We all know that human resources (HR) processes are important. But for a business looking to grow quickly, it might not always seem that way. The challenge is to keep your HR costs as low as possible, while still meeting all of your needs. Finding out how to do this involves a lot of time, effort and research. Luckily, Approved Index has done the leg-work for you.
We’ve worked with British businesses for over 14 years, and found that all too often, time and money is being invested in HR departments when it is not necessary. HR specialists can help you cut costs in a number of ways, by improving, supporting, or even replacing your internal staff.
Here, we have collected the key prices and options you should have in mind when choosing whether and how to outsource your HR needs.
Ultimately, it comes down to what suits your business. Approved Index can help you make the right decision. We'll match you with up to four leading UK HR Agencies that best fit your requirements, and provide free price quotes. Simply fill in the form above.
Let Approved Index help you find the best HR Agency for your business.
|On This Page:|
|The Cost of Outsourcing for HR Functions|
|HR Consultancy Fees|
|Outsourcing Versus In-House HR Costs|
|What Influences HR Costs?|
|Compare HR Prices|
Breaking down the costs of HR functions
Human Resources operations- where your company meets its employees- involve a lot of different processes. This means that HR prices can be hard to calculate. What exactly should you be paying for different types of outsourced HR support and how does it compare to the cost of maintaining an in-house HR department?
|HR Audit||Review all your company HR procedures & suggest improvements.||£700|
|HR Support||Provide aid to your business or internal staff during large projects.||£100/month|
|Fully Outsourced HR||Export all human resource processes, including reviews, payroll, etc.||£200+/month|
This table gives an indication of what you can expect to pay for outsourced HR services. However, HR is definitely not one-size-fits-all. Some of the options in the table above cancel out others; a business looking for a one-time audit, for example, is unlikely to outsource their HR as well. HR support however, could potentially happen in conjunction with either of the other two processes.
To understand how outsourcing can be tailored to your business needs, it is important to speak to a range of suppliers: Approved Index can help here. Fill in the form at the top of this page to compare top UK HR agencies today.
For companies that are happy to have their own in-house HR staff, but would like to see it perform better, an HR audit can be game-changing. An independent HR consultant will tell you exactly where things are going wrong and how you can improve them. A busy company puts daily demands on its HR team, meaning they often do not have the time to keep up to date with employment legislation, undertake further training or monitor the efficiency of their procedures (let alone implement new ones). An HR audit will provide an in-depth review of your human resources processes, make any quick fixes, and suggest remedies and training that can help.
Prices: A one-day HR audit from Zest HR costs £695 at the time of writing, with offers from other providers in a similar range.
Sometimes, there is simply too much work for your current HR capacity. This might be because of a new project or expansion, but does not mean you need to hire a new employee.
Contracting an outside company to provide HR support during these periods will ensure compliance with legislation and streamlined HR procedures, as well as providing advice on disciplinary matters, redundancy and recruitment.
These kinds of HR support services often include on-site visits when necessary, and are available on short contracts from most providers. They can also include indemnity against losses at employment tribunals (as long as their advice has been followed).
Prices: This will depend on your needs and the size of your business. For small businesses, Lightbulb HR offers HR Support from £99 per month. QC People Management Ltd offer HR support including indemnity starting at £109 per month.
‘Fully-outsourced’ HR services are the whole package. They are tailored to your company’s needs, so there is no standard service.
Outsourced HR will always include on-site support and usually specialist HR software for managing employee records. It can cover:
- Performance management
- Appraisals and reviews
- Recruitment and induction support
- Training and development support
- Employee benefits programme
- Payroll processing
- Absence management
- Employee engagement
The key advantages of HR outsourcing are cost and efficiency savings. For a large enterprise, a whole HR department with its attendant paperwork can be reduced to a single software package and on-site support when needed.
Prices: Bespoke services mean bespoke prices. For an accurate quote simply fill out the form at the top of this page.
In approximate terms, for a small business, the cost of fully outsourcing HR functions will start from about £200 per month. For a business with 50 employees Citrus HR offer full outsourcing of HR functions from £325 per month. Larger organisations will normally pay a fixed monthly rate that will vary depending on the number of employees and services required.
