What are HR Services? Definitions, Examples, and Tips

Learn what common HR services are and how they can support your employees

From an employee’s first day with a company to their last, human resources teams are responsible for overseeing the entire employee lifecycle. Recognizing that HR teams shouldn't handle this burden alone, many organizations turn to third-party partners to outsource various HR services, including payroll, benefits administration, compliance management, and more.

Curious if outsourcing your HR services is the right move for your company? In this article, we dive into the realm of HR services, exploring what they are and why they’re crucial to business success. Plus, we examine why using a third-party HR service vendor might actually be holding your organization back — and why you should consider leveraging comprehensive HR solutions instead.

What are HR services?

HR services are activities and functions that help businesses effectively manage their workforces. They cover the entire employee lifecycle and collectively contribute to a positive work environment by:

Maintaining organizational safety and compliance
Fostering employee productivity, satisfaction, and engagement
Aligning an organization’s workforce with its goals and values
Driving efficiency and productivity

These functions not only protect your business, but they also help build a workplace that engages employees and puts your people at the heart of everything you do.

Why do some businesses outsource HR services?

While HR services are crucial to business success, not every business has the time, resources, and expertise necessary to oversee every service in-house. In order to still offer these services, many companies choose to outsource specific functions to two types of vendors:

Third-party HR consultants, or professionals or organizations that provide expert advice and services to organizations looking to optimize their workforce strategies.
Professional employer organizations (PEOs), or a third-party entity that provides comprehensive HR outsourcing services to businesses.

Companies of any size may choose to partner with an HR consultant or PEO. While a growing start-up might turn to a PEO to get its HR programs off the ground or build a more competitive benefits package for its employees, an established enterprise company might lean on an HR consultant to help scale its programs or leverage their specialized knowledge.

The biggest benefit of outsourcing? Efficient HR processing services companies can handle day-to-day operations and administrative tasks (like payroll, benefits administration, or compliance management), giving internal HR teams more time to focus on strategic initiatives. This partnership frees up businesses from the intricacies of HR management and empowers them to concentrate on other areas of the business, like growth, hiring, and engagement.

Examples of key HR services

HR services are any task that relates to human resources — and there are a lot of them! From handling routine HR tasks to navigating complex compliance requirements, here’s an extensive look at some of the most common HR service offerings:

1. Recruitment

A company’s success rides on its ability to find the right people for the job. Posting jobs, screening resumes, interviewing candidates, extending offers, and onboarding new hires — there’s a lot of work that goes on behind the scenes to hire top talent.

2. Onboarding

First impressions matter. That’s why you want to wow your newest employees from day one. Building a more efficient new hire orientation program can spare new hires from a pile of paperwork and let them dive right into learning more about your business and their role. From streamlined paperwork and documentation processing tools to interactive virtual training programs, a lot goes into employees onboarding in order to get your new hires up to speed quicker and feeling like a part of your company from day one.

3. Benefits administration

Benefits administration plays a pivotal role in both attracting and retaining top talent. HR teams must manage and oversee employee benefits like health insurance, retirement plans, and other supplementary perks to ensure that employees have access to comprehensive and competitive coverage. Aside from building the perfect benefits package, HR teams must also communicate offerings to employees, oversee open enrollment, assist with employee inquiries, and stay abreast of regulatory changes.

Benefits administration is often a big strength for PEOs, as they can help small businesses provide competitive employee benefits that are typically out of reach. They can also help automate open enrollment and field employee questions on your behalf, saving HR teams valuable time.

4. Payroll processing

Employee payroll is something you don’t want to get wrong. That said, payroll is a complex HR function, which is why many organizations choose to outsource it. Most HR service providers can handle complex compensation models (like bonuses, commission, and profit sharing), benefits deductions, wage garnishments, and payroll taxes on your behalf so that your employees get paid accurately and on time and your business remains compliant.

5. Compliance

Noncompliance can be costly. When it comes to adhering to labor laws and regulations, it never hurts to get a little help. HR compliance services providers can help protect your business by proactively alerting you of any new or changing legislation, offering robust self-serve resources, and dedicated support for any specific compliance questions.

6. Performance management

Boosting employee productivity and alignment can do wonders for your business’ bottom line. To help, many HR teams establish cascading goal-setting, train managers and employees on how to give and receive constructive feedback, and organize semi-annual or annual compensation and performance reviews. These initiatives not only help evaluate employee performance, but they also help identify areas of growth and show your business is invested in employees’ careers.

7. Learning and development

Your employees are your most important company resource, so it’s in your business’ best interest to invest in their skills and growth. Wondering how? There are many different forms of learning and development (L&D), like mentorship programs, job shadowing, classroom learning, stretch projects, and more. Of course, training managers on how to create employee development plans and set professional goals is also a large part of L&D.

