Yes, outsourcing HR services is generally cheaper than hiring a full-time HR manager, especially when it comes to HR for startups.
Let’s say you hired a junior HR manager in your HR team with a gross monthly salary of £4,000. That is much more compared to what you would spend for some of these outsourced HR solutions:
Charlie’s HR software would only cost you £4/user/month — so, for a 30-people team, that would be £120/month. If you also wanted unlimited access to a dedicated HR advisor, that would cost you £299, for a total monthly cost of £419. That’s £3,621 saved compared to hiring a junior HR person.
If you went for Zenefits (maybe you have a large part of your business based in the US), you’d spend $16/user/month for the most popular package — for 30 employees that is $480 per month. If you wanted to add the advisory service on top, you’d pay a total of $488 per month.
According to our research, if you chose an HR consulting service for startups like LighterHR on a retainer basis, you’d spend around £3,000 per month. This of course depends on what you need, but you’d still be below what you’d pay for someone working in-house full time.
In a similar way, solicitor costs depend on how many hours you need them to work for you. We used to use employment lawyers quite a lot in our first years after founding Charlie, and we used to spend around the same as hiring a full-time HR person.