Internal HR Versus HR outsourcing


In today’s competitive work force, HR is not just about maintaining personnel files and recruiting employees. HR professionals are strategic business partners, and can be a major factor in the company’s success (or failure). As a result of this demand, there may not always be time to implement every project internally. With that in consideration, strategic human resource planning must be implemented. 

There are several advantages of outsourcing and disadvantages of outsourcing HR needs versus creating internal programs. In order to determine whether or not you need to think about outsourcing an external consultant or Human Resource provider, you need to quantify your HR purpose in your organization..

Temporary Agencies:
Outsourcing temporary employment can be a great way to fill a companies needs during busy times, and to cover vacations or leaves of absences of existing employees. In addition to for screening applicants and selecting candidates, most temporary services are responsible payroll, unemployment compensation, and bonding (if for example, the temporary employee damages company equipment or property). The disadvantages to hiring temporary employees are that you may not get the commitment of a regular employee, and temporary agencies can be costly (at an average mark up of 35%-40% per employee). The experience depends on the quality of the temporary agency.

Recruitment and Selection
Outsourcing recruitment can be helpful in the screening process, if your company has the resources to do so. However, keep in mind that this outsourcing recruiter/agency represents your company in all aspects, so if they ask inappropriate or illegal questions during the interview process they are your representatives. So on this note, be very selective about the person or firm your outsourcing with that you have recruiting or selecting candidates. You are only as strong as your weakest link! 

Probably the biggest advantage of using HR software instead of Outsourcing is it cuts costs even more. There is software available to create job descriptions, sample policies, write performance reviews, and other such time consuming tasks. Some of these tools are great to use as resources to save time, but be cautious of some of the “free demos” that you may be billed for later. 

Another factor to beware of when purchasing HR software is aggressive sales representatives. Though using software does have it draw backs compared to HR Outsourcing, the biggest problem with using software over outsourcing payroll HR stands in the fact that you really have to know how to properly use the program. It is not as easy as purchasing a license and getting the job done fast. In most situations you have to spend some time in training an employee or a department in the use of the payroll software you might have just purchased.

This can take up time and you might even need to hire someone else that knows what he/she is doing. We can say that the biggest disadvantage stands in not knowing how to properly use the payroll software and not maximizing the benefits it brings in. Also, there might a possibility that the particular software you are considering is not well designed to suit your own HR payroll needs. Make sure that you research and ask for a demo before you purchase.

Sometimes it is great to use software but if you can not use it right then you are making a bad move. Think about the fact that HR payroll outsourcing providers are experienced and they can do the job a lot faster than you can.  We believe that a good company can save you time and money through this experience factor.


  • Training
    Training is often the first function to suffer when a company needs to downsize or shave money off a budget. However, as with outsourcing in general, non-financial considerations may also be important. For example, management may think the training department is not advancing the strategic goals of the organization or producing results benefiting the company. Outsourcing can give training the competitive edge it needs to maintain its ranking with other departments.

  • The following type of HR orientation programs tend to have more credibility when they are conducted internally, because internal representatives seem to have a better understanding of the company’s policies, mission, culture, values and overall objectives.
    • Employee Benefits
    • Documentation and Discipline
    • Policy and procedure
    • Performance Management (which is usually organization specific training)

  • However, the following types of training programs can be successful conducted internally or externally, depending on your company’s time, resources, and organizational demand:
    • Performance Appraisal Workshops
    • Coaching and Counseling 
    • Time Management 
    • Sexual Harassment
    • Managing Diversity 
    • Employee Relations (If it is an adversarial work environment, it is sometimes better to have an outside consultant conduct this training)
    • Paradigm Shifts (outside consultants sometimes work better doing type of training, as well, especially when there is an organizational change or merger involved)
    • Management Development


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A primary goal of a HR professional is to strive to help employees and the company reaches unlimited potential. Remember that your contributions, whether they are outsourced or internally developed, add to the success of your organization. Choose your time and resources wisely. 

HR outsourcing is an organisational process which needs to know why its current HR function may require change. Of the current HR system, you must know what may be falling short of expectation. From here HR can focus on the changes required, which will help decide whether HR outsourcing may be an effective process to introduce into your organisation.


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