Best for Managing Payroll & Benefits
Pros
- It provides access to enterprise-level benefits from major insurance companies plus 401(k).
- It is IRS- and ESAC-certified
- It has a wide range of customer support channels.
Cons
- It has preset payout schedules for hourly and nonexempt salaried employees.
- It has limited HR services.
- Time tracking is a paid add-on
- Payroll: $50/month base fee plus $8 per employee monthly
- PEO Basic: $59 per employee monthly for the first 50 workers; $49 per employee monthly for the 50th worker onward
- PEO Plus: $99 per employee monthly for the first 50 workers; $89 per employee monthly for the 50th worker onward
Add-on
- “Justworks Hours” time tracking solution: $8 per employee monthly*
- International Contractor Payments: $39 per paid contractor monthly**
- Employer of Record (EOR): $599 per employee monthly**
*Available in Payroll, Basic, and Plus plans
**Available in Basic and Plus plans only
- Low-cost PEO: Justworks’ affordable PEO plans are just one of the things that I appreciate about this provider. Its starter tier is less expensive than Bambee’s—$59 vs. $99—and it has features that Bambee doesn’t offer, such as employee benefits and vendor payments. Plus, its PEO is IRS- and ESAC-certified, which is considered a gold standard in the PEO industry.
- Payroll services: While Justworks can handle payments for hourly and salaried employees with ease, it also supports payouts for vendors and contractors. Apart from unlimited and automated pay runs, its payroll solution seamlessly syncs with its time tracking tool (Justworks Hours), so you can easily capture the actual number of hours that your employees worked in a payroll period.
- Full-service support: Justworks provides 24/7 customer service and support to its clients. You can contact its support team via phone, email, chat, Slack, and SMS. Its team of HR experts can even help you set up benefits plans, run payroll, and update your company information in its system.
Justworks is excellent for companies looking for a reasonably priced PEO to handle essential HR administrative tasks. It also made our list of the best payroll services for small businesses. Apart from full-service payroll, it provides access to enterprise-level benefits plans (such as medical, vision, and dental insurance) and wellness perks (like fitness memberships) at affordable rates.
It provides compliance support by handling payroll tax filings, payments, and reporting for you. Justworks also ensures that you are covered and in compliance with workers’ compensation, ACA filings, and state unemployment insurance. While it provides HR advisory services, its certified HR professionals won’t help you create HR policies and an employee handbook like Bambee’s HR experts will.
Aside from HR advisory services, Justworks has online help and resource centers to keep you up-to-date with the latest employment regulations. (Source: Justworks)
Rippling: Best All-Inclusive HR, IT & PEO Services
Pros
- Modular HR, payroll, and IT solutions connect seamlessly with each other.
- Users can easily switch its PEO solution on and off.
- It can integrate with 500-plus third-party software.
- It offers global payroll and EoR services.
Cons
- Pricing isn’t fully transparent for all of its products.
- You can’t purchase other modules without buying the core Rippling Unity platform first.
- It gets pricey as you add features.
- HR help desk option with phone and email support costs extra.
Rippling PEO services: Custom-priced
HR payroll plan: $35 plus $8 per employee monthly*
- Includes workforce automation, analytics, onboarding and offboarding, time tracking, full-service payroll, tax filing services, and software integrations
Other Per-module Costs
- App, device, and computer inventory management: Custom-priced
- Benefits administration: Pricing varies, depending on your insurance broker
- HR help desk: Custom-priced
*Pricing is based on a quote we received.
- Healthcare concierge services: What sets Rippling’s PEO services apart from similar providers is the expert healthcare support for its clients’ employees. Team members who have questions about their benefits won’t need to contact you; they can directly call or chat with a healthcare professional for support. This is made possible through Rippling’s partnership with Rightway.
- Intuitive platform: Similar to ADP TotalSource, Rippling’s PEO services include access to its intuitive online platform, which comes with robust workflow automation tools and a wide range of solutions for managing benefits, payroll, employee attendance, IT software, and more.
- Flexible PEO: You can easily turn Rippling’s PEO solution off if you no longer need its PEO services and then start using its HR platform. This is unlike ADP TotalSource and Justworks, which don’t have a flexible PEO option.
