Human Resource Outsourcing

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LITERATURE REVIEW

OUTSOURCING:

Outsourcing is a strategic activity in which some of the internal activities of the organisation are delegated to external firms because of various reasons such as:

- To bring in better focus for organisation

- To exercise better control over operating costs

- To get greater flexibility to define the requisite service readily available

- To sustain the same level of competency over a period of time

Usually the firms to which the activities are outsourced are specialized in their area of work and so the parent firm gets the advantage of getting the work done through competent employees. Therefore, outsourcing gives competitive advantage to the companies which can be easily sustained by them without much effort.

ADVANTAGES:

Expense reduction: Since outsourcing firms are specialized firms, they perform activities better, cheaper and faster as compared to the companies that perform these activities in-house. Cost reductions can also be obtained by combining activities. Specialised knowledge and expertise may be provided by outsourcing firms, thus eliminating the need to maintain such knowledge in-house where it may be used only occasionally.

Saves management’s time and efforts: Management can shift their time and efforts away from transactional tasks and focus on the core competencies that distinguish the organisation from its competitors. Repetitive problems become the responsibility of the outsourcing firm there by keeping the in-house management’s involvement to the minimum.

Increased organisational competencies: with reduction of time that is spent on day to day transactional tasks, more time and effort can be devoted to transformational activities that directly support the core competenc...

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Level 6: Highly Confidential Activities (HCA)

Secrecy is required in the performance of some human resource management activities. Layoffs, plant closings, and restructuring are examples of activities that must be kept confidential. These kinds of activities, obviously, have a much lower potential for being outsourced than those that do not have a need for secrecy or confidentiality.

Level 7: Management Decision Activities (MDA)

Some human resource management activities require the direct and specific involvement from top management. The structure of the human resource department or the direction the human resource function must take are examples of activities that require direction from top management. There is little opportunity for outsourcing decisions that must be made by the executive level of management in an organization.

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