What makes outsourced HR support more expensive?

The biggest factor is usually the amount and complexity of support you need.

A business with five employees which needs occasional advice is very different from an organisation employing 80 people with several line managers, regular recruitment, sickness absence, performance issues and employee relations work.

How much support do you actually need?

As an organisation grows, the volume of HR activity usually grows with it. There may be more contracts, changes to terms, sickness absence, flexible working requests, performance conversations, grievances, disciplinaries, family leave and recruitment.

More activity normally means more adviser time, which increases the cost.

How complicated is the work?

Not every hour of HR work is the same.

Issuing a routine letter is very different from advising a business through a complex grievance, restructuring exercise, TUPE transfer or senior employee dispute.

More complicated matters may require a more experienced HR professional. You are paying for their time, but you are also paying for their judgement and their ability to understand the legal, commercial and people implications of the options available to you.

Do you need senior HR expertise?

Some HR providers use relatively junior advisers for most client work, supported by standard scripts, templates and processes. Others provide direct access to experienced HR professionals.

Both models can work.

If you have a straightforward query, you may not need senior HR expertise. If the situation is commercially significant, sensitive or complicated, experience is likely to matter more.

Do you want somebody who knows your business?

There can be a price difference between having access to a general HR advice service and having a named HR adviser who gets to know your organisation, managers, employees, documents and previous issues.

Continuity may cost more, but it can also save time because you do not need to explain the history every time you call.

Do you need HR software?

Some providers include HR software within their monthly fee and others charge separately.

Depending on what you need, an HR system may manage employee records, holiday, sickness, documents, training, health and safety, recruitment, expenses, rotas and time tracking.

More functionality generally increases the overall cost.

What can make outsourced HR support cheaper?

Spending less on HR is not automatically a bad decision. The important thing is understanding what you are giving up in return for the lower price.

Buy less support

If you employ a small number of people and HR issues are rare, a light-touch package or occasional ad hoc support may be enough.

There is little point paying for ten hours of HR advice every month if you consistently use one.

Keep routine administration internally

You may choose to manage holiday records, sickness records, routine letters and HR system updates yourself, while using an external HR adviser for more complex matters.

This can work very well if somebody internally has the time, confidence and organisation to manage it properly.

Use standard rather than bespoke documents

A standard contract or handbook will usually cost less than something written specifically around your organisation.

For a small employer with straightforward arrangements, a good quality standard document may be perfectly adequate.

Buy HR only when you need it

Ad hoc HR can be cheaper if you rarely need support.

The trade-off is that the hourly rate is normally higher and the adviser may not know your business as well as someone working with you regularly.

Why are some HR companies so expensive?

Higher prices are not automatically excessive.

A premium HR provider may employ very experienced consultants, provide specialist expertise, offer face-to-face support, deliver complex projects, provide strategic HR input or maintain a large team so that support is always available.

Larger organisations may also carry greater overheads in areas such as technology, offices, insurance, professional development and management.

The sensible question is not whether those things are good or bad. It is whether you need them.

A ten-person business with straightforward HR needs is unlikely to require the same infrastructure as a business employing several hundred people.

Why are some HR providers so cheap?

Cheap HR is not necessarily poor HR.

A highly experienced freelance HR consultant with low overheads, for example, may provide excellent support at a competitive price.

However, if one price is significantly lower than the others you are considering, it is worth understanding why.

Lower prices may reflect:

• telephone-only support
• less experienced advisers
• limited adviser access
• standardised documentation
• less continuity between calls
• limited face-to-face support
• project work being charged separately
• fewer services being included

You should look particularly carefully at what happens when the HR problem becomes difficult.

Answering a straightforward holiday entitlement question is very different from helping an employer manage a grievance, prolonged absence, poor performance or a possible dismissal.

What are the cheaper alternatives to outsourced HR?

There are several ways to manage HR for less money, and some of them may be absolutely right for your business.

Doing HR yourself

If you employ very few people and your arrangements are straightforward, you may be comfortable managing a lot of HR yourself.

