Most growing companies reach a point where HR stops fitting into someone's spare time. A founder or office manager is suddenly handling a disciplinary issue, a leave request in a new state, a handbook that is three years out of date and a benefits renewal, all in the same month. Hiring a full-time HR professional is one answer. Outsourcing some or all of the work is another.
"HR outsourcing" covers very different services, from an advice line you call when something goes wrong to a co-employment arrangement that takes over payroll, benefits and compliance. Choosing a provider starts with choosing the model. This guide explains the main models, compares seven providers in the U.S. and UK on published information, and sets out how to choose.
We describe each provider from its own website. Most quote prices; we include published prices where they exist, as of November 2026.
The four main HR outsourcing models
| Model | What you get | Who employs your staff | Typical fit |
|---|---|---|---|
| HR advice and compliance service | A dedicated or on-call HR adviser, policies, handbooks, documents, sometimes tribunal or legal cover | You | Small businesses that run payroll themselves but need HR expertise |
| Administrative services organisation (ASO) | Payroll, HR administration and HR advice, with benefits options | You | Businesses that want outsourced HR but keep their own benefits and employer status |
| Professional employer organisation (PEO) | Co-employment: payroll, taxes, benefits through the PEO's plans, workers' comp, compliance | You and the PEO (co-employment) | U.S. small and mid-sized businesses wanting better benefits and full HR support |
| Employer of record (EOR) | A provider employs staff for you where you have no entity | The EOR | Hiring in other countries |
If you are weighing outsourcing against building an internal team, our HR outsourcing vs in-house comparison sets out the costs and trade-offs. For the difference between co-employment and employer-of-record models, see our EOR vs PEO comparison.
Why companies outsource HR
Compliance is getting harder. Employment rules change at federal, state and city level in the U.S., and frequently in the UK. Keeping policies, posters, leave rules and pay practices current is specialist work.
Managers need support. Gallup's research shows managers account for at least 70% of the variance in team engagement, yet many small-business managers have never had management training. An outsourced HR adviser can coach them through difficult conversations, performance issues and terminations.
Turnover is expensive and often preventable. Gallup found that 42% of employees who voluntarily left said their manager or organisation could have done something to stop it, and estimates that replacing a manager costs around 200% of salary. Good HR practice pays for itself when it keeps people.
Benefits matter for hiring. Small employers compete for talent with larger companies. A PEO can give access to large-group benefits that a 15-person business could not buy alone.
The seven providers at a glance
| Provider | Model | Market | Published price |
|---|---|---|---|
| Bambee | Dedicated HR manager and compliance service | U.S., up to 500 employees | From $199/month |
| Paychex | HR packages from advice to full PEO | U.S. | No (custom pricing) |
| Insperity | HR technology with service (HRCore) or full PEO (HR360, HRScale) | U.S., up to 5,000 employees | No |
| Justworks | PEO and payroll | U.S. | PEO from $79 per employee per month |
| ADP TotalSource | PEO with a named HR business partner | U.S. | No |
| Peninsula | HR, employment law and health and safety service | UK | No |
| Citation | HR, employment law, health and safety and ISO support | UK | No |
HR advice and compliance services
These providers give you HR expertise without changing who employs your staff or how you run payroll.
Bambee
Bambee describes itself as "the HR Manager solution for America's small businesses". Its pricing page lists plans starting from $199 a month, with a dedicated HR manager, compliance monitoring that finds and fixes gaps in policies and practices, an always-current handbook, support with employee issues and help for managers. It says it covers all 50 states, more than 20 industries and companies of up to 500 employees.
- Strength: a named HR manager at a predictable monthly price, aimed squarely at small businesses with no HR staff.
- Watch for: Bambee does not run payroll or provide benefits; you will need separate payroll software and a benefits broker or provider.
- Best for: small U.S. businesses without HR staff that need HR expertise and compliance, not co-employment.
Packages that scale from advice to PEO
Paychex
Paychex's HR packages page sets out three levels: HR Partner Plus, "personal, proactive HR guidance and valuable HR resources"; HR Pro, a "full-service solution offering HR guidance, award-winning technology, and employee benefits"; and HR PEO, an "all-in-one professional employer organization" covering HR, benefits, payroll and compliance. All three are custom-priced.
- Strength: you can start with HR guidance and move to a full PEO with the same provider as you grow, on Paychex's payroll platform.
- Watch for: no published pricing; confirm whether a dedicated HR professional is included in your package.
- Best for: small and mid-sized businesses that want one provider for payroll and HR and may move to a PEO later.
Insperity
Insperity's website offers HRCore, HR technology "backed by a responsive HR service team", without co-employment, and two full-service PEO products: HR360, combining technology, HR expertise and employee benefits, and HRScale, which pairs its PEO service with Workday technology for more complex needs. It serves businesses from under 50 to 5,000 employees. Pricing is not published.
- Strength: a choice between outsourced HR service and full PEO, with high-touch support.
- Watch for: quote-only pricing and sign-on offers whose terms you should read carefully.
- Best for: growing mid-sized companies that want an HR partner and a path to a Workday-based system.
PEOs
PEOs take on the most work and offer the largest benefits advantage. We compare five PEOs in detail in our guide to the best PEO services for small business; two are summarised here.
