When it comes to business operations, HR orchestrates everything from hiring to firing or payroll to performance appraisal. But when getting assistance from an HR partner – what is the expected cost of these services?
In this post, we’ll discuss what services HR partners factor into their pricing so you can better understand what you get for what you pay for.
Getting to Grips with HR Outsourcing Costs
Outsourcing your HR can be a crucial investment – as long as you choose the right partner. Typically, the costs of working with an HR partner cover HR’s core tasks – from simple payroll and benefits administration to maintaining legal compliance in processing annual taxes. Some entities charge a fixed fee per month, where others might charge a percentage of your company's total benefit bill.
Which is best for you depends on your company’s financial situation and specific needs.
The Anatomy of HR Outsourcing Costs
HR outsourcing’s costs cover a broad set of services, where every service and its associated fee goes toward helping your company. Many HR partners (TEL included) allow significant customization options, letting businesses narrow their scope to the services they use and need – so you can avoid paying extra for unnecessary services.
Here is a breakdown of the types of fees usually found when looking into outsourcing your HR.
1. Initial Setup Fees
Initially implementing your HR outsourcing requires a time investment to ensure the process runs smoothly, and the initial setup fees go toward doing so. From system integrations to process alignment, these one-time setup fees help tailor the outsourced HR system to your company.
2. Monthly or Annual Service Fees
Monthly or annual service fees cover the recurring costs of managing your outsourced HR. These are often tiered based on the depth of services and go toward the ongoing services you receive – such as access to HR technology or consulting.
3. Per-Employee or Per-Transaction Fees
As your business grows, its needs increase with new personnel or services you add. Per-employee or per-transaction fees are the variable costs that cover payroll processing or workers’ comp. These fees are charged as a flat fee per employee or a percentage of payroll, as they directly support each staff member.
4. Customization Fees
Customization fees account for tailoring HR services to meet the specific needs of your company, ensuring a better fit but sometimes at an added premium. However, investing in customization directly benefits your business by providing helpful services, making it a worthwhile expense.
5. Training Fees
Transitioning to outsourced HR means educating your team about using their new tools and processes. Training fees cover the cost of transferring expertise and can include teaching new HR staff on technology usage, guiding employee relations, or developing a standardized OLS to improve onboarding.
6. Cancellation or Change Fees
Cancellation or change fees cover expenses from backing out or making big changes, usually before an agreed-upon date where the HR provider hasn’t been able to make up for the costs associated with getting you set up.
Trust TEL with Your HR Needs
At TEL, we believe that transparency is essential for any successful HR partnership. Our goal is to empower companies with HR support that lets you financially plan ahead. Our pricing structure is designed to align with your business's unique trajectory, ensuring that your HR expenses are an investment in your company's success, rather than a cost.
Navigating HR outsourcing costs can be intimidating, but you don’t have to undertake it alone. With the right HR partner, you can be confident that you have aligned your services with your budget and growth.
Reach out to our team today to discuss how TEL can manage your HR costs and manage your business's prosperity.
