Outsourcing to an external provider can offer benefits, such as increased efficiency and access to expertise. But it can also present challenges, such as loss of in-house knowledge and processes, and fragmented HR services. Payroll is the most commonly outsourced HR activity, followed by providing advice on specialist topics.

This factsheet introduces HR outsourcing and its use by organisations. It outlines some of the alternatives to outsourcing, such as shared services, employee self-service, and buying-in consultancy services. It highlights the need to consider the business case, and the questions to ask, when deciding whether outsourcing is appropriate. Finally, the factsheet offers guidance on selecting a provider and what to consider when managing the move from in-house to a third-party service.

Contents

To continue reading, log in or become a member

Affiliate membership offers instant access to CIPD resources without the need for assessments or study, or explore your options to become a professional member of the CIPD to demonstrate your commitment to the world of work.

  • Access to exclusive, up-to-date resources
  • Become part of a community to learn, debate and connect with other people professionals
  • Free access to a series of CIPD learning courses and a discount on the rest of our catalogue
Instant access Explore membership
  • Podcast

    HR People Pod

    Listen to episodes of HR People Pod, the CIPD’s fortnightly podcast providing expert insights from HR leaders discussing the topical issues impacting the world of work.

    Listen now
    • Factsheets