INSIGHT

When should a company outsource HR? 

Jill Pappenheimer • July 23, 2025

Services: Outsourced HR

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Many business owners find themselves pulled in countless directions, with HR responsibilities often consuming valuable time and resources. Between managing payroll, navigating complex, often changing regulations, evolving technologies (AI), introducing must needed policies, to staying ahead of increasing benefit costs, these tasks can quickly overwhelm even the most dedicated leaders.  

Identifying the right moment for partial or complete HR outsourcing 

This article explores the key indicators that signal it’s time to consider HR outsourcing and how this decision can benefit your company’s bottom line and operational efficiency. 

Rising HR laden burdens 

As your company grows, HR needs can become increasingly complex. When your team spends more hours trying to stay ahead of the regulations and employee appropriate responses versus focusing on revenue-generating activities, you’re experiencing a critical warning sign. HR outsourcing allows you to redirect this energy toward strategic initiatives that drive business growth. 

Todays HR departments are navigating organizational pressure to support employees and the organization more creatively utilizing AI and system efficiencies, yet they are bogged down with the day to day work that needs to be done.   Who has the time to think outside of the box.   This is where an outsource solution can bring an objective perspective to how the operation can function differently, saving time and money in the long run, says Jill Pappenheimer, BPM Partner, HR Consulting. 

Cost analysis reveals inefficiencies 

Many businesses discover that maintaining a fully staffed internal HR department costs significantly more than partnering with an outsourcing provider. When you factor in salaries, benefits, training and HR technology investments, the financial burden becomes apparent. HR outsourcing offers access to comprehensive services at a reduced cost, delivering significant savings while improving service quality. 

The cost comparison becomes even more compelling for small and mid-sized businesses that need professional HR support but cannot justify hiring multiple specialized HR staff members. Outsourcing provides access to diverse HR professionals with specialized knowledge across all HR disciplines without the overhead expenses. 

“The time is now for many organizations to step back and see how a combined services offering utilizing the right technology, AI solutions and specialized HR resources can be the combination to significantly affect costs and quality.” – Jill Pappenheimer, BPM Partner.  

Global/National compliance challenges multiply 

Staying current with ever-changing employment laws presents a significant challenge for businesses of all sizes, especially when in the global arena. When regulations evolve across local, state, federal and international levels, maintaining compliance becomes increasingly difficult. HR outsourcing partners continuously monitor regulatory changes and implement necessary adjustments to your policies and procedures, significantly reducing your risk exposure. 

This protection becomes particularly valuable for companies operating across multiple jurisdictions or employing remote workers, where compliance requirements can vary dramatically depending on location. 

Talent acquisition and retention struggles 

professional HR outsourcing providers offer access to competitive benefits packages typically available only to larger corporations. These enhanced offerings significantly improve your ability to attract and retain top talent in today’s competitive job market. 

Additionally, outsourcing partners bring specialized recruitment knowledge and broader candidate networks, helping you identify and secure the right talent for your organization’s unique needs. 

Technology limitations hinder progress 

Outdated HR systems and manual processes create inefficiencies that impact both your HR function and overall business operations. If your team relies on spreadsheets and paper forms while competitors leverage integrated HR technology, you’re at a competitive disadvantage. HR outsourcing provides access to sophisticated HR platforms without substantial investment in purchasing and maintaining these systems independently. 

Modern HR technology streamlines everything from applicant tracking to performance management, creating a more efficient and positive experience for both employees and management. 

Maximizing the benefits of HR outsourcing 

When implemented strategically, HR outsourcing delivers multiple advantages beyond cost savings: 

• Increased focus on core business activities 
• Enhanced employee experience through streamlined processes 
• Access to specialized knowledge across all HR disciplines 
• Scalable solutions that grow with your business 
• Reduced compliance risks and liability exposure 
• Leverage on technology solutions that embrace efficiencies 

How BPM can help 

When your HR approach needs recalibration, consider talking to BPM to assess the possibilities. BPM offers comprehensive HR outsourcing solutions tailored to your business’s specific needs and growth stage. Our team provides personalized support that aligns with your company culture while delivering objective guidance on challenging HR issues, supported by progressive technology solutions. 

Our scalable services adapt as your business evolves, ensuring you receive the appropriate level of support without unnecessary overhead costs while allowing you to concentrate on driving business growth and innovation. To find out more, contact us.