The cost of HRO services varies widely. Most providers charge for their services on the basis of two models: by the individual service provided or by a subscription plan that includes a set of features and / or services.
Consider your business needs before purchasing a bundle subscription – you don’t want to pay for services you don’t need.
For small and medium-sized businesses, base costs typically range from $ 50 to $ 100 per employee per month.
Other “additional” costs
If you need what many HRO providers consider to be “add-on services,” plan to increase your costs from $ 20 to $ 50 per employee per month. This cost is also influenced by the size of your business, whether you have multiple locations, and the complexity of your organization.
In addition to the costs of the service, there are one-time implementation costs. These fees generally range from $ 1,000 to $ 3,000. Some HROs reduce or waive fees. Most HROs do not require you to sign an annual contract, but they will require 30 days notice before terminating service.
Some perspectives on the costs of an HRO
When considering the costs of an HRO, try not to panic. We recommend that you add your total costs to what you currently spend on human resources management, your HRIS (human resources information system) and payroll, benefits administration (including COBRA, flexible spending and health savings accounts, 401 (k) management and tax preparation). These costs can all be absorbed under the HRO partner model. Seen in this light, the financial comparison is more manageable psychologically (and financially). For many small businesses, switching to an HRO almost always results in cumulative savings, especially when you factor in opportunity costs and overworked and stressed HR team members.
Advice: The initial cost of implementing an HRO is usually offset by the long-term savings you realize by not having to maintain an in-house HR department.