Approved Index can put you in touch with the best HR agency to suit your needs.
Human Resource consultancy fees
A further option is to hire an individual HR consultant. This is useful when you do not need to outsource any regular processes or have someone tell you what is wrong, but need a fix for an HR issue you have already identified. For example, you might need one-time advice on employment contracts, or an overhaul of your payroll system.
HR consultancy options vary depending on the agency or professional you work with and what you want from them. Often, an HR consultant will have a standard rate, which might be hourly, daily or task-specific.
Whether you enter a consultancy agreement on a pay-as-you-go or a retained basis will depend on what services you require from the consultant, and how often you need them. For a one-off issue, a pay-as-you-go arrangement is likely to be more cost-efficient. This is because you have no obligation to pay the consultant once the specific issue has been addressed.
However, for businesses without internal HR expertise, a retained consultant can offer great value. Most businesses will have HR needs that recur on a rolling-basis and might be outside your team’s expertise, especially when it comes to operating in accordance with complex employment laws. Having a retained consultant on hand to deal with these issues as they arise means they will be resolved faster and with minimal impact on your business. The disadvantage with this second option is that you will probably need to meet a certain quota of hours to be eligible for a lower rate.
The table below contains an estimated side-by-side comparison of pay-as-you-go and retained consultancy costs per hour.
|Consultant Agreement||Price per Hour||Number of Hours||Total Cost|
As with all the figures shown here, these are only an estimate and may not reflect the final cost of HR consultancy for your business. Contacting providers directly will give you a much clearer idea of the cost addressing your company’s needs.
For some businesses, hiring a consultant for ad hoc support is an expensive option compared to regular HR outsourcing. Fill in the form at the top of this page for bespoke quotes for top-quality HR services today.
The cost of outsourcing versus in-house
One of the main reasons for outsourcing HR functions is to reduce overheads. This is particularly important for small businesses who are trying to improve their overall efficiency levels.
When you employ HR staff, you need to take into account not only their annual salaries, but also the expense of training and implementing HR processes. An HR Manager could have a salary of around £50,000 and training costs of around £2000 a year. On the other hand, an outsourced HR Manager will cost around £40 per hour, so, even if they are working as many as ten hours per week, you would still be saving on overall costs.
The video below outlines the essential factors that you should have in mind when weighing up how to manage your company’s HR needs.
What can influence the cost of HR services?
The cost of HR will be specific to your company and its needs. There are several factors that will influence how much you are likely to spend. Here are the two most important:
1. Number of employees
The most significant factor that will define how much HR services cost is the number of employees in your business. More staff means you need more resources dedicated to HR. For small businesses, hiring a full-time or even part-time HR employee is probably not cost effective. In these cases, HR functions are best handled through outsourcing. For larger companies, an HR department would probably bring added value to the company, but that does not mean that outsourcing does not have advantages. HR support, audits and consultancy in particular are useful for any business.
2. Which HR services do you require?
Another aspect to consider is which HR services your business requires. Do you only require more basic HR functions to be covered, such as payroll administration and employee handbooks? Or are there elements of your business that might require highly specialised and qualified expert service?
For example, if your company operates internationally, you will require employment law advice across several jurisdictions. The latter is likely to cost considerably more than the former, but may still be worthwhile to meet your needs.
With so many factors to consider, the only way to get an accurate idea of the cost is to talk to service providers directly.
Compare HR prices
Managing all of your HR functions internally is expensive and potentially risky, for example if you do not have the correct expertise to maintain legal compliance. If you are looking to cut costs to help your business grow, you should consider outsourcing some – or all – of your HR functions.
For free no-obligation HR consultancy quotes, tell us your requirements in the form at the top of this page. You’ll then receive up to 4 free quotes from UK-leading HR consultants who we think are best suited to your needs.
Comparing quotes with Approved Index is free, quick and easy, and it could save you as much as 40% on your HR costs.
Compare HR Price Quotes from Leading UK Companies with Approved Index