The Human Resource (HR) department is critical for employee satisfaction in any firm. Some businesses don't have the staff, the budgets or the inclination, to deal with the nitty-gritty of HR management, so they opt for outsourcing. Deciding which functions to offload and which firm to outsource is also a major decision.
HR functions include Payroll administration (producing checks, handling taxes, dealing with sick time and vacations), employee benefits (Health, Medical, Life insurance, cafeteria, etc), human resource management (hiring and firing, background interviews, exit interviews and wage reviews), risk management (workers' compensation, dispute resolution, safety inspection, office policies and handbooks) and others.
HR outsourcing Services could fall into one of four categories: PEOs, BPOs, ASPs, or e-services.
A Professional Employer Organization (PEO) takes legal responsibility for employees. The PEO and business owner are partners, with the PEO handling HR aspects and the business handling all other aspects. BPO refer to all fields, but specifically for HR, a BPO would ensure that a company has access to latest technologies. Application Service Providers (ASPs) host HR software, on the web and rent it to users. E-services are those HR services that are web-based.