How to decide between outsourced and in-house HR services

How to decide between outsourced and in-house HR services

Structural organisation change is a big deal. Whether you’re growing fast, or seeking cost saving initiatives, you may find yourself exploring how you configure your HR services. Should you supply HR provision in-house or outsource it? Both options come with sets of benefits and challenges, and the right solution is likely to be as unique as your organisation itself. 

So, what are your business’s needs, circumstances, and long-term strategic aims? We’ll look at the major differences between in-house and outsourced HR, highlight the unique advantages and potential pitfalls of each, and help you understand how to make the best choice for you. We can even help to find the perfect individuals for you, but more of that later!

In-house HR Teams

For many businesses, regardless of size, in-house HR offers a personal, invested and strategic touch that can be challenging to achieve through an external provider.

Familiarity and Commitment

An in-house HR team is an integral part of your company’s fabric. They are representatives of your brand, company values, and workplace culture. These factors are pivotal when it comes to retaining staff across the organisation, since this feeling of value and investment is passed on through that team’s HR initiatives.

Bespoke Programs

In-house HR teams have the autonomy to create programs and policies that are bespoke to your company’s needs, rather than utilising generic tools or training programmes. When as many as 94% of workers have left a role because of lack of training, relevant programmes are incredibly important.  

Strategy and Culture 

Your HR Director should be part of the key decision making and strategy that is designed to optimise productivity and staff retention across your organisation. They will understand how to adjust strategies in an agile way to address shifting needs or capitalise on emerging opportunities. When these considerations are made at the top level, they are more instrumental in the success of a business. 

Outsourced HR Services

Outsourced HR services may be split into two different provisions. Freelance HR Advisors can provide expertise on a more ad-hoc basis, and some elements of an HR team’s remit can be supplied through self service software solutions. Outsourcing in this way can be more cost-effective than a full in-house team. This can be a priority for some smaller organisations, especially in the early phases of a company’s growth. However it’s important to remember that there are indirect cost savings to be made through good HR staff.


If you require a specific specialism, outsourced HR consultants can be appointed with this in mind. Outsourcing your HR services to an agency can give you access to a diverse skill set without the need to maintain a large in-house team. However, don’t forget that these individuals will not have the experience and knowledge of your organisational history and culture.

Scalability and Flexibility

The dynamic nature of some businesses can benefit from the scalability and adaptability of outsourced HR. As a business grows or experiences fluctuations in workforce needs, an outsourced provider can scale its services accordingly, without the fixed costs associated with a full time in-house team.

Self Service

Smaller businesses who choose to licence self service HR software can save on the costs of direct HR employment or agency fees. It’s worth remembering, though, that although these models cover many bases, they require the time and energy investment of your workforce. This is instead of time spent on their own roles, so the impact is actually quite complex to measure. 

HR Staff and Software 

In many cases, the best solution is actually a blend of in-house and outsourced HR services. This is especially true when it comes to HR software. With the more run of the mill HR tasks covered by technology, good HR people can work more productively. 


The great thing about outsourcing some HR services to a platform is that it increases accessibility. Whether this means online training, more transparent communications or connectivity between remote organisations. 

Strategic Alignment

The flexibility of many hybrid models means HR strategies become more closely aligned with broader business goals. While HR teams concentrate on key policies and strategies, those more basic essential daily HR functions can be outsourced.


While streamlining HR administration saves time for HR teams, the resources must be set up in a strategically sound way. By this we mean that HR provision should avoid becoming too impersonal. With the input of good HR managers, organisations can make the most of technology whilst maintaining engagement. 

Employing your HR Team 

Building an in-house team that’s truly effective requires a clear recruitment strategy that identifies and onboards the right HR professionals. This means accessing a talent pool of individuals who are not just qualified but also aligned with your organisational values and culture.

Specialist HR Recruitment

This is where it pays to work alongside a specialist HR recruitment provider. At HR Talent, we can advise at any point in the process. So if you need help with crafting a job description and planning the recruitment process, we can support you.

The Talent Pool

As an industry focussed service, working with a specialist like HR Talent gives you access to the level of talent that you may not otherwise have. With our pool of potential candidates and personal approach, we can identify the individuals who will excel in your business’s unique environment.

Matching Individuals

It’s not just about finding qualified applicants, though. An experienced HR recruiter knows how important it is to have a match of values, ambition, and interest. We know that you want your HR team to be in place long term, so finding the right match is incredibly important. 

Recruitment Strategies

Which recruitment strategies are best for your circumstances? With experience and knowledge, your HR recruitment service will set up the right strategies for recruitment success. Then, in turn, your new HR team will have the expertise to roll out these strategies for your future organisation growth.

Of course, the decision between different human resources models isn’t always black and white. So you need to work out which elements of outsourced or in house HR services may work for you. The aim is to find a perfect employee balance with elements that may be more prudent to outsource with software solutions. At HR Talent, we provide recruitment support to help you to find the right individuals for your organisation’s unique circumstances. Contact us to begin the conversation!

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