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HRM Outsourcing - Term Paper Example

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Running head: Management HRM Outsourcing Insert Name Insert Grade Course Insert 09 June 2012 Introduction Outsourcing is a term used in corporate and business setups to mean seeking of services, goods, products, knowledge, expertise and skills from external sources rather than from within the organization…
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HRM Outsourcing Paper
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"HRM Outsourcing"

Download file to see previous pages The question on what should be outsourced has always been a widely debated issue. This paper will explore the issues around human resource outsourcing, particularly those concerned with firm’s performance, strategic direction, ethics and corporate social responsibility. It will also evaluate these issues with regard to how they can be addressed and balanced to achieve the best performance, productivity, and efficiency. An Evaluation of HR Outsourcing One of the ultimate gains of outsourcing is the division of work and skill/expertise specialization, which results in a better outcome and performance. Business process outsourcing (BPO) including HR outsourcing is not only aimed at financial value; relevance of a strong relationship management is that it leads to value addition such as innovation and customer satisfaction (Enlow & Ertel, 2006). The importance of a healthy relationship management cannot be overlooked. According to McKinsey & Company, as quoted by Enlow and Ertel (2006), 50% of outsourced services fail to create the expected value. Firms find value when specialists, who can be more effective in providing services that were previously handled internally, are engaged because both the firm and the supplier can focus on what they do best to improve performance. HR outsourcing is beneficial to any firm and whatever the size of the organization, outsourcing must follow phases for it to succeed. According to Anonymous (2007, July), the use of outsourcing as a strategy proved beneficial in a large funeral and cemetery company, Service Corp. International. The company boasted of the workforce of 2,400 employees in 2,500 locations. The funeral company decided to outsource human resources services; through an advisory firm, various sources of outsourcing were used while focusing on the various phases of the outsourcing process. Because of the many administrative tasks of the company, HR outsourcing led to a reduction in costs. Outsourcing and shared services provide avenues for reducing cost while enhancing efficiency in organizations. Cost cutting associated with outsourcing occurs when staff is assigned with other tasks through involvement of experts or by saving money (Anonymous, 2007, April). While outsourced members focus on their areas of expertise, organization’s staff members focus on core responsibilities. Information Technology investments may not yield results for a long time. Thus, outsourced IT services help to avoid colossal capital investment costs. Equally, the use of shared services appears to be advantageous to organizations by reducing the need for maintaining a massive workforce leading to a reduction in costs through sharing of talents and resources and enhancing productivity (Anonymous, 2007, April). Ethical issues that have been associated with HR outsourcing have included loss of employment in the host country where firms are outsourcing human resource. The practice of getting expertise and staff from other places in order to save costs has been perceived negatively from a social point of view by the local communities from which the outsourcing firm hails, particularly when outsourcing involves expertise or skills that are also available locally. Cultural differences are another concern of outsourcing, which has been mentioned especially among multicultural environments where different skill sets are in existence (Adobor, 2012, p.245). For example, there exist immense ...Download file to see next pagesRead More
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