What Are Outsourced HR Services and What Do They Include for UK Businesses?

Managing employees involves much more than hiring people and processing payroll. UK businesses also need to manage employment contracts, workplace policies, employee relations, absence, performance, recruitment, compliance and the many changes that affect the employment relationship.

For small and medium-sized businesses, handling all of these responsibilities internally can be difficult, particularly when there is no dedicated HR professional in the organisation. This is where outsourced HR services can provide a practical alternative.

Outsourced HR Services allow a business to use an external HR provider for some or all of its people-management requirements. Depending on the arrangement, support can range from HR advice, contracts and policies to employee relations, recruitment, HR administration, compliance and strategic people planning.

Apex HR LLC specialises in supporting SMEs and provides external HR support that can be tailored to the size, structure and people requirements of the business.

So, what are outsourced HR services and what do they include for UK businesses? This guide explains how HR outsourcing works, which HR functions can be outsourced, the different service models available, typical costs, benefits and what employers should compare before choosing a provider.

In This Guide

• What Are Outsourced HR Services?
• How Do Outsourced HR Services Work?
• What Do Outsourced HR Services Include?
• What HR Functions Can You Outsource?
• Types of Outsourced HR Support
• Who Uses Outsourced HR Services?
• Benefits of Outsourcing HR
• How Much Do Outsourced HR Services Cost?
• How to Choose an Outsourced HR Provider
• FAQs About Outsourced HR Services
• How Apex HR LLC Supports UK Businesses

What Are Outsourced HR Services?

Outsourced HR services are human resources functions delivered by an external HR company or consultant on behalf of a business.

Instead of employing an internal team to manage every HR responsibility, a business can outsource selected activities or a larger part of its HR function. As a result, the external provider can act as an extension of the business and provide additional expertise, capacity and practical support.

Depending on the agreement, outsourced HR services can include:

• HR advice and consultancy
• Employment contracts
• HR policies and employee handbooks
• Employee relations
• Disciplinary and grievance support
• Absence management
• Performance management
• Recruitment and onboarding
• HR administration
• Employment law guidance
• HR audits
• Manager training
• Workforce planning
• HR strategy
• HR software and systems

The important point is that HR outsourcing is not a single fixed package. Instead, businesses can choose a level of support that reflects their workforce size, internal HR capability, budget and the complexity of their people requirements.

How Do Outsourced HR Services Work?

When a business decides to outsource HR, the first step is usually to identify its current HR requirements. From there, the provider can assess which responsibilities should remain internal and which can be managed externally.

An HR provider may assess areas such as:

• Number of employees
• Existing HR processes
• Employment contracts
• Current HR policies
• Employee relations issues
• Recruitment requirements
• Management structure
• Compliance requirements
• HR technology
• Business growth plans

Based on that assessment, the provider can recommend an appropriate level of support.

Contact Apex HR LLC

Phone: +447762272692
Email: Hello@apexhrllc.co.uk
Address: London, United Kingdom
Website: Apex HR LLC

Ongoing Outsourced HR Support

Some businesses use outsourced HR services on an ongoing basis through a monthly retainer or another recurring support arrangement.

The external HR team may provide regular advice, manage employee relations matters, review documentation and support managers throughout the employee lifecycle.

Therefore, this arrangement can give the business an ongoing HR resource without requiring a full-time internal HR department.

Ad-Hoc HR Support

Businesses that have relatively straightforward HR requirements may only need support when a particular issue arises.

For example, they might contact an external HR consultant when they need help with:

• A disciplinary matter
• A grievance
• An employee dismissal
• Long-term absence
• A redundancy process
• A contract
• A workplace dispute

For businesses with occasional needs, this can provide access to specialist advice without committing to a comprehensive ongoing service.

Project-Based HR Support

Some HR requirements are temporary and can be managed as individual projects.

Examples include:

• HR audits
• Policy reviews
• Contract updates
• Organisational restructuring
• Redundancy programmes
• HR system implementation
• Employee handbook creation
• Manager training

Once the project is completed, the business may continue with ongoing HR support or return to managing those functions internally.

What Do Outsourced HR Services Include?

The exact services included depend on the provider and package. However, comprehensive outsourced HR services can cover most areas of the employee lifecycle, from hiring and onboarding to employee relations, performance and exit processes.

HR Advice and Consultancy

One of the most common reasons businesses outsource HR is to gain access to professional advice.

For example, business owners and managers regularly face questions about how to deal with employees fairly and appropriately.