Justworks
Justworks publishes its prices on its pricing page: PEO Basic at $79 per employee per month (payroll, compliance, HR consulting and tools, 24/7 support, 401(k)) and PEO Plus at $124 (adding medical, dental and vision administration and other benefits), with no base fee. Dedicated HR consulting is an add-on at $30 per employee per month.
- Strength: transparent pricing and a self-service platform.
- Best for: startups and small teams that want PEO benefits without a sales negotiation.
ADP TotalSource
ADP's TotalSource page describes a named HR business partner backed by specialists, benefits "negotiated and administered by ADP", IRS certification as a PEO since 2017 and ESAC accreditation since 1995. Pricing is quoted based on workforce size and demographics, workers' compensation risk and locations.
- Strength: a dedicated HR contact and the scale of a large payroll provider.
- Best for: small and mid-sized businesses that want a named adviser within a PEO.
UK HR outsourcing
PEOs are a U.S. model. In the UK, outsourced HR usually means an employment law and HR advice service, often combined with health and safety support and insurance against tribunal costs.
Peninsula
Peninsula's website offers an unlimited 24/7 HR advice line, handbooks, policies, contracts and letters "written for you by an expert", tribunal representation, unlimited 24/7 health and safety advice with risk assessments, and BrightHR software included in its packages. Legal protection options include employment tribunal protection and health and safety prosecution protection. It says 44,173 business owners use its HR services. Prices are not listed on the home page.
- Strength: round-the-clock advice and tribunal support for employers without in-house HR.
- Watch for: read the contract length and renewal terms before you sign, and check what advice you must follow for legal protection to apply.
- Best for: UK small businesses wanting employment law cover and HR documents in one service.
Citation
Citation's website offers HR consultants, contracts, handbooks and policies, a 24/7 advice line and tribunal representation, with a "£1.5m advice guarantee" covering legal fees and tribunal costs when you follow its guidance. It also provides health and safety consultants, on-site inspections, Atlas HR and health and safety software, accredited training courses, and ISO certification support. It says more than 30,000 UK businesses use it. Pricing is not published on the home page.
- Strength: HR, health and safety and ISO certification support from one provider.
- Watch for: as with any guarantee, check the conditions and the contract term.
- Best for: UK businesses in construction, manufacturing and other sectors where health and safety and certifications matter as much as HR.
How much HR outsourcing costs
Prices vary with the model:
- Advice and compliance services are usually a flat monthly fee based on headcount. Bambee publishes a starting price of $199 a month.
- ASOs and HR packages typically charge per employee per month on top of payroll.
- PEOs charge per employee per month or a percentage of payroll, plus the cost of benefits and workers' compensation. Justworks publishes $79 and $124 per employee per month.
- UK advice services are usually annual contracts priced on headcount and the services you add.
Compare the total against hiring. SHRM's 2025 benchmarking puts the average cost per hire at $5,475 for non-executive roles, before salary and benefits. For many businesses under about 50 employees, outsourcing costs less than a full-time HR hire and gives access to a wider range of expertise.
How to choose an HR outsourcing company
1. List what you actually need. Separate advice (policies, employee issues, compliance), administration (payroll, onboarding, leave tracking) and benefits. Only PEOs combine all three; advice services cover the first.
2. Decide whether you want co-employment. If better benefits are the main goal in the U.S., a PEO is usually the answer. If you want to keep your own payroll and benefits, choose an advice service or ASO.
3. Check the expertise. Ask who will advise you, what qualifications they hold, whether you get a named contact, and how quickly they respond.
4. Check coverage. Confirm the provider covers every state or nation where you employ people, including local leave and pay rules.
5. Read the contract. Notice periods, automatic renewals, exit fees and conditions attached to legal protection or guarantees vary widely. In the UK especially, check the contract length before signing.
6. Plan for adoption. SHRM found that on average only 62% of employees actively use the HR technology their organisation implements. If the service includes software, make sure managers and staff will use it.
Our guide to HR for small business covers the HR basics every growing company needs, whether you outsource them or not.
What to keep in-house
Even with the best provider, some things should stay with you:
- Culture and values. No provider can define what kind of company you want to be.
- Management. Outsourced HR can coach managers but cannot manage for them.
- Hiring decisions and pay strategy. Providers advise; you decide.
- Employee relationships. People want to hear important news from their own leaders, not a third party.
Frequently asked questions
What is HR outsourcing?
Contracting some or all HR work to an outside provider, from HR advice and policy writing to payroll, benefits and compliance. The main models are HR advice services, administrative services organisations (ASOs), PEOs and, for international hiring, employers of record.
What is the difference between an ASO and a PEO?
An ASO handles HR administration and advice while you remain the sole employer, with your own benefits plans. A PEO co-employs your staff, files payroll taxes under its own tax ID and offers benefits through its large group plans.
How much does it cost to outsource HR?
Published prices include Bambee from $199 a month for a dedicated HR manager and Justworks PEO from $79 per employee per month. Most providers quote based on headcount, services and locations.
Is HR outsourcing worth it for a small business?
Often yes, when no one in the business has HR expertise and hiring a full-time HR professional is not yet justified. It reduces compliance risk and frees founders and managers to run the business.
What are the best HR outsourcing options in the UK?
Peninsula and Citation are two large providers of HR and employment law advice, documents, tribunal support and health and safety services for UK businesses. Compare contract terms, guarantees and the services included in each package.