We recommend Rippling for small businesses needing all-inclusive HR services. Its robust integration options and integrated HR, payroll, and IT solutions are designed to streamline employee management processes—from onboarding new hires to issuing company computers and paying workers. It even offers global payroll and EoR services if you need to hire and pay international employees. In addition, its PEO solution helps manage your HR processes while ensuring compliance with federal, state, and local labor regulations and laws. Rippling tops our list of the best HRIS for small businesses, as well.
Similar to ADP TotalSource and Justworks, you are granted access to Fortune 500-level benefits plans like medical, dental, and vision insurance. Commuter benefits are also included, as are EPLI coverage and ACA/COBRA administration. However, it lacks the dedicated HR consultant that Bambee offers—Rippling only provides HR advisory services.
With Rippling PEO, you and your employees can access enterprise-level benefits at more reasonable rates. (Source: Rippling)
TriNet: Best Affordable HR and Payroll Solution
Pros
- It offers affordably-priced plans.
- Time tracking and scheduling are included in all plans.
- It offers employee self-onboarding with automated solutions.
Cons
- Payroll, HR advisory services, recruiting, and benefits administration are paid add-ons.
- Advanced HR tools are in higher-tiered plans only.
- Medical and dental plans are not available in some states.
- Essentials: $10 per employee per month
- Growth: $20 per employee per month
- Zen: $33 per employee per month (payroll is included in this tier)
Add-ons
- Payroll processing: $6 per employee per month
- Benefits administration: $5 per employee per month*
- Recruiting (via JazzHR): Starts at $35 per month
- HR advisory service: $8 per employee per month
*Free if managed by a TriNet broker partner
- HR support: TriNet gives you access to HR experts that can help you navigate complex HR issues, answer questions, and provide strategic advice tailored to your specific needs.
- Payroll: TriNet offers a seamless approach to tax documentation with its paperless W-2 system. Additionally, it’s the only provider on this list that allows employees to directly import their W-2 into Turbo Tax. It also calculates and manages your payroll as well as handles your local, state, and federal taxes.
- Robust reporting options: TriNet has extensive reporting capabilities from payroll summaries to employee attendance. It also generates comprehensive reports, such as garnishment audits, deductions, and tax liabilities.
TriNet gets the spot as the best affordable HR and payroll solutions on this list with a starting price of $10 per employee per month. With just the basic plan, you have access to time tracking, scheduling, onboarding, and employee management features. If you want to access its performance management, compensation management, and employee engagement features, they are only available in its higher tiers.
Just like Justworks and ADP, TriNet has a PEO with IRS and ESAC certifications. What gives it an edge against its competitors, however, is that its PEO can be customized based on your industry. This customizability ensures that businesses receive industry-specific support and enhances operations efficiency.
TriNet’s mobile app allows employees to access their information or file their PTO all in one place. (Source: TriNet)
ADP TotalSource: Best for Strategic HR Management
Pros
- It’s a highly experienced PEO that’s IRS- and ESAC-certified.
- It provides access to enterprise-level benefits.
- Global payroll is available.
- Its dedicated team of specialists provides day-to-day support and strategic HR guidance.
Cons
- Its pricing isn’t transparent.
- Time tracking is a paid add-on.
- Customer service isn’t always easy to contact.
ADP TotalSource has custom pricing. You need to call to get a custom quote for your business.
- Robust compliance support: ADP TotalSource’s HR experts have decades of experience and can advise you on compliances in everything—from hiring to terminating employees. It can help you avoid potential legal issues, as it constantly tracks regulatory changes. It even provides legal assistance if an employee sues your company, provided you followed ADP’s recommended processes.
- Wide range of HR solutions: ADP’s PEO service comes with an all-inclusive HR, payroll, and benefits package. It takes on standard HR tasks like managing paid time-off (PTO), administering unemployment claims, handling garnishments, and reporting payroll taxes. You’re also granted access to full-time recruiters, applicant tracking tools, and new hire onboarding solutions, so you can find and hire qualified candidates effortlessly.
- Highly-experienced PEO: ADP TotalSource is considered one of the well-established PEOs in the industry, with over 60 years of HR expertise and experience. Similar to Justworks, its PEO service is also IRS- and ESAC-certified.
ADP’s PEO service, ADP TotalSource, offers decades of HR expertise and experience (60-plus years) and a robust set of features to choose from. Companies just starting out with plans to expand operations can take advantage of the strategic HR guidance provided by ADP’s team of dedicated specialists to ensure that they remain compliant with labor laws and regulations as they grow their business and workforce. Aside from expert HR support, you are also granted access to an online HR platform for tracking employee information, benefits, payroll, and more.