An outsourced HR adviser can provide guidance on matters such as:

• Employee performance
• Absence
• Conduct
• Workplace conflict
• Flexible working
• Family leave
• Employment contracts
• Disciplinary procedures
• Grievances
• Termination of employment

As a result, having access to professional HR advice can help managers understand their options before taking action.

Employment Contracts

Employment contracts establish the terms and conditions of the employment relationship.

In addition, an outsourced HR provider can help businesses create, review and update employment contracts so that they accurately reflect the role and the organisation’s current arrangements.

Support may include:

• Employment contracts
• Offer letters
• Job descriptions
• Contract amendments
• Probation documentation
• Flexible working arrangements
• Employee variations
• Termination documentation

Businesses should ensure that their employment documentation reflects current legal requirements and the actual terms under which employees work.

HR Policies and Employee Handbooks

HR policies provide employees and managers with clear guidance about workplace expectations and procedures.

An outsourced HR provider can help create and maintain policies covering areas such as:

• Disciplinary procedures
• Grievance procedures
• Sickness absence
• Holiday
• Flexible working
• Equality, diversity and inclusion
• Bullying and harassment
• Family leave
• Data protection
• Health and safety
• Social media
• Performance management

Importantly, policies should not simply exist as documents. Managers also need to understand how and when they should be applied.

Employee Relations

In particular, employee relations is one of the areas where businesses often benefit from having access to experienced HR professionals.

An outsourced HR provider can support managers when dealing with sensitive or potentially complex employee situations.

This can include:

• Disciplinary investigations
• Disciplinary hearings
• Grievances
• Performance concerns
• Capability procedures
• Workplace conflict
• Absence issues
• Employee complaints
• Dismissals
• Redundancies

Therefore, external HR support can help managers approach these situations in a structured and consistent way.

Absence Management

Employee absence can affect productivity, staffing levels and team morale.

For example, outsourced HR support can help businesses establish appropriate absence-management processes and provide guidance when absence becomes prolonged or complex.

Support may include:

• Managing short-term absence
• Long-term absence
• Return-to-work processes
• Absence reviews
• Occupational health referrals
• Reasonable adjustments
• Attendance policies
• Managing recurring absence

Performance Management

Similarly, performance management is another area that can benefit from professional HR support.

An outsourced HR provider can help businesses establish clear processes for setting expectations, reviewing performance and addressing concerns.

This may include:

• Performance reviews
• Objectives and targets
• Performance improvement plans
• Capability procedures
• Manager guidance
• Employee development
• Documentation

As a result, a structured performance process can help managers address issues consistently while giving employees a clear understanding of expectations.

Recruitment and Onboarding

In addition, some outsourced HR providers support recruitment and onboarding.

Depending on the arrangement, this can include:

• Job descriptions
• Recruitment processes
• Interview support
• Candidate documentation
• Offer letters
• Right-to-work processes
• New starter paperwork
• Employee onboarding
• Probation reviews

Depending on their needs, businesses can outsource the entire recruitment process or only the HR elements surrounding recruitment.

HR Administration

For many SMEs, HR administration can consume significant amounts of management time.

An outsourced provider can take responsibility for some administrative processes, allowing business owners and managers to focus on their core responsibilities.

This may include:

• Maintaining employee records
• Preparing HR documents
• Updating employee information
• Managing HR correspondence
• Maintaining absence records
• Supporting onboarding
• Monitoring key HR dates
• Organising HR documentation

The precise administrative responsibilities should be agreed with the provider before the service begins.

HR Compliance

For UK employers, employment law creates a range of responsibilities that need to be managed consistently.

An outsourced HR provider can help businesses understand their obligations and maintain appropriate HR processes and documentation.

Compliance support may cover areas such as:

• Employment contracts
• Workplace policies
• Working arrangements
• Holiday entitlement
• Family leave
• Sickness absence
• Disciplinary and grievance procedures
• Equality and discrimination
• Employee records
• Changes to employment legislation

HR providers should not be viewed as a substitute for specialist legal advice where legal representation or advice from a solicitor is required. However, an experienced HR provider can help businesses identify when an issue may require further specialist support.

What HR Functions Can You Outsource?

Businesses do not necessarily need to outsource every HR responsibility. Instead, outsourced HR services can be structured around the functions that create the greatest need for expertise or capacity.

For example, a business can outsource one function, several connected activities or a much broader part of the HR operation.

Recruitment Outsourcing

Recruitment can be outsourced when a business needs additional support attracting and selecting employees.

This can be particularly useful during periods of rapid growth or when specialist recruitment expertise is required.

Payroll Outsourcing

Payroll is frequently outsourced to specialist providers.

