Analysis of human resource outsourcing with regards to competitiveness of organizations

Seetharaman A Seetharaman A

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Outsourcing and Supply Chain Management Human Resource and Talent Management Employer Branding and e-HRM

Abstract

Human resource outsourcing means that personnel-related matters are contracted to another organization. In other words, this refers to the transfer of responsibility for the management and application of human resource processes to an external party. The war for talent in the ever changing business environment is an essential factor that contributes to the outsourcing arrangement. The dynamic and complex nature of legal environment may also lead companies to engage with external contractors in order to obtain specific field expertise. Changing business structures may push internal HR professionals to focus their attention on facilitating the change in their respective organizations. Aside from that, the increasing transactional HR costs drive HR departments to consider outsourcing as well. Latest HR information systems significantly increase HR productivity, enhanced control of employee benefits, beefing up compliance initiatives, and lowering transactional HR costs. This paper discusses the issue of human resource outsourcing in a sequential manner. The literature review briefly discusses the reasons behind the trends in human resource outsourcing. Then, the discussion will look at how to select the best business service provider. It discusses the criteria and variables that are needed to be considered before a company decides on the outsourced service provider. Lastly, the discussion will focus briefly on how to achieve a successful outsourcing relationship with the selected provider along with issues pertaining to agency contract. This paper attempts to meet the stated objectives within the scope of vendor selection, types of services and relationship, and outsourcing governance and uncovering how outsourcing some or all HR functions may well contribute to one’s competitive advantage.

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References

1999HR OUTSOURCING AND ITS IMPACT: THE ROLE OF TRANSACTION COSTS 2002Strategic sourcing: benefits, problems and a contextual model 2003Outsourcing HR Functions: When—and When Not—to Go Outside 2013The Effects of Outsourcing and Devolvement on the Strategic Position of HR Departments 2003Professional Employer Organizations and Their Role in Small and Medium Enterprises: The Impact of HR Outsourcing 2012Human resource outsourcing: Market and operating performance effects of administrative HR functions 2012Motivations for HR outsourcing in Australia 1995Risk of outsourcing – applying risk management techniques to staffing methods

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