What Is an HR Outsourcing Proposal?

An HR outsourcing proposal or a manpower outsourcing proposal is a business document that is the first step in the outsourcing process. The HR outsourcing proposal is typically written by a vendor or service provider that is offering its services to various companies and organizations. The outsourcing proposal follows a business proposal format. The document usually contains a list of services that an agency or vendor is looking to provide an organization. It also details the different packages and services that a client can outsource from the outsourcing agency. In such cases, it focuses more on the recruitment side of things or the company that needs to outsource resources for their compensation and benefits. In other cases, a company can choose to outsource an entire human resources team. If a company only wants to outsource a recruitment team for their company, they are only required to have a placement proposal.

According to the statistical data provided by Statista about the global market size of outsourced services from 2000 to 2019, the global outsourcing market went up to over 92.5 billion US dollars in 2019 from 85.6 billion US dollars in 2018. The largest share of global outsourcing in the market comes from the United States, followed by Europe, the Middle East, and Africa.

Human Resources Functions that Companies can Outsource

Since human resources provide different functions in the organization, HR personnel serve a variety of functions and duties, which is why the entirety of the department can become overwhelming for smaller teams. Fortunately for many organizations, it is acceptable and possible to outsource individuals to fulfill and complete HR needs whenever appropriate. The section below details the most common human resources functions that companies can outsource. It also contains additional information about these roles and responsibilities within an organization.

Hiring services: Selection, recruitment, and matching skills is a process in human resources in which potential employees undergo interviews to get into the organization. Businesses and organizations acquire their supply of human resources and knowledge from three primary sources, including households, the academe, and other enterprises. These individuals are looking to work in different types of markets and search for possible vacancies from various sources of media. Potential employees differ in quantity, quality, and eagerness to continue employment relations with the company in the coming years. With a large variety of people coming into companies, it becomes difficult to filter and acquire the right individuals for specific tasks and responsibilities. As such, there are specialized recruiting agencies that have a special database of possible candidates that organizations can use to fill their vacancies in a shorter period. It has become of the reasons why recruitment and hiring services are one of the many services that companies outsource. Similar to other outsourced functions, recruiting through outsourcing provides access to high-caliber services by experts with lower costs than in-house processes. Professional Employer Organizations PEOs can also reduce and flatten employer-related expenses into a single cost. Recruitment involves background checks, application and interview procedures, and onboarding services.Developmental services: Companies take the time to outsource explicit market knowledge. To gain a competitive advantage against their competitors from external sources, an organization must use a human learning system to convert explicit knowledge into internal and tacit knowledge. In selecting employees using the system, the organization must take into account the company requirements and the ability and aspirations of candidates. Before sending employees into an external developmental or training program, analyze and create employee profiles. Through proper profiling methods and sending specific candidates, companies can increase the scope of knowledge for internal affairs, and that acquired knowledge does not diffuse easily.Performance management: The organizational performance evaluation ranges in all levels of the organization. Organizational and departmental analyses are knowledge-based measurements ranging from personal experiences in the workplace. Companies can outsource these evaluations to keep the results subjective and qualitative for in-house assessments. Individual employee evaluations require processes that utilize assessment tools and techniques that require continuous improvement and explicit knowledge. The benefit of external sourcing for measurement is that a company acquires designs of successful companies within the industry. Remember that despite having similar measurement formats, results vary depending on how the organization implements the performance evaluation. Compensation and Benefits: Compensation and benefits are essential in human resources services that guarantee the acquisition of skilled employees by having adequate remunerations according to the qualification and experience of individuals. The primary purpose of a well-structured compensation or budget plan is to attract and retain qualified employees through previous and present market trends in industries. As such, an external expert in the field designs a better system than internal experts. It also exercises consistency and fairness in compensation, with salary increases based on educational attainment, work experience, and performance appraisals. After finalizing compensation formulas, organizations can utilize programs or software to aid with computation through spreadsheets to make things easier and more efficient.Reward and incentive management: Many organizations use reward and incentive programs to encourage employees to work better. It attracts the most qualified employees and motivates them to increase productivity while maintaining organizational capabilities. Organizations can outsource reward and incentive systems for lower levels of the organization but not for managerial or executive positions. The advantage of having an outsourced rewarding system is that the hired agency provides a sufficient amount of expert knowledge and a reward system that is beneficial to the industry. The key to maintaining the competitive advantage of the reward and incentive system centers on trust and faith in the internal culture of teams and the organization itself. Specialized consultancy services: Consultancy has become one of the fastest-growing industries in many countries. A reason behind the growth is the glaring mismatch between the required number of employees and the available employees in quantity and quality within different departments. Only a few organizations can change the internal policies or the departmental requirements for hiring employees at a similar pace to other organizations. Human resources are more than just transactional services. The department also has the responsibility to serve the strategic goals of employees in the organization. Many HR consultants also create service plans while offering strategic systems and suggestions around policies and procedures, employee development, and onboarding support. Outsourcing agencies and vendors also provide a variety of tools and services to administer HR functions, including service portals for the organization. Payroll: Handling payroll is intensive and time-consuming, requiring extensive knowledge of different regulations. Outsourcing payroll is valuable to employers as they handle the various aspects of payroll, including payroll administration, direct deposits, and paycheck distributions. It also covers reporting and documentation of vital documents like W-2 and EEO-1. People who process payrolls also have the responsibility to track times off like medical, family, or vacation leaves, attendance sheets, and unemployment claims.Compliance: Compliance requirements are essential in every organization. Having these compliance requirements bring the burden of responsibility and accountability on the owner. Seeking the aid of a compliance partner that helps manage wages, workplace disputes, harassment issues, worker compensations, employment law provisions, company policies, and other safety programs.

