Evaluating the Success of Outsourced Human Resource Services: Key Metrics to Track

Outsourcing human resource services has become a common practice for businesses looking to streamline their operations and reduce costs. By entrusting HR tasks to external service providers, companies can focus on their core competencies and leave the administrative burden to experts. However, with the rise of outsourcing, it has become crucial for businesses to evaluate the success of their outsourced HR services. After all, the goal of outsourcing is to improve efficiency and effectiveness, and it is essential to track key metrics to ensure that this goal is being met.

The Importance of Tracking Metrics

Tracking metrics is essential for any business process, and outsourcing HR services is no exception. It allows businesses to measure the performance of their outsourced services and identify areas for improvement.

By tracking metrics, companies can also ensure that they are getting value for their money and that the outsourced services are meeting their expectations. Moreover, tracking metrics can help businesses make data-driven decisions when it comes to outsourcing. It provides valuable insights into the effectiveness of the outsourced services and helps businesses determine whether they should continue with the current service provider or look for alternatives.

Key Metrics to Track

When it comes to evaluating the success of outsourced HR services, there are several key metrics that businesses should track. These metrics can vary depending on the specific services being outsourced, but some common ones include:

Cost Savings

One of the main reasons why businesses outsource HR services is to reduce costs. Therefore, it is crucial to track cost savings as a metric when evaluating the success of outsourced services.

This can be measured by comparing the cost of in-house HR operations to the cost of outsourcing. If the outsourced services are resulting in significant cost savings, it is a clear indication of success.

Turnaround Time

Another important metric to track is the turnaround time for HR tasks. Outsourcing should result in faster and more efficient completion of tasks, freeing up time for businesses to focus on other areas. By tracking the time it takes for outsourced tasks to be completed, businesses can determine whether the service provider is meeting their expectations.

Quality of Service

The quality of service provided by the outsourced HR services is also a crucial metric to track.

This can be measured through customer satisfaction surveys or by monitoring the number of errors or complaints received. If the quality of service is not up to par, it may be time to consider switching to a different service provider.

Employee Satisfaction

Outsourcing HR services can also have an impact on employee satisfaction. By tracking metrics such as employee turnover rates and engagement levels, businesses can determine whether the outsourced services are contributing to a positive work environment. If there is a decline in employee satisfaction, it may be a sign that the outsourced services are not meeting their needs.


Compliance with laws and regulations is crucial for any business, and this includes HR operations.

By outsourcing HR services, businesses are entrusting their compliance responsibilities to external service providers. Therefore, it is essential to track compliance metrics to ensure that the service provider is meeting all legal requirements.

Other Considerations

In addition to these key metrics, there are other factors that businesses should consider when evaluating the success of outsourced HR services. These include:


Effective communication is crucial for the success of any outsourcing relationship. Businesses should track communication metrics, such as response time and frequency of communication, to ensure that there is open and transparent communication with the service provider.


Outsourcing HR services should provide businesses with the flexibility to scale up or down as needed.

Therefore, it is essential to track metrics related to the service provider's ability to adapt to changing business needs.


Outsourcing HR services can also bring new ideas and innovative solutions to a business. By tracking innovation metrics, businesses can determine whether the service provider is bringing value through new and improved processes.

In Conclusion

Evaluating the success of outsourced HR services is crucial for businesses looking to optimize their operations and reduce costs. By tracking key metrics such as cost savings, turnaround time, quality of service, employee satisfaction, and compliance, businesses can ensure that they are getting the most out of their outsourced services. It is also essential to consider other factors such as communication, flexibility, and innovation when evaluating the overall success of outsourcing HR services.