8. Employee engagement

From promoting work-life balance to regularly recognizing employees, there are many factors that can drive engagement. That’s why businesses must conduct regular employee engagement surveys to evaluate business practices and identify areas for improvement. Based on this targeted feedback, HR teams must take swift action to build a better workplace for their employees and keep them happy and healthy.

What HR services are typically outsourced?

While almost every HR service can be outsourced in some way, there are a few main functions that businesses typically seek extra help with:

Payroll processing: Many companies decide to outsource payroll to ensure paycheck deductions are done correctly, employee payments are accurate and on time, payroll taxes are paid, and tax filing deadlines are met.
Benefits administration: Outside vendors can negotiate competitive benefits packages with insurance carriers on their client’s behalf, handle employee enrollment and queries, and navigate Affordable Care Act requirements and filings.
Risk management and compliance: Many organizations turn to the experts for help when it comes to following local, state, and federal labor laws, so they can rest easy, knowing their business is protected. HR compliance services vendors can handle record keeping, report filing, audits, workplace safety programs, and training programs.
Employee onboarding: If businesses lack the necessary facilities and technologies needed for candidate drug screenings and background checks, they often turn to third-party providers for help.
HR strategy: Organizations often choose to outsource their HR strategy to leverage specialized expertise, improve efficiency, and strategically allocate business resources.

While these are among the most commonly outsourced functions, businesses may choose to outsource any HR service based on their specific business needs. This allows organizations to play to their strong suits and lean on outside expertise when necessary to enhance efficiency.

How HCM software can help streamline HR services

Although PEOs and HR consultants offer time-saving benefits, they do have one big catch: they require your business to relinquish control over your HR processes. While this might not be an issue for some smaller organizations, there may come a time in your business’ growth journey where you want to have more control over your HR operations and visibility into your people and workplace data.

Of course, cost could be another deciding factor as well. Outsourcing can be expensive, so your business may decide it’s a better investment to hire additional headcount to oversee such responsibilities in-house.

Whatever your reasoning may be, transitioning off a PEO or deciding not to use consultants can greatly benefit your business. But, what are the alternatives? Comprehensive HR solutions like human capital management (HCM) platforms give organizations greater control over their HR initiatives and overall employee experience.

An HCM solution gives businesses the ability to bring all their HR services in-house, and it offers tools and features that help automate tasks, streamline processes, and drive efficiency. This comprehensive solution efficiently manages personnel data, handles robust payroll tasks, optimizes scheduling efficiency, and helps attract, nurture, and grow your employees — all in one centralized system.

The benefits of a using an HCM platform for cloud-based HR services

In fact, here are a few benefits of using HCM software instead of a PEO or consultant:

1. Streamlined HR workflows

Leveraging cloud-based software, your business can consolidate its people data and capitalize on automation to streamline processes. When you use an HCM platform, your data can work together more efficiently. For instance, your time and attendance data can seamlessly flow into your payroll tool, helping you pay employees accurately and on time.

2. Better, data-driven decisions

With all your people data in one place, you can gain newfound visibility into your workforce and business initiatives. Armed with these insights, you can make more strategic decisions around how to optimize productivity, drive better performance, and invest in your people.

3. Cost effectiveness

PEOs typically charge a percentage of payroll or a fixed fee per employee, which can become costly as an organization grows. In contrast, HCM platforms often offer scalable pricing models that allow for more predictable costs and potentially lower expenses. Since HCM platforms empower organizations to bring certain HR functions in-house, they can also help reduce reliance on external service providers and their associated fees.

4. Access to specialized expertise

Switching to an HCM platform doesn’t mean you’re on your own. HCM software companies often offer teams of dedicated subject matter experts to answer your pressing questions, offer best practices, and help you get the most out of their platform and your workforce.

5. Access to the latest technology

HCM solutions are constantly being innovated to help customers get the most out of the platforms. By partnering with a company that offers HCM solutions, you often can gain access to their easy-to-use technology, self-service mobile application, and even artificial intelligence tools, like UKG Bryte.

How UKG’s comprehensive HR solutions suite can help your business succeed

If you’re looking to improve the efficiency of your organization’s HR services, you’ll need a cloud-based HR services solution like human capital management. Luckily, UKG has you covered. Our comprehensive HR solutions suite has everything enterprise businesses need to serve their people — including human resources, compliance, payroll, talent management, time and attendance, strategic workforce planning, scheduling, and more. And, of course, the biggest benefit of all is having all your people information in one place, giving you visibility into your workforce so you can make people-driven decisions that guide your business to success.

Interested in learning more? Watch a product tour of UKG Pro^® now and see firsthand how you can use an HCM solution to deliver people-first HR services and streamline your HR practices.