The paper "Outsourcing of Human Resource" is a perfect example of human resources coursework. The outsourcing phenomenon has been increasingly receiving attention from different business organisations and one form of which has been very widely used by large companies is Human Resource Outsourcing (HR outsourcing). HR outsourcing has been seen as an opportunity for some researchers and as a threat by others. With the increase in globalisation, outsourcing has gained an important business approach for attaining competitive advantage. In this assignment, we discuss the major reasons behind the outsourcing of human resource by an organisation and also the disadvantages and the further limitations of the same.
We study the functions of HR which are outsourced and theories in relevance to the same. Further, the future of the phenomenon is discussed and how more and more organisations are turning towards HR outsourcing to cover up various aspects of human resource management. 2.0. Outsourcing of Human Resource Organisations today are looking for every possible avenue to reduce costs and increase efficiency and the human resource department is not immune to this trend. Outsourcing is the work of a company done by people other than the full-time employees of the company (McIvor, 2005).
In modern-day business, outsourcing has become very complex and companies are outsourcing vendors for numerous reasons and are becoming a very significant factor in today’ s business world. Consideration of outsourcing human resources is a part of the growing trend. The HR outsourcing decision has various different challenges which are required to be considered before implementation as outsourcing the non required function is a key challenge and the service providers are to be reimbursed by the companies who contract them (Abdul-Halim and Che-Ha, 2009). 3.0.
Reasons for HR Outsourcing Human resource outsourcing has certain advantages and the reasons behind the same are listed as follows: Gaining Competitive Advantage: Outsourcing is a managerial decision and there are some major factors which assist the organisations in taking decisions on human resource management. These factors are dependency risks, spill-over risks, trust, relative proficiency, strategic capabilities and flexibilities. The outsourcing of human resources provides the managers with spare time to deal with strategic business issues (Corbett, 2004). Minimising Costs: Reducing the cost of production is the priority of all profit-making companies.
Profit maximisation by cutting cost is the target of every organisation in this real economic world and this can be attained through outsourcing (Schouker, 2008). Reduces Workload of Staff: Human resource outsourcing helps in reducing the workload on regular staff. It takes off a load of some of the managers and the other staff employed. This reduction of workload helps the managers to concentrate more on the business of the organisation with improved planning, operation and growth of the business (Klaas, McClendon and Gainey, 2001). Strategic Move: Outsourcing is a strategic move for some organisations with the vision to reduce costs, the achievement of workforce flexibility, access HR expertise and focuses on managerial resources.
Each organisation has its own goals and objectives, the achievement of which requires a well developed strategic process (Baca, 2009). Technological Advancements: The recent technological advancements have added to the issues of outsourcing as it has created the scope for provision and purchases of outsourcing services. The modern technological gadgets demand the supply of labour also requiring specialised skills to run those making organisations to resort to outsourcing for meeting such requirements. Adds Flexibility: Flexibility could be increased demand or change in demand for meeting customer needs and satisfying their demands.
Outsourcing enables companies to avoid these two constraints. It also helps in meeting the changes in the volume of production as well as respond to seasonal changes in demand (Mol, 2007).
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