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Research Proposal: HR outsourcing, opportunity or threat - Essay Example

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One of the most significant reasons why companies tend to move into outsourcing of HR operations is to reduce costs by hiring HR consultants to provide their…
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Research Proposal: HR outsourcing, opportunity or threat
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Download file to see previous pages The null hypothesis states that outsourcing bring about reduced costs; however if the null hypothesis is declared invalid, then the alternative hypothesis will hold good, i.e, outsourcing is not beneficial in terms of costs and should therefore be restored as an in-house activity.
With increasing globalization, the business world is changing and many companies are considering HR outsourcing to be a viable option. Increasing competitive pressure in the global market has forced companies to become aggressive in terms of reducing costs and this is usually achieved through a reduction in the head count. One example is that of Hughes Electronics, which resorted to outsourcing its HR functions such as payroll, hiring and compensation management among other activities, in order to avoid the costs associated with an in-house upgrading of its legacy systems. ( The Human resource department within a firm is crucial for its success because it helps to promote employee satisfaction and in achieving organizational excellence through the optimum use of human capital. In view of the global competition and an increasingly complex legal environment in terms of employee benefits and employer duties, many firms are finding it difficult to function effectively and resorting to HR outsourcing. One view tends to the belief that such outsourcing of HR operations helps to improve the strategic functioning of the firm by reducing costs and improving efficiency. On the other hand, those who oppose HR outsourcing tend to the belief that outsourcing is in effect, a threat to the internal HR service of the company and may not necessarily achieve the projected cost savings.
Jeffay et al (1997) point out that in a study that was conducted in 1996 by Hewitt Associates, 93% of the organizations surveyed outsourced their HR operations while 4% of the group indicated they were actively ...Download file to see next pagesRead More
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