HR Business Process Outsourcing - Essay Example

HR Outsourcing Case 2 HR Outsourcing and Business: Human resources form the main assets of any business. In the current times, human resources has grown to become one of the most complex and challenging field in management and the it is in the hands of the human resource managers and the human resources teams to work towards building a strong workforce for the company and to also ensure that the people perform their best and are able to handle their expectations and responsibilities effectively (Garber). Employee satisfaction and employee performance form a major part of the success of any business. Hence in order to ensure that the employees are satisfied and productive it is crucial to develop a special department which can lead to high costs (Friedman). Hence in order to meet these needs as well as to ensure that the company can find a less expensive solution for the same, it is best to outsource the human resources functions so that a third party manages all the human resource functions. There is a wide range of services that human resource outsourcing firms provide, however there are a number of firms which also specialize in recruitment and pay rolls alone (Ulrich, Brockbank and Younger). The need for outsourcing of human resource for a business is mainly dependent on the size of the business and also the level of control that the firm wishes to maintain. It is important to note here that outsourcing of human resource activities can prove to be very beneficial to companies as outsourcing allows companies to send out both time consuming as well as expensive processes like training, recruitment, and also benefits administrations (What Is HR Outsourcing?). There are a number of benefits of using outsourcing of the human resource functions as well. Companies tend to benefit in terms of the costs as human resource functions generally involve very high profile and complex functions like recruitment, training and development, retention and also database management which involves not only high variable costs but also high fixed costs. Hence when a company outsources the human resource tasks to other companies, there is a major cut in costs for the company (Stopper). Human resource outsourcing plays a major role in the overall satisfaction of the employees as well as allows companies to cut costs more effectively. With the intense competition that companies now tend to face, strategies like human resource outsourcing are major cost cutting moves and also prove to be beneficial in bettered productivity as well. There are several non value adding processes in human resource which can be outsourced and these tend to save time of the human resource teams and also permit better overall productivity of the teams as well. These tasks however can prove to be the specialty of the outsourced company, hence allowing better results at much lower costs. It is clear that maintaining an human resource team itself can prove to be much more expensive than outsourcing (Ulrich, Brockbank and Younger). Hence this proves to be a more effective and significant method to save costs. Companies also benefit from the cheap labor and the infrastructure that are available in the offshore companies as well. These in turn help in reducing the costs and leading to higher levels of cost savings (Friedman). It is also crucial to understand the impact that outsourcing has on the companies in terms of compensation and benefits. Compensations are generally managed very effectively when outsourced to specialized firms, as these companies tend to take into account the competitive environment and also several other external factors (ebusiness Master). Also, these companies are able to effectively conduct surveys and gain feedback on a regular basis, which helps the company in the retention attempts as well. The outsourcing provides a chance for companies to be free of the complex tasks of employee benefits and also allows decision making to be based on a broader and well researched manner (Stopper). It is also important to consider Ethics and human resource outsourcing for any business. With the growing competition and the high focus on business ethics, there is a higher need for businesses that expand their business to not only practice ethically, but to also completely understand the ethical impact of the decisions made within the business (Blokdijk). The main ethical issue that companies face in terms of the human resource outsourcing mainly only relates to confidentiality of information. Confidentiality is a major concern for any form of outsourcing. Here in the case of human resource outsourcing, the companies face the possible issue of losing personal information of employees, and also misuse of the information by third parties. This can prove to be dangerous for the employees and in turn can also impact the business as well. This can also lead to the possibility of the company to lose control over confidential data (ebusiness Master).      Another major issue that companies tend to face is the need for internal human resource teams. In a number of cases, there is a need for an internal human resource team to solve issues and some issues are best resolved by in house managers. Here these issues can either be ethical related or also different areas of human resource like recognitions, incentives, benefits and many other which are most effectively handled by the in house management in most cases (ebusiness Master). It is also important that a simple human resource team is always available within the company as this helps in better interaction with the employees in urgent times. Also, having an in house team also helps in better levels of motivation as well as highly satisfied employees as well (Blokdijk). Also, another major element that needs to be considered is the corporate social responsibility of the companies as well (What Is HR Outsourcing?). Every company is bound to and requires being responsible to understand their sense of obligation that it has to the society. Also, it is important that companies’ focus on the responsibility towards employees, suppliers, stakeholders and also the community as a whole. Another major element that needs to be considered here is the pricing of the services of outsourcing (Ulrich, Brockbank and Younger). It is crucial that these services are standardized and justified. Every expense of the company requires to be completely justified as these investments simply mean that the investors receive lower returns. Hence it is important that all the employees are satisfied with the service as well. The main idea is to ensure that employees’ needs are met while outsourcing the human resource functions to a third party. Employees must be satisfied and should have high motivation level as they are crucial for the success of the firm (Lawler III, Ulrich and Fitz-enz). Any human resource outsourcing can be considered to be an effective investment only if the employees’ needs are met and issues are resolved effectively within a proper time period. Also, the aim needs to be as employee centered as possible. It is hence the responsibility of the outsourcing company to ensure that the chosen company is able to effectively deliver these and to focus on the employee needs (Garber). On the whole, it is evident that outsourcing of the human resource has proved to be very effective and useful in most organizations. It is clear that outsourcing Human resource management can help the company’s employees to work on more productive areas and to focus on more value adding processes. It is evident that the benefits of outsourcing the Human resources functions are plenty, however to ensure that the overall human resources is a success, it is important that companies maintain at least a few HR representatives in house as well. This helps in solving the urgent issues and also provides the employees with a sense of satisfaction that the HR representatives are in house. On the whole, outsourcing human resource functions has a major positive impact on the companies. Works Cited Blokdijk, Gerard. Outsourcing 100 Success Secrets - 100 Most Asked Questions: The Missing IT, Business Process, Call Center, HR -Outsourcing to India, China and more Guide. Emereo Pty Ltd, 2008. eBusiness Master. Outsourcing Survival Kit - Want To Branch Out To Other Lucrative Areas Without Sacrificing Your Current Business? eBusiness Master, 2010. Friedman, Debbie. Demystifying Outsourcing: The Trainer's Guide to Working With Vendors and Consultants. Pfeiffer , 2006. Garber, Peter. The HR Skills Series: Terminations. HRD Press, Inc., 2010. IDC. HR Outsourcing Field Grows: EDS and Towers Perrin Unite. IDC Research, 2005. LawlerIII, Edward E., et al. Human Resources Business Process Outsourcing: Transforming How HR Gets Its Work Done. Jossey-Bass, 2004. Stopper, William G. Outsourcing's effect on HR Leadership Development.(PERPECTIVES)(human resource): An article from: Human Resource Planning. Thomson Gale , 2006. Ulrich, Dave, et al. HR Transformation : Building Human Resources From the Outside In. McGraw-Hill, 2009. What Is HR Outsourcing? All Business. 20 October 2004. 27 January 2011 . Read More