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Outsourcing
HR outsourcing is the contracting out of parts
or the whole of the functions of HR to external
providers, rather than performing all the HR
functions in-house (Adler, 2003; Patry et al., 1999).
HR outsourcing ranges from simply transferring
noncore activities such as payroll and benefits
administration to external providers, to the
outsourcing of recruitment, training and even HR
strategic planning (Patry et al., 1999; Klaas et al.,
1999).
HR OUTSOURCING BASICS
Is the company comfortable letting
someone else handle its HR functions?
Seek a vendor that will work very closely with your company
It frees the internal HR staff to focus on strategic activities that add more values
than transactional, administrative tasks
It enables decentralized structures that support higher rates of innovation and
flexibility
It alleviates the bureaucratic burden of centralized HR administration
It enables the HR department to play its part in overall corporate downsizing
efforts
It facilitates access to new ideas and approaches outside the organization.
HR OUTSOURCING REASONS
AND BENEFITS
Organizationally-driven Reasons
Improvement-driven Reasons
Financially-driven Reasons
Revenue-driven Reasons
Cost-driven Reasons
Employee-driven Reasons
ADVANTAGES OF
HUMAN RESOURCE OUTSORCING
Enhances time management
Provides better quality products / services
Reduces fixed costs
Better investments through technological
advancement
Support managers to focus in their communicating
and integrating Human Resource policy
Suppliers having dealt with different organizations
always have new experience and approaches
DISADVANTAGES of HR Outsourcing
Reduce corporate robustness by changing support functions
Require considerable care in coordinating information flow with
the agency
Reduce the organizations learning capability by depleting its skill
base
Impair the Organizations ability to integrate processes
Compromise the organizations control over the functions that are
outsourced
Damage morale and motivation as jobs appear to be lost, and
Increase employees' insecurity, whether staff remain in the
Organization or are hired by the Agency
PROBLEMS WITH HR OUTSOURCING
One of the most serious is maintaining the
continuity of skill supply and the retention of
in-house knowledge and expertise.