As a small business owner, you may not have enough revenue to justify hiring a full-fledged human resources department. But this doesn’t mean you can overlook the importance of HR-related tasks. Luckily, there are many companies out there whose mission is to help young businesses like yours tackle the complicated world of HR (without costing you a fortune).

There are many benefits of working with an HR service. Here are a few of our favorites:

  • You save major time by handing these tasks over to an outside service
  • You save a ton money as you don’t have to hire as many (if any) dedicated HR professionals
  • You can have peace of mind in knowing that you are in the hands of an experienced team
  • You’ve got somebody to answer all those insanely difficult HR questions
  • It’s easy to scale your business without any HR-related concerns

Hopefully you’re excited about these potential benefits. But, where do you start? Which “HR-in-a-Box” service is best for your small business?

You don’t want to hire just any company to act as your human resources department. They will be responsible for many details, from paying employees and contractors to dealing with benefits, so you need to make an informed and confident decision.

To get started, let’s explore the three of the top service providers in this space.

Zenefits

TechCrunch describes Zenefits as “…a cloud-based human resources platform that allows businesses to manage multiple human resources services from a single cloud-based dashboard. It’s designed to streamline the process of adding new employees and getting them set up with payroll and benefits, as well as potentially removing them from a company.”

Before we discuss the features of this service, there is something you need to know: it is free. And by free, we mean absolutely free.

Zenefits does not charge small businesses any money for using the service. Instead, the company gets paid by benefits providers, such as your health insurance carrier. Furthermore, and just as exciting, is the fact that Zenefits does not require a signed contract or agreement. You can rely on the service for as long as you want, and have the ability to cancel your account within a matter of seconds.

Now that your excitement has grown, let’s take a look at some of the many features that have moved Zenefits to the top of the industry:

  1. Provides a variety of HR services, such as: payroll and taxes, all types of insurance, employment benefits, and compliance.
  2. Availability of many types of HR technology: a cloud-based administrative dashboard, reports and analytics, employee onboarding, benefits administration, time and attendance, paid time off, and stock options tracking.

The one thing to keep in mind is that Zenefits still requires you to choose your own payroll provider, and isn’t a completely outsourced service. Instead, it gives you everything you need to make HR management a breeze.

Justworks

Justworks is a bit different then Zenefits in that it is a PEO (Professional Employer Organization). Their pricing is $75 per person, plus optional medical, dental, and vision.

Although pricier than using Zenefits combined with a payroll provider such as ZenPayroll, if you plan on handing a lot of HR tasks off to Justworks, the price can definitely be worth it. Here’s a few things we love about Justworks:

  1. Guaranteed compliance with federal, state and local filing requirements.
  2. Potential savings on medical. As Justworks groups several small companies together and negotiates rates directly with the insurance companies, it can leads to major savings on medical. Here’s how one company saved $60,000 a year on medical by switching to Justworks.

The only potential downfall of Justworks is the price. As long as your company can afford it, and wants to outsource a lot of the HR, there are reasons to consider Justworks over the rest.

Algentis

Algentis, a third-party administrator, understands the employee administration issues that face many small and medium-sized businesses. Through its high powered platform, the company provides clients with the tools and features they need to perform HR related tasks in a more efficient and effective manner.

The company provides assistance in four key areas:

  • Payroll
  • Benefits
  • Insurance
  • HR expertise

This covers just about every HR task, but doesn’t answer one very important question: what sets Algentis apart from something like a Justworks? With Algentis you still have control of your employees — it’s your benefit plan, your payroll, etc. With something like Justworks, they own the plans, the payroll, etc. For some people, Algentis might be a better fit, as it is easier to move providers (for benefits and payroll), and it is built to scale, so it’s great for companies that have major hiring plans for the future.

While Algentis makes it easy to learn more and get started, it does not openly publicize its pricing structure. This can make it difficult for some to move forward, especially when there are free providers, such as Zenefits, that have just as much to offer.

Every company, regardless of size and industry, has HR responsibilities. If you don’t have the time, money, or in-house employees to handle these tasks, it is time to think outside the box. And by outside the box, we mean finding an “HR-in-a-Box” service that suits your every need.


Meredith Wood is the Editor-in-Chief at Fundera, an online marketplace for small business loans that matches business owners with the best funding providers for their business. Prior to Fundera, Meredith was the CCO at Funding Gates. Meredith is a resident Finance Advisor on American Express OPEN Forum and an avid business writer. Her advice consistently appears on such sites as Yahoo!, Fox Business, Amex OPEN, AllBusiness, and many more.