BA522 HRM: Developments and Debates - Essay Example

The rapid growth in outsourcing especially over the past decade has changed the way business is done globally and this has had its benefits and challenges. Outsourcing has resulted, in most cases, to downsizing and job losses in an organization which can have an impact on an organization and the HR function. This paper analyses the implications of outsourcing and how the human resources (HR) copes with such implications as well as HR’s role in managing downsizing. Downsizing refers to a planned reduction or elimination of jobs or positions in an organization often in an attempt to cut down on costs, improve productivity and quality, improve the organization’s profitability and efficiency as well as enhance an organization’s competitive advantage (Maertz, et al, 2010).

While these are the main benefits of downsizing in an organization, some studies have also identified some failures of downsizing such as reduced retention of employees in an organization, higher turnover intention and reduced employee attachment in the organization (Maertz, et al, 2010; Armstrong-Stassen and Cameron, 2003). Despite the positive or negative impacts, downsizing is not an all or nothing action. It can indeed take a number of different forms such as offshoring, outsourcing or layoffs.

Regardless of what form it takes, downsizing deliberately eliminates jobs within an organization, and the human resource office often has to deal with the implications of such reductions. Outsourcing which entails contracting out previously internally done processes or work within an organization done by an external organization with required expertise (Sohail, 2012, pp.52), has since its inception grown to be more sophisticated. Initially consisting of outsourcing and offshoring of IT services due to higher rate of IT adoption during the late 90s period, outsourcing and offshoring has evolved to include more outsourcing of business processes (Palugod and Palugod, 2011).

This implies that