Outsourcing Human Resources

 

Introduction

Outsourcing is obtaining work previously done by employees inside the organization from sources outside the organization. People are the most important asset of an organization. Many organizations around the globe are taking more strategic approach to managing their human resources. Human Resource Outsourcing is a process in which an organization uses the services of the outside force to take care of its HR functions.

 

The growth in outsourcing, in particular human resource (HR) outsourcing, has been triggered by the enduring efforts of organizations to reduce costs, to focus on strategic issues, and to improve services to the employees (Chiang & Shih, 2011)

                            Source: Slideplayer website 

 

The needs of HR Outsourcing

 

i.                 Enabling businesses to focus on core operations

ii.               Delivering cost savings – direct or indirect

iii.              Helping to create a stable, cost-effective operating platform

iv.              Transferring focus from internal processes to achievement of business goals

v.                Realizing investment in HR transformation and IT systems

vi.              Ensuring compliance with legal, regulatory and best practice re­quirements

vii.            Transferring risk and liability for people issues.

 

Benefits of HR Outsourcing

·       Focus on Core/Strategic Issues

·       Cost Reduction

·       Flexibility

·       Reduced Risk

·       Increased Efficiency

·       Access to broad skills and experiences

·       Remove non-operational distractions from the line

·       Access to industry best practice

·       Remove pressure to recruit, manage and motivate a diverse in- house HR team

·       Give Employees a stronger career path

·       Increase commitment and energy in non-core areas

·       Turn fixed cost into variable costs

 

Outsourcing in Department of Animal Production and Health

As a government organization Department of Animal Production and Health is outsourcing some of HR related functions. Such as computer typing related tasks are outsourced to other government training organizations. Because of the limited number of staff members and the huge work load these tasks cannot be done by original staff members.

 

The common barriers in outsourcing

i.                 Lower-than-expected service levels

ii.               Loss of control

iii.              High employee turnover at the outsource provider

iv.              Difficulties managing the provider

v.                Higher-than-expected (hidden) costs

vi.              Employee resistance

vii.            Cultural differences

 

Conclusion

Organizations should understand that the success of HR outsourcing is immensely dependent on their connection with the service providers, the important factors such as trust, business understanding, commitment, communication, and top management support are crucial. Outsourcing human resource functions and organizational performance is interrelated. According to (Alzhrani, 2020) “Outsourcing HR functions has a key role in the improvement of organizational performance which can be characterized in three major dimensions; productivity, profitability, and cost efficiency.”

 

References

 

Alzhrani, A., 2020. Outsourcing Human Resource Functions and their Impact on Organizational Performance. [Online] journal of business. Available at: <https://journalofbusiness.org outsourcing human resource functions> [Accessed 30 April 2021].

 

Chiang, Y.-H., & Shih, H.-A. (2011). Exploring the effectiveness of outsourcing recruiting and training activities, and the prospector strategy’s moderating effect. The International Journal of Human Resource Management, 22, 163-180.

 

Your Article Library. 2021. HR Outsourcing: Meaning, Need, Types, Benefits, Barriers and Future. [Online] Available at: <https://www.yourarticlelibrary.com/human-resource-management-2/hr-outsourcing/99683> [Accessed 30 April 2021].