A service segment of the Process Outsourcing Industry, HRO is an outsourcing relationship in which a third-party vendor is hired to take over part or all of a client’s human resources functions. A HRO firm allows companies to pick and choose which services will be outsourced and which will be managed in-house. This differs from the services of a Professional Employer Organization (PEO) (see definition) which takes care of all HR functions. HRO could entail the provision of specialist HR personnel on an outsourced basis or the provisions of specific services such as employment law, employee benefits, insurance, health and pension programs. Many HRO providers will also provide Payrolling/ Compliance services.