Payroll outsourcing can involve:

• Salary processing
• Payslips
• Tax and National Insurance calculations
• Payroll records
• Statutory payments
• Payroll reporting

However, payroll is sometimes provided separately from broader HR outsourcing.

HR Administration Outsourcing

Businesses can outsource repetitive administrative responsibilities while retaining strategic HR decisions internally.

This can provide additional capacity without creating a larger internal HR team.

Employee Relations Outsourcing

Businesses can bring in external HR specialists when they need support with employee relations issues.

This can include disciplinary, grievance, performance, absence and dismissal matters.

HR Strategy Outsourcing

Importantly, outsourced HR does not have to be purely administrative.

Businesses can also bring in external HR expertise to support strategic areas such as:

• Workforce planning
• Organisational development
• Employee engagement
• Leadership development
• Talent management
• Succession planning
• Culture
• Business growth

This type of support is often delivered through a fractional or consultancy arrangement.

Types of Outsourced HR Support

There are several ways a business can structure its outsourced HR services, depending on how much responsibility it wants the external provider to take.

Full-Service Outsourced HR

Full-service outsourcing involves an external provider managing a broad range of HR responsibilities.

This could include:

• HR advice
• Contracts
• Policies
• Employee relations
• Recruitment
• Absence
• Performance
• HR administration
• Compliance
• HR strategy

Therefore, full-service outsourcing can be suitable for businesses that do not have an internal HR department or need substantial external support.

Fractional HR

Fractional HR provides businesses with access to an experienced HR professional for part of the working week or on an agreed number of hours or days.

Rather than employing a full-time HR manager, a business can access professional HR expertise according to its requirements.

For growing SMEs, this can provide regular access to HR expertise without requiring a full-time internal HR appointment.

HR Consultancy

By contrast, HR consultancy is generally more focused on advice, specialist projects or specific business challenges.

A consultant might be brought in to:

• Conduct an HR audit
• Review policies
• Support restructuring
• Develop an HR strategy
• Resolve a particular HR challenge
• Train managers

Co-Sourced HR

Meanwhile, co-sourcing combines internal HR resources with external HR expertise.

For example, a business might have an internal HR administrator but use an external provider for employee relations, employment law support and strategic HR.

This approach allows businesses to retain internal control while bringing in specialist expertise where required.

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Who Uses Outsourced HR Services?

Outsourced HR services can be used by organisations of different sizes, including small businesses, growing SMEs and employers with established HR teams.

Small Businesses

Small businesses often do not have enough HR activity to justify employing a full-time HR manager.

As a result, outsourcing can provide access to HR expertise when it is needed.

Growing SMEs

As businesses grow, HR requirements generally become more complex.

A growing company may need support with:

• Recruitment
• Employment contracts
• Management processes
• Employee relations
• Policies
• Performance
• Compliance

Therefore, outsourcing can provide additional HR capacity as the workforce expands.

Businesses With an Existing HR Team

Importantly, outsourcing is not limited to companies without HR employees.

An existing HR team may use an external provider to provide additional expertise or capacity during particularly busy periods.

Businesses Going Through Change

Similarly, organisational change can create significant HR requirements.

External HR support can be useful during:

• Business expansion
• Restructuring
• Mergers and acquisitions
• Redundancies
• Organisational redesign
• Leadership changes

Benefits of Outsourcing HR

Access to Specialist HR Expertise

One of the primary benefits is access to professionals who work with HR and employment matters regularly.

Consequently, this can give business owners and managers somewhere to turn when they face unfamiliar or sensitive HR situations.

Reduced Internal HR Workload

In addition, outsourcing administrative and operational HR tasks can reduce the amount of time managers spend dealing with HR.

This allows leadership teams to focus on customers, operations, sales and growth.

Flexible Support

Another benefit is flexibility. Businesses can choose the level of support they need.

A small company might use ad-hoc advice, while a growing business may require a comprehensive retained service.

Support With Compliance

Because employment requirements change over time, external HR providers can help businesses review their policies, documentation and processes as requirements change.

Support for Managers

Managers are often responsible for handling employee issues even when HR is not their primary role.

An outsourced HR partner can give managers practical guidance when dealing with performance, absence, conduct and employee relations.

Scalability

Your HR requirements may change as your organisation grows.

As a result, outsourcing allows businesses to increase or reduce the level of external support without necessarily restructuring an internal HR department.

How Much Do Outsourced HR Services Cost?

There is no single standard price for outsourced HR services in the UK. Instead, costs vary according to the scope and structure of the support.

