Human Resource Outsourcing

 

“Outsourcing is a form of predetermined external provision with another enterprise for the delivery of goods and services that could previously been offered in- house” (Rajabzadeh et al., 2007). Other highlighted term among definition is “non-core activity” aspect. According to the Burnes and Anastasiadis (2003) core competencies and core activities should not be outsourced.

Why do organizations move toward outsourcing?

Outsourcing accompanies number of benefits to organizations which use it as a strategy in performing operations.

·         To reduce and control cost

·         To exploit the assumed economies of scale and scope offered by the outsourcing vendors.

·         To improve the management’s focus on core competencies.

·         To improve certain institutional aspects such as structure of organization, style of management.

·      To gain a competitive advantage by achieving an unique winning combination of in- house capabilities with that of outsourcing vendors.

·        To migrate technological risk and uncertainty.

·        To improve overall business performance, achieve process improvisation and enhance customer service.

Negative impact of outsourcing

·    Control over the outsourced employees are limited. Although the considered organization engage into outsource agreement employees are a property of outsourcing firm. Perception toward the currently working organization will be a critical issue which led to bear a low degree of commitment.

·         Hidden administrative cost also realizable with the outsourcing.

·         Risk of data security, data confidentiality.

·        Morale of outsourced employees may suffer.


Finally it should be mention that Both outsource agencies and organizations make influences on managing outsourced human resource effectively. Therefore it is a responsibility of each party to rethink about their practices on outsourced employees. It will benefit to both outsourcing agency and current working organization.


References

Burnes,B., and Anastasiads, A. (2003). Outsourcing: a public- private sector comparison. Supply management and international journal.

Rajabzadeh, A., Rostamy, A.A., and Hosseini,A. (2007). Designing generic model for outsourcing process in public sector: evidence from Iran. Management Decision.


Comments

  1. Anuradha Wickramasiri.May 3, 2022 at 4:01 AM

    Outsourcing is famous in Organizations which has positive and negative impacts . Both outsource agencies and businesses have an impact on efficiently managing outsourced human resources. As a result, it is the obligation of each party to reconsider their policies regarding outsourced workers.
    You have clearly explained the pros and cons of outsourcing.
    Good job Amila

    ReplyDelete
  2. Dilini MBAMay 3, 2022 at 5:02 AM

    As discussed, outsourcing is a popular concept nowadays as many organisations outsource various activities. This has many advantages in the form of lower costs, increased efficiency, increased flexibility etc. There are also drawbacks as you have discussed. Good article Amila.

    ReplyDelete
  3. Venushka BandaranayakeMay 3, 2022 at 6:09 AM

    HR outsourcing allows a company to save money and time while also giving them a competitive edge in their human resource initiatives and providing better service to their employees. Good Luck.

    ReplyDelete
  4. ChathuraDMay 3, 2022 at 7:40 PM

    This helps organizations focus on internal resources, do what they do best, and at the same time manage revenue. HR outsourcing helps organizations achieve cost and time savings, provide front runners for talent strategies, and improve the services they provide to their employees. Well written blog in summary form.

    ReplyDelete
  5. Amila PereraMay 6, 2022 at 10:13 AM

    As you have discussed, this is a contractual agreement between the employer and an external party providing services where responsibility of some of the HR Functions are transferred to the external party. Outsourcing gives more time and energy to concentrate more on core operations of the business. You have precisely discussed about the pros and cons of human resource outsourcing. Very Good article.

    ReplyDelete
  6. Nishantha RathnayakeMay 6, 2022 at 7:42 PM

    This is a contract between the employer and a third-party service provider in which the external party assumes responsibility for some of the HR functions. As you mentioned, there are also disadvantages.Very good article

    ReplyDelete
  7. Asela ThennakoonMay 6, 2022 at 10:47 PM

    Employee outsourcing is a new tendency in organizations and both prons and crons of employee outsourcing have nee explained in this article.

    ReplyDelete
  8. Suranga Senarathne - MBA May 7, 2022 at 3:08 AM

    As previously said, outsourcing is a prevalent notion in today's world, with many companies outsourcing various operations.
    This provides several benefits, including decreased costs, better efficiency, and more flexibility.
    As you mentioned, there are also disadvantages.
    Your article is excellent.

    ReplyDelete

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