HR and payroll outsourcing FAQ

Get answers to frequently asked questions about outsourcing HR and payroll

February 27, 2025

For many organizations, particularly small and midsized teams, hiring and maintaining staff for human resources and payroll functions can be a challenge. Ensuring compliance with regulations, managing employee information efficiently and prioritizing data security all further complicate these tasks. Increasingly, companies are outsourcing HR and payroll functions and reclaiming time for growing their business.

Integrated HR and payroll managed services can boost your operational effectiveness, allowing you to leverage experience in HR and payroll management, and reduce the risk of errors. Tapping into a trusted third-party resource also reduces administrative burdens, mitigates risks, increases reliability with emergency backup and allows staff to focus on core business objectives.

Whether navigating regulatory changes, managing employee benefits or enabling accurate payroll processing, RSM’s integrated outsourcing solutions are designed to drive operational excellence and support long-term growth. But is this approach right for you? This FAQ is designed to answer your questions about transforming your HR and payroll efforts without the burden of maintaining a large in-house team.

6 tips for outsourcing HR and payroll

Assess your business needs

Evaluate which HR and payroll functions are most beneficial to outsource based on your company’s unique requirements, challenges and goals.

Define the scope of work

Clearly outline the tasks and responsibilities you expect the service provider to manage, ensuring alignment with your business objectives.

Choose the right provider

Research and select a service provider with a strong reputation, proven experience and a service model that aligns with your company’s values and needs.

Collaborate on setup

Work closely with the provider during the onboarding process to ensure they understand your business needs and customize their services accordingly. In addition, use technology to streamline processes and maximize the value of outsourcing. 

Maintain regular communication

Establish consistent touchpoints with your provider to review progress, address concerns and ensure they’re meeting your expectations.

Evaluate performance regularly

Periodically assess the provider’s performance and the value they’re delivering. Use this feedback to refine the relationship and address any gaps.

6 tips for outsourcing HR and payroll

Evaluate which HR and payroll functions are most beneficial to outsource based on your company’s unique requirements, challenges and goals.

Outsourcing your HR and payroll functions

Why should a company consider outsourcing HR and payroll functions, especially during growth or in complex situations?

Many organizations, particularly small and middle market firms, often rely on a single employee or a small team to handle HR and payroll. While this approach may work for routine tasks, whenever complex challenges arise, such as regulatory compliance, payroll system setup, benefits administration or drafting an HR handbook, staff can easily become overwhelmed and may not have the knowledge or experience needed to perform such tasks.

Growth and acquisitions further signal the need for outsourcing.
Attracting, training and retaining skilled professionals to support expansion is both costly and time-consuming. Internal teams may lack the specialized experience required to effectively manage the complexities of a dynamic, growing business.

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Outsourcing to a firm like RSM provides access to seasoned advisors with extensive knowledge of HR and payroll best practices. These professionals are equipped to handle challenges efficiently, strengthening compliance, streamlining operations and supporting scalability. With RSM’s integrated approach, businesses can quickly adjust the services they need as they grow, enabling leaders to focus on core objectives with confidence.

Which platforms does RSM use with its clients?

Unlike most consulting firms or professional employer organizations (PEOs), RSM is a platform-agnostic firm. Your dedicated consultant and managed services team act as an extension of your business, providing comprehensive HR and/or payroll support on your existing technology, or we can assist you in identifying, sourcing and implementing the platform that best fits your needs. Regardless of the technology you choose, our team brings best practices and streamlined processes to maximize efficiency and effectiveness.

Is it possible to choose either HR or payroll outsourcing rather than both services?

Yes. RSM offers managed services for both HR and payroll functions, allowing you to outsource just one function or select specific services à la carte. Should your needs evolve, you have the flexibility to expand your engagement to include integrated HR and payroll coverage, supported by RSM’s certified, experienced team. That said, the value of using both services and having a fully integrated solution is that it increases efficiency and enables your business to reduce administrative burdens.

In other words, RSM tailors its engagement and services to align with your business needs and unique requirements. With a deep bench of advisors and industry specialists, we’re equipped to support your organization through nearly any business challenge.

Outsourcing your HR function

Why choose HR outsourcing over in-house HR or a PEO?

Regardless of the size of your organization, several operational challenges are associated with handling HR with an in-house person or team. Some of the most common reasons for outsourcing this critical function include:

  • Talent challenges such as finding HR candidates with the right experience, the need to provide ongoing training, the frustration of turnover and the expense of the recruiting, hiring and onboarding cycle
  • Staying up to date on employment laws, compliance requirements and emerging trends
  • A lack of industry and/or technical knowledge
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While a PEO acts as a co-employer offering human capital services, it may not provide the flexibility or scalability to support your business needs.

Outsourcing your HR function to RSM redefines how your organization operates. Whether you need staff augmentation, HR advisory, process outsourcing or HR services for M&A integration support, our advisors deliver tailored solutions that combine people, process and technology to address your unique HR challenges, enabling you to get back to your core business priorities.

RSM provides HR services that support the full employee lifecycle, including:

  • HR strategy and advisory services
  • New hire onboarding
  • Benefits administration
  • Policies and compliance
  • Employee relations
  • Leave of absence administration
  • Offboarding

Our advisors listen to understand your needs and recommend solutions that best fit your business.


Outsourcing your payroll function

How can outsourcing the payroll function benefit our business?

Many organizations find it difficult to navigate the complexities of ever-changing regulations, policies and advancing technology with their existing in-house payroll team. The stress, burnout and risk factors associated with these challenges can make in-house payroll processing unsustainable, prompting the decision to explore an outsourced solution. Leveraging the experience, knowledge, reliability and wide network of resources of a managed payroll team offers several important benefits, including:

  • Elimination of payroll staff recruitment, training and turnover
  • Confidence in payroll processing and compliance
  • Built-in backup for business continuity
  • Future-proofing for scalability
  • Reduced risk with security and confidentiality issues
  • Better employee experience 
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Our experienced payroll specialists begin by working to understand your needs and objectives and then customize a plan that aligns with your organization’s business strategy. We then leverage your technology to optimize payroll processes, reduce risk, maintain compliance and elevate the employee experience. Companies that choose to pair payroll services with HR outsourcing have an integrated, efficient and reliable solution to develop long-term payroll and HR excellence that is responsive to organizational change and scalable to support growth.

Protecting and optimizing your payroll process with quality outsourcing eliminates the hassle of hiring, training and retaining in-house staff. Sometimes, clients choose to begin with augmenting only the part of their payroll process that feels insecure. To best support our clients, RSM offers a selection of services to fulfill any level of support, including:

  • Fully managed payroll
  • Interim payroll support
  • Payroll tax oversight
  • Payroll project support 

RSM contributors

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