GOV.UK and Acas provide useful information and guidance. The cost is mainly your own time.

The difficulty usually comes when general guidance needs to be applied to a particular employee and set of circumstances.

Using AI and HR templates

AI can be useful for research, first drafts, letters and policies. We use technology within our own business too.

The limitation is context. An AI tool does not automatically know the history of the employee, your previous decisions, your contracts, your management team or the commercial consequences of a particular route.

It can help you produce information. You still need to decide whether that information is appropriate for your particular circumstances.

Using a freelance HR consultant

A good freelance consultant can be an excellent option.

They may have lower overheads and provide very personal support. The potential issue is capacity. If that person is on holiday, unwell or heavily committed elsewhere, there may not be another adviser available.

For some employers that is not a problem. Others prefer the reassurance of having a wider team available.

Using a telephone HR helpline

A telephone advice service can provide cost-effective access to HR guidance and may suit employers who are confident implementing the advice themselves.

The compromise can be continuity. You may speak to different advisers and need to explain the background each time.

Using an insurance-backed HR provider

Some HR businesses combine employment advice with tribunal or legal expenses insurance.

That reassurance is attractive to some employers. You should understand any conditions attached to the cover, including whether you are required to follow particular advice in order to retain the insurance protection.

DOHR operates differently. We explain your options, the likely risks and our recommendation. The final business decision remains yours.

Employing your own HR person

At a certain size, bringing HR in-house may make more commercial sense.

You gain someone who is immersed in the business every day, although the true cost includes salary, employer National Insurance, pension, holiday, benefits, recruitment and management.

You also need to decide what level of HR professional you require. A junior administrator may still need senior external support when something complex happens.

Where does DOHR sit on price?

DOHR is not trying to be the cheapest HR provider in the market.

We sit between low-cost helpline or template-led services and the larger corporate HR consultancies.

Our pricing reflects access to qualified HR professionals, a named adviser, the support of a wider team, practical commercial advice and HR systems where included within your membership.

Our monthly HR Club packages currently start at £99 per month and go up to £8,750 per month for organisations effectively outsourcing a substantial HR function.

That is a very wide range because the businesses using those packages have very different requirements.

We also do not believe every employer needs a large monthly HR package. If you do not need that level of support, we will tell you.

Can I reduce the cost by paying annually?

Yes. We currently offer a 7.5% discount where an annual subscription is paid on a single invoice.

Paying monthly may still be the better option where maintaining cash flow flexibility is more important to your business.

Can I bank unused HR hours?

Yes.

HR problems rarely arrive in neat monthly amounts. You may have a quiet month followed by a month where several things happen at once.

Unused package time can be banked and rolled forward for up to six months. You can also borrow time against up to three months of future membership.

If you are in deficit at the end of a rolling three-month period, the shortfall is charged at £150 per hour.

This gives you some flexibility without needing to change your package every time the level of HR activity changes.

What does a full HR Audit cost?

HR Audit prices vary because the scope of an audit can vary significantly.

A straightforward document review will cost less than an audit which looks at what is actually happening across the organisation.

A full audit at this level might include:

• review of HR records and data
• review of contracts, policies and processes
• manager and employee focus groups
• executive interviews
• review of what happens in practice as well as what the documents say
• identification of gaps and areas requiring attention
• detailed reporting
• prioritised recommendations

A smaller organisation or narrower audit would normally cost less. A larger organisation, multiple sites or a more complicated scope may increase the price.

We scope an HR Audit before agreeing the fee so that you understand what is being reviewed and what you will receive at the end.

What might HR support cost for a real business?

Pricing is easier to understand when you can see what it might look like in practice.

How is outsourced HR usually packaged?

There is no single pricing model across the HR industry.