The cost depends on factors such as:

• Number of employees
• Services required
• Level of HR support
• Business complexity
• Industry
• Number of locations
• Frequency of support
• Whether support is remote or on-site
• HR software requirements
• Whether individual projects are included

Providers may charge through:

• Monthly retainers
• Per-employee pricing
• Hourly rates
• Daily consultancy rates
• Fixed project fees
• Fractional HR arrangements

For example, a basic HR advice package will generally cost less than a comprehensive outsourced HR arrangement where the provider takes responsibility for significant parts of the HR function.

Therefore, businesses should compare what is included in the fee rather than focusing on the headline monthly price alone.

How to Choose an Outsourced HR Provider

Choosing an outsourced HR provider is an important decision because the provider may become closely involved in sensitive employee and business matters. For this reason, businesses should compare both the service scope and the way support is delivered.

Assess Your HR Requirements

First, identify the areas where you need help.

Ask:

• What HR tasks are currently taking the most time?
• What HR responsibilities are being managed internally?
• Where are the biggest gaps?
• Are managers confident handling employee issues?
• Do you need strategic HR support?
• Do you need regular or occasional advice?

Determine the Level of Support You Need

Decide whether you require:

• Ad-hoc consultancy
• A monthly HR retainer
• Fractional HR
• Full-service HR outsourcing
• Specific outsourced functions

Ultimately, your requirements should determine the model rather than the other way around.

Check the Provider’s Experience

Next, look for an HR provider with experience supporting businesses similar to yours.

Ask about:

• Relevant industries
• Business sizes
• HR qualifications
• Employment law knowledge
• Case studies
• Client references

Understand What Is Included

Before signing an agreement, ask for a clear breakdown of the services included.

Find out whether additional fees apply to:

• On-site meetings
• Complex employee relations cases
• Redundancy support
• HR audits
• Recruitment
• Training
• HR software
• Employment documentation

Consider Accessibility

Because HR issues can arise unexpectedly, accessibility should also be compared.

Ask how quickly you can contact your HR provider and whether you have a dedicated consultant or account manager.

Review Data Security

In addition, HR providers handle sensitive employee information, so data security should form part of the selection process.

Check how the provider manages:

• Employee data
• Confidential information
• HR records
• Access controls
• Data storage
• Data protection responsibilities

Look at the Long-Term Relationship

Finally, consider whether the provider can understand your organisation rather than simply complete individual HR tasks.

A strong working relationship can allow the provider to understand your workforce, management style and business objectives over time.

Looking for Outsourced HR Support?

If your business is considering HR outsourcing, start by identifying which responsibilities take the most management time, where specialist expertise is needed and how much ongoing support the organisation requires.

Explore Apex HR LLC’s Outsourced HR Services to see how external HR support can be structured around your business.

Need help deciding what level of support fits your organisation? Contact Apex HR LLC to discuss your workforce, current HR capacity and people priorities.

Phone: +44 7762 272692
Email: Hello@apexhrllc.co.uk
Location: London, United Kingdom

FAQs About Outsourced HR Services

1. What are outsourced HR services?

Outsourced HR services are HR functions delivered by an external HR company or consultant. A business can outsource individual tasks, selected functions or a much broader part of its HR operation depending on its requirements.

2. What is included in outsourced HR?

Services can include HR advice, employment contracts, HR policies, employee relations, absence management, performance management, recruitment, HR administration, compliance and strategic HR support. However, the exact scope depends on the provider and package.

3. Can I outsource only part of my HR?

Yes. Businesses can outsource individual functions such as recruitment, payroll or employee relations while retaining other HR responsibilities internally.

4. Is outsourced HR suitable for small businesses?

Yes. Outsourced HR can give small businesses access to professional HR expertise without requiring them to employ a full-time HR manager.

5. What is the difference between outsourced HR and HR consultancy?

Outsourced HR generally involves ongoing responsibility for agreed HR functions, while HR consultancy is often focused on advice, projects or specific business challenges.

However, providers may use these terms differently, so businesses should compare the actual services included.

6. Can an outsourced HR provider handle disciplinary procedures?

Many HR providers offer support with disciplinary procedures, investigations and hearings. The exact level of involvement depends on the service agreement.

7. Can outsourced HR help with employee grievances?

Yes. HR providers can provide guidance and practical support when businesses need to manage employee grievances, although the precise scope of support will depend on the provider.

8. Does outsourced HR include payroll?

It can, but not always. Payroll may be included as part of a wider HR service or provided separately by a payroll specialist.

9. Is outsourced HR the same as employing an HR manager?

No. An outsourced HR provider is an external business or professional providing agreed HR services, whereas an HR manager is directly employed by your organisation.

As a result, outsourcing can provide access to broader HR expertise without requiring a full-time internal HR position.