Conclusion and Recommendations
With the increase in core competition across the markets all the organizations are striving a lot to gain the competitive advantage. In general an organization is composed of different departments and sections where each and every department has its own roles and responsibilities and in this context each and every department should deliver the desired outputs to make the performance of the organization enhanced. Among all the departments Human resource management has the top priority and in this context the HR department has the key role to play in enhancing the human resource capital and solves all the issues such that the organization performance is enhanced. The business conditions are ever changing and also the requirements to concentrate on the core business value has enhanced a lot these days and for this purpose most of the organizations are implementing the strategy of outsourcing the noncore administration activities to the third parties and thus they are getting some breathing time to concentrate on the core business values.
Among the noncore administration activities that were outsourced HR tasks has a special attention and most of the organizations are outsourcing all the noncore HR administration tasks and also few core HR administration tasks. With outsourcing the HR, now the organizations are free enough to concentrate on their core business value and thus the overall business and organization performance is improved a lot. Among the noncore HR administration tasks that were outsourced payroll, leave management, training and development, staffing, recruitment, employee benefit schemes and employee welfare activities has the major share and most of the organizations prefer to outsource these activities to the Hr outsourcing vendors.
If a perfect HR outsourcing there are many advantages which include reduction in cost in terms of both direct and indirect cost and also the overall efficiency of the organization is enhanced as there is scope to improve the business operations leaving the HR issues to the vendor. In this context few research questions are identified in this research and quantitative research methodology is followed to gather the required information. Interpretivism is used as the research philosophy as few interpretations need to be done in gathering the primary source of information and Inductive research approach is followed in this context, where the actual theory of the research is derived from the observations with respect to the research problem considered.
Importance of HR outsourcing and the key pros and corns of it are studied at this research level and the solution to the research problem identified requires proper observations without any assumptions and thus always the inductive research approach is suited for this project. Two HR managers, one business development manager and 10 employees are interviewed to gather the required primary source of information using the questionnaires as attached in the appendix section. From the findings and analysis after the interview process the key observations are given as below based on the opinions and observations from interviewing the respondents involved in the research.
From the findings it can be observed that when the HR activities like training and development, staffing and payroll are outsourced to a third party the bank can concentrate on the core operations like finance and business activities and also they will get ample time to open new business areas. From the findings it can be observed that when the HR activities like training and development, staffing and payroll are outsourced to a third party the bank can concentrate on the core operations like finance and business activities and also they will get ample time to open new business areas.
The direct and indirect costs are reduced when it comes to the employee welfare programs and also training and developed. As per the findings it can be analyzed that when the HR activities are outsourced to the vendor the cost of operations on the bank side are reduced and even the risk of handling the issues like staffing and training are also reduced and when these risks are reduced the management can now concentrate on their other important business aspects and thus the overall organizational efficiency is also improved.
Organizations are really benefited with HR outsourcing as they can lead to their core business growth by avoiding the HR risks at their sided and in this context the HR outsourcing can be considered as the best option as all the issue raising aspects can be diverted to vendors and the vendor can handle them easily and thus the overall operational costs are reduced. If the organizations outsource the payroll to a vendor, all the related issues are reduced and even the process is defined with a clear structure.
In general employees will always come up with payroll issues and in this context the HR outsourcing vendor can handle them meanwhile reducing the core burden on the organization and if the organizations can outsource the non core HR administrations tasks then they can meet up the expectations of the customers and also set the annual and quarterly targets to the business team as they don’t have the HR risk and thus in this manner both the costs are reduced and also the overall organization performance is enhanced.
The HR professionals can get ample time to develop the new strategies at their bank as they have already outsourced the HR activities to the vendor and in this context they can pay more attention towards the strategic functions and thus the overall performance of the organization is also improved. In general there are many HR activities that were outsourced and among them the key functions are personal administration, payroll management employee counseling and assistance, training and management of employees and employee relocation. If these functions are outsourced almost 80% of the HR professional’s job is reduced and thus they can focus more on the key strategic functions of the bank and thus they can introduce new HR strategies and functions across the organization to enhance the employee turnover and also achieve the organizational objectives.
In general the HR professionals are always with the employee issues related to taxes, payroll, salary hikes, relocation and work flexibility and in this context a lot of time and mind power is consumed and they can’t be involved in the core organizational and business activities and thus if these activities are outsourced to the right HR outsourcing vendor all the risks associated with the employee issues are reduced. Once these risks are reduced now the HR professionals can be involved in the core strategic functions of the organizations and they are provided ample freedom to concentrate on the core business and administration issues and thus the overall output and turnover of the organization is improved.
The most common negative aspect identified in this research is that most of the employees are not willing to share their problems with a third party and if this is the case the required employee satisfaction is not achieved and even their performance is affected and thus the overall HR outsourcing is wasted and cost savings is the main reasons considered by the organizations and thus they outsource their key aspects like payroll and training and if they are not handled well by the vendor then the negative impact would be more on the organization and leads to low performance of the organization as well.
There are some chances where the employees are degraded against the job satisfaction and job guarantee where the employees may not feel comfortable in sharing all the issues to the outsourcing vendor and this may lead to confusions among the organizations and the HR outsourcing vendors. Apart from these negative aspects of HR outsourcing the overall organizational performance is improved and cost is reduced a lot with HR outsourcing and even the key issues like personal management and employee welfare are also well executed with outsourcing the HR and thus always HR outsourcing can be considered as the best option to improve the overall efficiency of the organization.