Human resources solutions pricing

It's difficult to pinpoint specific costs for human resources solutions since the offerings are so varied. However, the pricing model is pretty consistent -- in general, you pay either a fixed dollar amount per employee per month or a percentage of their individual monthly salaries.

HRO providers who work on a fixed fee model will charge $20-$200 per employee per month. The exact pricing varies on the human resources solutions you require and the size of your organization. You may receive a volume discount on the per employee rate as the number of employees increases. Billing typically occurs on a monthly or quarterly basis.

If your HRO provider charges a percentage of individual employee salary, expect to pay about 2%-10% of each employee's annual salary. Keep in mind that an HRO provider who charges by the percentage stands to make extra - but unearned - money when an employee gets a raise. If the pricing structure is based on percentage, make sure that the agreed-upon amount is based on the employee's salary at the time you hired the HRO provider.

Some HRO providers offer specific services on an a la carte basis. You can expect to pay a few thousand dollars for developing and placing recruitment advertisements. An audit of your current HR policies and manuals can cost $200-$500. Background checks, drug screenings, and psychological evaluations for potential employees will run $25-$50 per person.

HRO contracts
The typical length of an HRO contract is one year so there is enough time for integration to occur. However, most contracts have a 60-day "out clause". If you don't like the work an HRO provider is doing during the first 60 days, you can cancel the contract without penalty. The HRO provider has that same right, but typically exercises it only in severe situations - if you engage in illegal activity, for example, and refuse their advice against it, they are free to walk away from your agreement.