7 Surprising HR Outsourcing Statistics You Need To Know Now In 2024

The ever-changing world of today needs ultimate HR management services which by the way should be adaptable for further growth! Because here in 2024, everyone is looking for the best way to streamline operations, cut costs, and focus on their core business functions.

And for that reason, nowadays, people are getting more and more focused on HR outsourcing Statistics! Furthermore, in this blog, we will be explaining what this HR outsourcing is, further details regarding the outsourcing HR functions, and more!

Because this outsourcing is not a new thing but a modern solution many businesses are already embracing it and benefiting themselves. Furthermore, the latest statistics and trends of outsourcing that we will soon be discussing with you will show some really surprising insights about how it’s evolving and impacting companies globally.

So, let’s start the blog and dive into nine compelling statistics highlighting the benefits of HR outsourcing statistics and why it’s becoming a critical strategy for modern businesses.

What are HR Outsourcing Statistics?

HR outsourcing statistics is quite a popular term that is getting more and more famous among businesses of all sizes. Here, the basic meaning of outsourcing is to hire a third party to handle either some of your HR services or all of them.

If you were to witness the recent statistics of the HR outsourcing statistics market globally, then you won’t believe that by 2028 it is projected to reach $45 billion! We know that’s huge, but with that, you can easily understand the widespread need to cut the costs of human resources HR and focus on core business functions.

To be specific, small and medium-sized enterprises (also known as SMEs) are particular ones, that are keen on outsourcing HR tasks to save time and resources. And such companies that outsource HR services like that [mostly those SMEs we explained above] can easily save up to 20-30% on HR costs.

And that makes this human resources outsourcing an attractive option for organizations looking to optimize their operations.

What does an HR Outsourcing Company Provide?

HR outsourcing companies like Superworks provide a wide range of services designed to manage and streamline a business’s human resource functions. Such companies take on tasks that would traditionally be handled in-house and with much effort, and on that their services are as:

• Payroll Management: It helps with timely & accurate payroll processing, and that also includes tax withholdings & compliance based on the labor laws of the respective company!
• Recruitment and Staffing: Here it provides expert assistance throughout the hiring process, from sourcing candidates to onboarding new employees.
• Employee Benefits Administration: Outsourcing here, directly streamlines the management of health insurance, retirement plans, and other employee benefits.
• Compliance and Legal Advisory: It continues to keep the company updated with the ever-changing labor laws and also ensures compliance with employment regulations to avoid legal issues.
• Performance Management: Here, it provides the tools & processes for employee performance reviews, goal setting, and development plans.
• Training and Development: Outsourcing here provides the needed training programs to enhance employee skills & improve overall workforce productivity.
• HR Consultancy: It also provides strategic advice on organizational restructuring, talent management, and employee engagement strategies.

Top Human Resource Outsourcing Trends

1. Rising Popularity of HR Outsourcing

As we have discussed above, the outsourcing market is expected to grow into a multi-billion dollar industry by 2028, and that is the reason behind its rising popularity. Furthermore, it is also spreading over the global HR outsourcing market at a lightning-fast speed. Because recent studies show, around 80% of companies outsource at least one HR function.

These HR outsourcing statistics we are getting are the people’s favored HR outsourcing trends, that drive the desire to optimize numerous HR processes. These outsource HR functions to the point including processes like recruitment, payroll, and compliance, which by the way are traditionally time-consuming and prone to errors when handled in-house.

It helps companies in the market to enhance efficiency and reduce operational overhead, whether it’s payroll processing or managing employee benefits. And for that reason, companies are gripping the HR outsourcing statistics market more and more firmly.

2. Cost Savings Drive HR Outsourcing Adoption

Outsourcing here can never be the offloading tasks because it’s just way more than that! And to be specific it’s like a strategic move that leaves a positive impact on a company’s growth, like it can be used to;

• Help in cost savings
• Make a strategic hiring plan for your business
• benefits administration

As per the HR outsourcing statistics, companies can save an average of 22% by outsourcing HR operations, making it one of the most cost-effective ways to manage HR tasks! Partnering with specialized companies that outsource HR functions can help you on a greater scale, and you can avoid the high costs that are probably associated with hiring, training, and maintaining an in-house HR team.

