HR Outsourcing Pricing

It’s hard to get a hard and fast number as different HRO providers have varying levels of service and price points. In general, you’ll either pay a fixed dollar amount every month for each employee, or a percentage of collective salaries. Here’s how it breaks down:

Fixed dollar costs: Expect to pay $20 to $200 for each employee on a monthly basis, which can be billed monthly or quarterly. The actual amount you pay depends on the services you need and how large your company is. You may qualify for a volume discount if you have a large staff of employees.

Percentage-based costs: This will run you 2% to 10% of each employee’s annual salary, depending on the level of services you need. Keep an eye on these figures as you hand out raises or performance bonuses. Otherwise, the HRO firm can pocket extra money for nothing.

Several HRO firms will provide a la carte service pricing allowing you to pick and choose the services you want. This can cost as little as $25 to $50 per person for background checks and drug tests or a few hundred dollars to help create policy guides or several thousand dollars to develop and implement recruitment programs and promote job listings. If you elect to go with a full-service HRO provider, find out which services are included in the price.

Look over your contract with the HRO firm carefully to make sure everything is in order. If you are unsatisfied with the service, you can typically opt out without penalty after 60 days. Make sure you provide at least 30 days advanced notice before doing so.