While you get feature-rich HR solutions and services, ADP TotalSource’s team of HR professionals won’t help create your HR policies for you (Bambee offers this service). They only provide expert guidance in addressing HR, compliance, and employee-related issues. Plus, the online solutions included in ADP TotalSource aren’t as robust as Rippling, which offers HR, IT, payroll, and expense management tools.
ADP TotalSource comes with an online HR platform that you can access on computers and via mobile devices. (Source: ADP TotalSource)
Papaya Global: Best for Companies With International Staff
Pros
- It helps you hire and pay employees in 160-plus countries.
- It offers worker classification and compliance check.
- It provides a dedicated customer success manager.
Cons
- It charges a setup fee per location.
- It has no performance review tools.
- It can get expensive as you add more services.
Payroll Plus
- Grow Global (101–500 employees): $25 per employee monthly
- Scale Global (501–1,000 employees): $20 per employee monthly
- Enterprise Global (1,000-plus employees): $15 per employee monthly
EOR: $599 per employee monthly
Contractor Payments and Management: $30 per contractor monthly
Agent of Record: $200 per contractor monthly
Payments: $2.5 per transaction
- Payroll analytics: Papaya Global’s analytics lets you see your payroll and HR data in real time. You can also break down these data to get a more granular view of each project, helping you make more informed decisions.
- Benefits and equity management: Papaya Global analyzes your benefits plans on a country-by-country basis. The analysis can help you design and offer competitive and attractive benefits packages that are tailored to the specific needs and preferences of the local workforce.
- Employee of Record (EoR) function: Papaya Global’s EoR takes on the responsibility of hiring and paying international employees on behalf of your company. This service ensures that your employees are paid accurately and on time, while also managing benefits and other statutory requirements.
Papaya Global, like Rippling and ADP TotalSource, has global payroll and HR capabilities. However, Papaya stands out because of its wide network of in-country partners that will help you hire and pay workers in more than 160 countries. Compared to the other providers on this list, Papaya Global partners with local experts instead of setting up local entities in the countries it serves. It also has compliance checks and worker classification functionalities, ensuring that companies remain compliant with local regulations and effectively manage their global workforce, reducing potential risks and liabilities.
However, Papaya Global is not IRS- or ESAC-certified like TriNet, Justworks, and ADP TotalSource. It also charges a set-up fee and has no employee development tools. These are just some of the factors why Papaya Global lost points to the other providers on this list.
Papaya Global’s payroll analytics dashboard gives you a clear overview of all the projects and payments you have in different countries. (Source: Papaya Global)
How to Choose the Best HR Outsourcing Service
To help you choose the best HR outsourcing service, we examined 14 popular HR service providers and looked for essential HR functionalities and tools small businesses need, weighing attributes accordingly. Before jumping right into one service, we recommend you evaluate each service provider based on the following criteria:
Pricing
When determining which HR outsourcing service is right for your small business, you need to weigh your budget against the features you most need from the software. How much you end up paying will depend on whether it is a flat fee for all features or if you have to pay additional for each selected feature. In addition, pricing can range from a per-employee, per-month price to a straight monthly price or even an hourly price.
User Feedback
One of the best ways to know if a software is right for you is to see what other people are saying about it. We recommend that you check out sites like G2 or Capterra and see what users have to say. For instance, Bambee scored a 4.6 out of 5 on Capterra because users claim it is simple to use and offers the best value for the money. Alternatively, Rippling scored a 4.8 out of 5 on G2 because users like its robust features and how easy it is to manage benefits in one place.
Key Features
When evaluating the software, be sure to look at the key features available. A good HR outsourcing service should include most, if not all, of the following features:
- Payroll processing
- Benefits administration
- HR management
- Legal compliance
- Policies and procedures
- Applicant tracking
- Performance management
- Reference and background screening
- Counseling services
Ease of Use
A user-friendly HR outsourcing system not only enhances user satisfaction but also has a positive impact on productivity. When users find a software system easy to use, they can quickly learn how to perform tasks and complete them efficiently. Furthermore, an intuitive interface reduces the time required for training new users, allowing you to onboard employees more seamlessly.
Type of HR Outsourcing Service
There are various types of HR services, and partnering with the right provider will make managing compliance and day-to-day HR administrative processes easy for you. To help determine which one is best for your company, here are four common HR outsourcing services for small business owners.
