What Is HR Outsourcing?

Outsourcing HR functions is the practice of hiring an external, third-party provider to handle some or all of its human resource functions, such as payroll, benefits administration, recruitment, and compliance. 

This enables companies to concentrate on their core business activities by leveraging specialized expertise and enhancing efficiency, while also reducing the costs associated with maintaining an in-house HR department.  

What is an Employer of Record (EOR)?

An Employer of Record manages the legal, HR, tax, and local compliance responsibilities of your employees in any country where you don't have a legal entity. By acting as the legal employer, the EOR service providers assume the legal risks of an employer on your behalf, while you maintain control over your employees and business operations. 

Learn more about what is an Employer of Record.

Advantages of Outsourcing HR Functions to an EOR

Outsourcing HR functions to a third party seems counterintuitive at first, but once you peel back the layers, it makes perfect sense. For starters, managing a global workforce on your own means you'll have to deal with the red tape of global compliance, and it can take a serious toll on your business's bottom line if done incorrectly.  

Here are the unique benefits of outsourcing HR functions with EOR service providers vs. managing your global workforce internally:

Stay Compliant with Employment Laws

65% of international businesses cite regulatory and compliance risk as a major driver for switching from traditional subsidiary models. Alternative models, such as an EOR, act as the legal employer, helping you meet in-country compliance requirements without creating a local entity.

Key compliance benefits of outsourcing HR functions:

• Reduce risk of non-compliance: Global EOR services provide the legal structure from day one, shielding your business from costly legal issues.

• Stay current with local laws: Atlas HXM tracks changes in labor regulations across 160+ countries—covering hiring, contracts, payroll, taxes, and benefits—so you remain compliant.

• Simplify HR administration: The EOR like Atlas HXM, manages contracts, worker classification, and payroll taxes, reducing the risk of errors in new markets.

Try our Global Compliance Risk Calculator to see what compliance risks could be impacting your business.

Realize Cost Savings

According to the 2025 Global Atlas Report, 80% of companies with international workforces rely on owned entities or subsidiaries to manage overseas teams. Of those, 63% say the cost of operating entities motivates them to consider alternative models like an EOR. 

Here's how global EOR services help cut these expenses and save money:

• Lower HR administration costs: No need for in-house HR in each country; EOR economies of scale keep per-employee costs down.

• Avoid infrastructure investments: Atlas HXM manages benefits, onboarding, and taxes—eliminating the need for extra systems or staff.

• Streamline payroll: As a direct EOR, Atlas HXM handles payroll across currencies and countries, reducing overhead compared to internal payroll systems.

Try our Global Salary Calculator to see how salaries compare across markets.

Tap into Specialized HR Expertise

Atlas HXM's EOR model provides localized knowledge in over 160 countries to help you adapt to new markets.

Expertise businesses gain from partnering with Atlas HXM include:

• Local law guidance: Access country-specific advice on contracts, payroll, leave, and terminations.

• HR best practices: Get support with benefits, compensation structures, and performance management aligned with local norms.

• Culture-aware strategies: Atlas HXM offers learning and development training tools to build a positive workplace culture globally.

Global Hiring and Expansion

Hiring overseas becomes simple and compliant with an EOR partner like Atlas HXM.

Expansion advantages include:

• Fast global hiring: Bring on talent quickly without setting up entities.

• Flexible market entry: Test new countries without long-term commitments.

• Compliant employment: Atlas HXM manages contracts, payroll, and benefits according to local law.

Outsource HR Functions to Focus on Your Core Business

Atlas HXM frees your team from time-consuming HR work so you can grow strategically.

Key operational benefits are:

• More time for strategy: We manage the full employee lifecycle—hiring, payroll, and HR support—so you focus on business goals.

• Ongoing global support: Access expert advice on compliance and employee relations worldwide.

• Competitive edge for smaller firms: Atlas HXM helps deliver strong benefits and remote-work support, improving retention against larger competitors.

Request a demo today!

Challenges in Outsourcing HR Functions

When to Outsource HR Functions

Outsourcing HR functions isn't just for large enterprises. For many businesses, it's the difference between stalled growth and scalable expansion.

You should consider outsourced HR if:

• You’re expanding into new countries and don’t want to set up legal entities.

• HR admin (payroll, contracts, compliance) is taking time away from your core business strategy.

• You’re facing compliance risks due to unfamiliar local labor laws.

• Your internal HR team is stretched too thin or lacks global expertise.

• You want to offer competitive benefits packages without building local HR infrastructure.

• You need to hire quickly in multiple countries to support growth.

Atlas HXM's EOR service provides the compliance, HR expertise, and payroll infrastructure you need to grow globally, without slowing down your business.

Disadvantages of Not Outsourcing HR Functions

Managing global HR in-house may seem cost-effective, but it often leads to risk, inefficiency, and unnecessary expense.

Key disadvantages:

• Higher risk of non-compliance: Without local expertise, mistakes in contracts, payroll, terminations, or tax obligations can result in legal issues, heavy fines, and reputational harm.

• Rising HR costs: Building a complete HR infrastructure or setting up a legal entity in every country you operate in can cost thousands of dollars.

• Lack of local expertise: Understanding every country’s unique laws and HR practices is complex, but without it, you risk missteps that delay growth.

Atlas HXM EOR Pricing

When considering outsourcing HR functions to an EOR, cost transparency matters. Many providers advertise a flat fee but add charges for payroll, benefits, or compliance.

Atlas HXM's EOR model keeps pricing simple and clear:

• $599 per employee/month: Straightforward pricing with no hidden fees.

• Volume discounts: Available for larger teams.

• All-inclusive coverage: Payroll, compliance, tax filings, and benefits administration in 160+ countries.

• Cost savings: Save up to 82%+ compared to setting up entities independently 

Explore Atlas HXM's EOR Pricing today!

Make It Easier to Hire and Manage Internationally

Choosing to manage all HR functions internally when expanding globally can present significant risks and costs. Between non-compliance with local laws, higher operational expenses, and limited access to localized HR expertise, trying to tackle global expansion on your own can present some serious challenges. 

By leveraging outsourced HR through an Employer of Record, companies gain essential legal protection, cost efficiencies, HR knowledge, and operational ease, all of which make global expansion more accessible and manageable for your business. 

Ready to pursue global expansion? Contact Atlas HXM to see how we help growing companies manage their global workforce by outsourcing HR functions.