Approach	How it usually works	Who it may suit
DIY / templates	Very low direct cost, with the employer doing most of the work.	Very small employers with simple needs and the time to manage HR themselves.
Telephone advice	Access to HR guidance, often through a shared advice team.	Employers who mainly need answers and are confident implementing the advice.
Freelance HR consultant	Personal support from one HR professional, often with relatively low overheads.	Businesses which value continuity and are comfortable relying on one individual.
Outsourced HR practice	A named adviser backed by a wider team, with ongoing support and project capability.	Businesses wanting continuity without employing a full internal HR team.
Large HR consultancy	Access to wider specialist teams, infrastructure and potentially national or international capability.	Larger or more complex organisations with substantial HR requirements.
In-house HR	An employee or team dedicated to the organisation.	Businesses with enough ongoing HR work to justify employing HR internally.

What is the difference between the upfront cost and the real cost of HR?

The cheapest HR option today may not be the cheapest way of managing your people over several years.

For example, repeatedly buying ad hoc advice can become expensive if HR issues happen regularly.

There is also a cost when business owners and managers spend several hours researching an HR issue themselves.

No invoice arrives for that time, but it still has a commercial value.

Poor HR administration can also create additional work through inconsistent processes, poor records, repeated queries and managers avoiding issues until they become much more difficult to resolve.

When you compare HR providers, ideally you should therefore ask:

That is often a more useful question than simply comparing two monthly fees.

How have HR costs changed?

The HR market has changed significantly.

Technology has made some administration cheaper and easier, and employers can now access HR systems, templates, AI tools and online guidance which would once have required considerably more professional input.

At the same time, expectations of employers and managers have increased. Businesses are dealing with flexible working, family leave, hybrid working, equality, harassment prevention, wellbeing, data protection and increasingly complicated employee relations issues.

HR providers also face increases in salaries, professional development, insurance, technology and general operating costs.

The result is a very broad market, from low-cost software and template services through to fully outsourced HR departments.

Is outsourced HR worth the money?

Sometimes it is. Sometimes it is not.

If you employ two people, have few HR issues and are comfortable managing employment matters yourself, a substantial monthly HR contract may not be sensible.

If you have 20, 40 or 80 employees, several managers and regular people issues, the calculation begins to change.

The value may come from:

• getting answers more quickly
• reducing management time spent researching HR
• having better HR records and documents
• making more consistent decisions
• giving managers somewhere to go for advice
• dealing with problems earlier
• having someone independent to challenge your thinking
• accessing experienced HR support when something complicated happens

An external adviser can also bring perspective when an owner or manager has become very close to a difficult employee situation.

At DOHR, our job is not to make the business decision for you.

We explain the options, the relevant legal context, the commercial implications and the risks. We give you our recommendation and the reasons for it. You then decide what is right for your business.

What should I compare when looking at HR prices?

Try not to compare the headline monthly fee in isolation.

Ask potential HR providers:

• Who will actually give me HR advice?
• Will I have a named adviser?
• What experience does that adviser have?
• What happens when my normal adviser is unavailable?
• Is HR software included?
• What happens if I need more support than expected?
• What work is charged separately?
• Can someone attend employee meetings with me?
• Is travel charged?
• Are contracts and policies included?
• Can I access senior HR expertise when necessary?
• How long am I tied into the agreement?
• Does any insurance policy affect the advice I receive?

Two providers charging the same monthly fee may be providing very different services.

Common questions about DOHR pricing

So how much should I budget for outsourced HR?

For a UK employer, outsourced HR can range from a relatively small monthly amount for basic support through to several thousand pounds a month where the provider is effectively acting as an outsourced HR department.

At DOHR, HR Club membership currently starts at £99 per month.

Ad hoc Team support is £175 per hour, while Executive support is £250 per hour.

Larger projects are scoped separately. A comprehensive HR Audit for an organisation with around 80 UK employees might cost approximately £8,500 plus VAT.

The right amount to spend depends on the support your business actually needs.

The best HR service is therefore not automatically the cheapest one, and it is not automatically the most expensive one either.

It is the one which gives you the right level of expertise, availability and support for the business you actually have.