Around 80% of the companies are embracing the HR Outsourcing!

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3. Increased Use of Cloud-Based HR Solutions & HR Outsource HR Functions

The rise of cloud technology is indeed one of the most amazing traits as of now, because through that only we have AI in HR statistics. Because with this modern tech only we the businesses have access to better and streamlined workforce management.

And on that note, can you believe that in 2023, almost 94% of businesses use cloud services, and 67% of business infrastructure is based on this cloud system? All such small business HR outsourcing statistics that we have mentioned here exist because of this modern tech of cloud systems only.

Furthermore, the scalability of cloud services also provides access to world-renowned outsourcing providers to tailor their solutions to the specific needs of each business. And instill further easiness to manage growth and operational changes.

4. Rise of Recruitment Process Outsourcing (RPO)

Recruitment as per the experts is one of the most challenging aspects of HR, and with a piece of critical information about human resources and recruitment can quite assure it. This Recruitment Process Outsourcing (RPO) that we are talking about can easily save companies up to 38% on hiring costs.

Furthermore, to be specific, the employees who have been hired through RPO tend to be more engaged and have higher retention rates. Moving forth as per the HR outsourcing statistics, such RPO providers leverage the latest AI tools for HR and help to find top talent quickly!

Moreover, these RPOs also ensure companies can fill open positions faster with better-qualified candidates. Such an amazing kind of approach not only reduces the time-to-hire but also helps in improving the quality of the workforce, ultimately driving better business results.

5. Increased Emphasis on Employee Experience and Well-Being

Modern companies and their HR functions can lead to a better employee experience, and that is a fact. The reason, behind that, is HR outsourcing which consistently plays a significant role in this area. As per the HR outsourcing statistics, around 68% of companies see this outsourcing as a way to enhance the employee experience and morale.

HR outsourcing statistics providers are well-versed in the latest trends and tools that boost employee satisfaction, from mental health resources to flexible work arrangements. By enhancing the employee experience, companies can reduce turnover and foster a more engaged and productive workforce.

6. Outsourcing HR for Risk Mitigation

Regulatory compliance and risk management are increasingly complex areas of HR, particularly in a post-pandemic world. 56% of business owners outsource HR to mitigate risks related to compliance and workplace safety, allowing them to focus on their core business operations without the constant worry of navigating changing regulations.

Outsourced HR services small business brings expertise in managing compliance issues ensuring that companies continue to adhere to the latest labor laws & workplace safety standards. This not only protects the business but also creates a safer and more compliant working environment for employees.

7. Growing Popularity of Professional Employer Organizations (PEOs)

Professional Employer Organizations (PEOs) are gaining more and more traction as an attractive option for small and medium-sized businesses. These PEOs act as co-employers, that handle all the HR tasks so that businesses can focus on growth.

As per the HR outsourcing statistics if we tell you, over 15% of companies having 10-99 employees are using such PEOs. Cause it offers a comprehensive suite of HR services including payroll, benefits administration, and regulatory compliance.

Such kind of arrangement provides small businesses with great access to the same level of HR expertise as larger companies. And help them to be far more competitive and better equipped so they can manage their workforce quite effectively.

Conclusion

Here, while we are concluding, we have availed all the outsourcing hr functions and trends to you, and also have mentioned how this outsourcing is evolving rapidly and can help companies greatly. Once you have understood these surprising HR outsourcing statistics, you will be able to make more informed decisions regarding optimizing your HR operations.

And just so your business can have and maintain a competitive edge in the market, we want to suggest one of the best HR software for you- Superworks! With this software, you can get the best analytics in HR for your company, and can efficiently enhance your HR functions greatly.

With Superworks, you can do cost savings improve employee experiences through risk mitigation, and further streamline all the HR processes. In short, you literally can transform your business operation like, never before, so connect now, and start experiencing growth.