Human Resources outsourcing refers to the practice of contracting a third-party organization to handle some or all of a business’s HR tasks and functions. That includes the administration of health benefits plans, retirement plans, and workers’ compensation insurance. It also includes hiring, training, and legal expertise.

According to a study by The Society Of Human Resource Management (SHRM), over half of all HR professionals have taken advantage of outsourced HR. The top two reasons for outsourcing are the benefits of cost and time efficiencies. These efficiencies are really the opportunity costs of business owners and managers, who lose time and money focusing on HR tasks when these resources can be spent on what must be done to grow their business. That is, the time and money devoted to employee management is better spent by outsourcing HR so that businesses can be devoted to core business functions.