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Human Resources Outsourcing

Managing different aspects of employee management processes on a day-to-day basis is a complicated task—one that requires a substantial amount of energy, time, and expertise. By adopting a sound and cost-effective human resources outsourcing solution, you can transfer this responsibility to a third party and focus solely and completely on what you do best- managing and growing your business!

Why do so many companies opt for some form of human resources outsourcing?

The reason is simple: hiring and developing the knowledge and expertise that is required to efficiently manage various employee management tasks on a daily basis is costly, energy sapping, and time-consuming.

Using a human resources outsourcing model is cheaper and frees the employer from the burden of running various employee management tasks. Outsourcing various human resources tasks provides the employer with enough time and energy to efficiently run the business.

What are the different human resources outsourcing models?

The two common HR outsourcing models are: Administrative Services Organization (ASO) and Professional Employer Organization (PEO).

Both models provide companies an opportunity to outsource various functions of employee management such as payroll administration and tax compliance, various human resources functions, worker’s compensation administration, and employee benefits administration in a cost effective manner. (See also ASO vs. PEO Comparison).

The ASO model generally allows you to successfully implement the following:

  • Outsource employee management processes such as employee benefits administration, payroll administration and tax compliance, retirement services, and human resources functions.
  • Retain your employee benefits or ask the third-party to quote, implement, and manage benefits on your behalf.
  • Retain your own SUTA rate.
  • Retain your own worker’s compensation policy or ask the third party to quote, implement, and manage them on your behalf.

The PEO model allows you to successfully implement the following:

  • Outsource employee management processes such as employee benefits administration, retirement services, payroll administration, tax compliance, retirement services, worker’s compensation administration, and human resources functions.
  • Customized benefits for your company, generally through a single group health insurance carrier.
  • Come under PEO’s SUTA rate.
  • Utilize the PEO’s workers' compensation policy.

Both ASO and PEO models have certain distinct advantages. The major difference between these two models is that unlike the PEO model, the ASO model has no employee management relationship between the provider and your employees. In addition, a PEO model is significantly costlier than the ASO model. (See also ASO / PEO Cost Comparison).

How to determine which human resources outsourcing model is best suited to your business.

Let our HR experts explain the important points (both the advantages and disadvantages) of these two human resources outsourcing models to help you determine which HR outsourcing model is best for your business. If you are interested in learning more about our HR outsourcing solution only, select your state below to learn more:


To learn more about Advantage SBS Human Resources Outsourcing solutions or to speak with a representative, contact us today at (888) 762-2075 or complete our quote request form here.