Small Business Glossary and Definitions

Human Resources Outsourcing (HRO) uses third-party vendors to perform one or more human resources management functions in order to address highly specialized needs as well as potential cost-savings. As human resources responsibilities have become more complex, it is often necessary to outsource certain areas of HR management to maintain up-to-date compliance with workplace regulations and administration.

Management matters that requires specialized knowledge, such as 401(k) administration or legal compliance, are often outsourced.

Outsourcing can free up staff to focus on more direct business needs, such as strategy development, organizational management, and innovation.