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Global Work Glossary

What is HRO and how does it operate?

Human Resource Outsourcing (HRO) involves independent third-party companies providing businesses with HR services such as payroll management, policy creation, and employee benefits administration. HRO firms can support businesses with both one-off projects and ongoing HR functions.

Services Provided by HROs

HRO firms offer various HR services to lighten the workload, enhance employee experience, and manage compliance risks: Payroll Administration and Taxes: Processing payroll tasks, managing deductions, ensuring tax compliance, and tracking employee absences. Employee Training and Development: Developing or improving training programs, monitoring performance data, and coordinating rewards. Healthcare and Benefits Administration: Accessing comprehensive and cost-effective benefits packages, managing benefits enrollment, and addressing administrative and coverage queries. Compliance and Workplace Safety: Managing compliance obligations, staying updated on labor laws, conducting investigations, and performing background checks. Policy Creation and Workforce Administration: Creating and updating policies, maintaining HRIS, managing employee queries, and handling sensitive data. Data-Driven Decision-Making: Monitoring HR data, applicant tracking, evaluating recruiting channels, reducing bias, and generating reports for strategic decision-making.

Why Use HRO?

Companies opt for HRO to achieve several benefits beyond cost savings: Reduced Bias in Conflict Resolution: Outsourcing HR tasks reduces unconscious bias since third-party providers lack personal connections to employees involved in conflicts. Faster Hiring and Onboarding: HRO firms can oversee the entire employee lifecycle, ensuring efficient hiring, onboarding, and termination processes. Up-to-Date Contracts and Documentation: HRO providers assist in creating compliant documents, educating teams on regulatory compliance, and minimizing compliance mistakes. Focus on Team Development and Business Initiatives: With HRO handling routine tasks, in-house HR teams can dedicate more time to personal development and strategic initiatives driving organizational change.

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