2026 UK Employment Law Changes

HR Outsourcing 3 min read

How much does outsourced HR cost for small businesses?

Reviewed by Rebecca Hughes, Senior HR Consultant, CIPD Level 7 Last updated: 21 September 2026
Expert Answer

Outsourced HR for a UK small business typically costs from around £200 a month for basic support to about £800 a month for a comprehensive package. Pay-as-you-go HR help runs at roughly £60–£80 an hour, and contract HR consultants charge a median of about £555 a day. What you pay depends mainly on your headcount and how much of your HR you hand over.

What is the average cost of an HR consultant?

Current UK market rates for HR consultants:

  • Contract HR consultants: a median of £555 a day, with most day rates between £467 and £603 (IT Jobs Watch, vacancies in the six months to September 2026)
  • Retained HR consultancy: around £60 an hour (about £480 a day)
  • Pay-as-you-go HR support: around £80 an hour (about £640 a day)
  • Specialist disciplinary and grievance work: between £150 and £300 an hour

How much does outsourced HR cost per month?

Most small businesses pay a monthly retainer. Budget options start at around £200 a month, and comprehensive packages cost up to about £800. As a worked example, a 10-person business might pay around £200 a month for a basic package of two hours' support, or closer to £2,000 a month for 20 hours. Some providers charge per employee instead: payroll and benefits administration alone typically costs £4 to £25 per employee per month.

HR outsourcing costs vs hiring in-house

An in-house HR manager means a full salary plus employer National Insurance, pension contributions, training and software, whether or not you have an HR issue that month. For most businesses with fewer than 50 staff, outsourced support costs a fraction of that. The bigger cost is getting it wrong: an unfair dismissal compensatory award can reach £123,543 or a year's gross pay, whichever is lower (see our 2026 employment law guide).

What affects the price?

  • Number of employees
  • Scope of services (advice only, or fully managed HR)
  • Industry and complexity (higher-risk sectors may cost more)
  • Whether employment law and tribunal insurance is included
  • Additional services, such as payroll, health and safety or recruitment

Where can I get free HR advice?

Acas runs a free, impartial helpline for employers and employees on 0300 123 1100 (see acas.org.uk for current opening hours). It is good for the general rules but can't advise on your specific situation or draft your documents. Infinity HR offers a free first consultation with a CIPD-qualified consultant.

What does Infinity HR cost?

We charge a fixed monthly fee based on your headcount, with no lock-in contract. See our plans on the pricing page or get a free, no-obligation quote. For ongoing day-to-day help, see our HR support for small businesses; to hand over HR entirely, see our outsourced HR services.

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