How To Write an HR Outsourcing Proposal

Outsourcing provides businesses with the opportunity to be more efficient and save on expenses for particular situations. It is why many companies opt to outsource specific tasks and responsibilities to independent contractors. Before a company can outsource from agencies, the business owner or department manager writes an HR outsourcing proposal detailing the scope of work and why the business needs the individual. The section below details the steps in writing a comprehensive HR outsourcing proposal.

  • 1. Define the Needs of the Business

    The proposal must contain information about the project, detailing the scope of work for outsourced resources. Define the business needs, detailing the type of work that the individual must accomplish. It is advisable to be as specific and accurate as possible to ensure there is an accurate skill matching process for the company. Remember that there are partners that only utilize specific services, techniques, or tools and that they may not be suitable to fulfill the needs of the business. Being able to define the needs in detail allows the outsourcing agency to pair an individual that can fulfill, meet, and accomplish tasks, activities, and projects.

  • 2. Detail the Amount of Workload

    After selecting the best possible partner to address the needs of the company, the next step is to provide an outline of the workload for them to support the business. The workload includes the work schedule, detailing the number of work hours per day, the number of workers to complete daily tasks, and other valuable information that can aid the contractor to fulfill business needs and objectives.

  • 3. Put Some Thought on Fluctuating Needs

    There are outsourced projects that go on for a short period, but there are also those that extend years. As such, the person responsible for writing the proposal must consider the fluctuating needs that the teams need depending on the seasons, holidays, and others. Anticipating these fluctuations regarding needs can prepare the company for certain adjustments in the future, especially when writing the proposal. It is practical to define these needs to give a guarantee that these contractors can still meet deadlines despite fluctuations in various conditions.

  • 4. Set a Clear Project Timeline and Budget

    The outsourcing proposal must establish the possible costs and duration until the completion of the project. When it comes to service-oriented organizations, expectations can range from a client receiving customer support privileges for a duration. There must also be a clear definition of the project costs and project timeline, including additional fees or expenses that the contractor incurs towards the completion of the project.

  • 5. Define Customer Service Expectations

    Outsourced work puts contractors in direct communication with clients and customers of the business. As such these contractors must still uphold the organizational culture and implement the same level of quality and speed of service. The outsourced employees must demonstrate a similar level of customer service when working under the company. Ensure that they uphold what the business is about and emphasize that their behavior directly reflects the organization.

  • 6. Establish Possible Solving Measures

    Problems can still arise in the light of outsourcing individuals. As such, possible solutions to these problems must be present in the proposal. It is necessary to incorporate these plausible resolutions for the contractors to know what they can do to address the issues.


Is outsourcing a good idea for the HR department?

There are advantages to outsourcing resources for the company. For one, it allows an organization to focus on creating strategies, improve accuracy and compliance with industry requirements, and leverage technologies to facilitate costs and tasks.

How do you write a recruitment proposal?

When writing a recruitment proposal, focus on indicating essential components like organization background and history, general requirements for the vacancy, scope of work, possible terms and conditions, and selection criteria.

How does a company approach an outsourcing agency?

There are different ways for an organization to approach an outsourcing agency to acquire employees to achieve their needs and goals. It is necessary to analyze, eliminate, optimize, automate, and outsource.

Many companies see outsourcing as a business asset as it brings many advantages to outsourcing qualified candidates for very specific tasks and projects that a company needs to address or accomplish. As such, companies must write a comprehensive outsourcing proposal and deliver them to various outsourcing agencies that can offer the most competent individuals with a specific amount of skills and expertise. Familiarize yourself with an HR outsourcing proposal by browsing and downloading the 11+ SAMPLE HR Outsourcing Proposal in PDF. Get yours today only at Sample.net.