Posted By:

Reinaldo Lopez on March 28, 2014

What is HRO? 4 Things to Look for in a Partner

Human Resources Outsourcing, or HRO, is a phenomenon that’s really caught on, especially with small to mid-sized businesses. This term is defined by Answers.com as “outsourcing the HR function to another company that specializes in HR.” The company that  outsources HR does not have its own internal HR department. Besides saving businesses time, this strategy is popular because of the financial savings, improved compliance with regulations, and access to sophisticated analytics.

Teaming up with a HRO partner allows your business to delegate tasks such as payroll processing, personnel administration, employee training, and benefits management. This gives in-house managers and employees time to focus on the core elements of running your business.

Because there can be a disparity among providers, it’s important to know what to look for. Here are four key things to look for when making your selection.


1) A Wide Range of Services

Ideally, a HR company will cover the entire spectrum of services so it’s a one stop shop. Whether it’s handling risk management, 401(k) plan administration, analyzing employee performance or finding temp workers, it’s nice to have a partner that can handle all of your needs. As your business grows, you never know which services you may need in the future, so a provider that covers all of the bases can accommodate that growth.


2) Compliance and Certifications

Regardless of your industry, there are often multiple regulations and standards that must be adhered to. Accordingly, a HRO partner should have some strong risk management programs in place to reduce the odds of serious issues arising. They should also make efforts to comply with local, state and federal regulations to avoid any legal backwater. Being certified with an organization like the National Association of Professional Employer Organization (NAPEO) is a good sign.


3) Extensive Experience

Although a relatively new provider doesn’t necessarily mean they’re ill-equipped, it’s in the best interest of your business to go with a tried and true HR company. Being in business for at least a decade shows that a provider has a reasonable level of experience and should be capable of handling your needs. It’s also smart to go with someone who has specific knowledge and experience in your industry.


4) Cutting Edge Technology

Technology plays a big role in human resources, so you should look for a partner that implements the latest systems. This will streamline communication in a way that you and your employees will benefit. It should also make it easier to transition into the future as technology becomes increasingly complex.


Taking advantage of HRO and everything that it brings to the table can yield big rewards for your business. Not only can you simplify operations and save money, but outsourcing should give you the edge over competitors and be a catalyst for growth.

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