- Individual HR Consultant: An independent HR consultant is best for those wanting the benefit of working side-by-side with an expert at your location who helps you identify HR needs as your business grows. Pricing can vary from $50 per hour to write job descriptions to as much as $500 per hour to manage an HR strategy session.
- HR Consulting Company: We recommend outsourcing to a professional HR consulting firm if individual tasks or projects are your primary need. For example, maybe you want to set up a health insurance benefits program, update your employee handbook, set up policies, or conduct training on how to avoid discrimination in the workplace. Most HR consulting companies offer custom-priced plans—you have to call the provider to discuss your requirements and request a quote.
- PEO: A PEO actually hires your employees and leases them back to you for a fee. While you manage day-to-day work activities and supervision, the PEO manages HR and acts as the EoR. PEOs are priced in various ways. Some providers, such as Justworks, have starter monthly fees priced as low as $59 per employee (for the first 49 employees; it goes down to $49 for your 50th employee onward). Others cost between 2% and 6% of employee annual salaries.
- HR Service Provider: We recommend an HR service provider as a step up from software alone to ensure your company is compliant with all labor laws, especially if you’re in a regulated industry (such as banking, healthcare, or manufacturing) that requires licensing, safety, and certifications. An HR service provider is not a co-employer like a PEO, but it provides the benefits of an HR expert at your fingertips. Pricing for HR services runs a bit higher than software alone—between $10 and $75 per month, plus an extra $2–$15 per month per employee.
Methodology: How We Evaluated the Top HR Consulting Services for Small Business Owners
We compared each provider based on their pricing, ease of use, HR features, and reporting capabilities. We also looked at user feedback to get a more comprehensive understanding of how each provider works. Aside from the primary criteria, we also considered the availability and quality of customer support and their integration with other business tools and systems. Lastly, we also evaluated how well each provider can scale their services as a business expands.
Click through each tab to get a more in-depth look at our evaluation:
20% of Overall Score
Understanding the cost is crucial for businesses of all sizes, especially SMBs with tighter budgets. Providers that offer the best value for their services get higher points. We also gave extra points to those with transparent pricing and no setup fee.
30% of Overall Score
The range of services offered by each provider is important to determine how well they can meet a company’s specific needs. This includes payroll processing, compliance support, employee onboarding, benefits administration, and more. The more features the provider has, the more points are given to them.
5% of Overall Score
For this criterion, we assessed the quality and comprehensiveness of the reporting features provided by each service. This includes whether the provider has prebuilt reports as well as their customizability. We gave extra points to providers whose reports can be downloaded in different formats.
10% of Overall Score
This criterion offers a deeper understanding by looking at the width and depth of the HR services for small businesses. We also considered whether the website or software is easy to navigate.
20% of Overall Score
Aside from intuitiveness and user-friendliness, ease of use includes the quality of the provider’s customer support and the availability of resources that help users better understand each feature.
*Percentages of overall score
HR Outsourcing Frequently Asked Questions (FAQs)
Outsourcing HR makes more sense for startups and small businesses as they may not have the resources to hire a full HR team to manage HR operations. This allows employers to delegate specific tasks (such as creating HR policies, processing payroll, and managing benefits plans) to a consultant or HR service provider. These providers will also ensure you stay up-to-date with labor regulations and help you avoid compliance risks.
Because an HR outsourcing firm can be a person, a vendor, or a group of consultants, you need to do your due diligence and have a contract to clarify terms and expectations. A few areas to consider when looking to outsource HR functions include the level of expected HR expertise, the availability of transparent pricing, and an agreement on who owns the materials created, as well as maintaining confidentiality.
Bottom Line
The best HR outsourcing service for your business is the one that matches your specific needs. HR outsourcing is much less expensive for a small business than hiring a full-time HR person, whether you choose to work with a consultant or manage HR yourself with great software. In fact, until your company gets closer to 100–200 employees, a full-time HR person may not be necessary (unless you’re in a unionized business, plan rapid growth, or have lots of labor law issues).
We find Bambee to be the best overall HR outsourcing vendor for small businesses because it provides both expert HR support and the basic tools for handling onboarding, performance and training tracking, and HR compliance. Its online document storage even complies with federal and state record retention laws. Plus, you get a dedicated HR manager to help you navigate the complexities of managing employees and labor laws.
