HRM PRACTICES & ISSUES IN OUTSOURCING AS A STRATEGY.

OUTSOURCING AS A STRATEGY: A BRIEF HISTORY

This is the age of information technology with seamless transfer of real time voice and video channels . The world has turned into a very small place with real distances turned meaningless by virtual connectivity. This situation presented policy makers with a unique set of opportunities hitherto unknown to the corporate world. However this practice was not unknown in other circles i.e. military ; from where corporate world derive most of their flag bearer strategies. US military incurred huge losses during the Vietnam war reaching up to the staggering figures of 1.2 trillion dollars

 As per the figures released by the US DoD . These losses incurred a major chunk of expenditure on their troops and compensations as a result of using agent orange. Henceforth the US DoD developed a practice of deploying allied assets on ground rather than their own ground forces which proved to be highly beneficial from a variety of angles primary among them being political & economic. So, coming in to the late 90s through 2004 technology of military grade became cheap in third world countries like India ,Thailand and bandwidth became available . India had the unique strength in its young English speaking population which was much cheaper than their western counterparts which coincided with the western economies slowing down and their long term debt increasing.

 In early 2001 Goldman Sachs had published a paper on corporate viability in Asiatic as well as African countries in which India came forward as the brightest prospect because of reasons like conducive political environment, linguistic proficiency of the local populace and cheap labor rate for skilled and highly skilled labor. Many firms outsourced their operations and call management operations to India.

HRM PRACTICES IN OUTSOURCING AS A STRATEGY

Outsourcing as a concept is relatively simple to understand but on the practical side it is a potential minefield where one simple mistake can lead to serious ramifications, as such certain standardized practices are required to be executed by any firm that is dabbling in the art of outsourcing.