Apart from the wide range of benefits available with HR outsourcing there are some hidden flaws in this context and as per the research done in this project they are analyzed in this section. As per the interview with the HR managers, business development manager and few employees there are some negative impacts identified and they are discussed in this section. 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 this analysis is similar to the opinion of Kular. 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 and this analysis is similar to the opinion of Thoms.

Sometimes the contracts written will also lead to negative impact on the HR outsourcing with the service providers and the contract should be written in a well defined manner. When the HR managers were interviewed in this regard they said there is some changes in the quality of service against the payroll and training issues and few employees are complaining about the quality during the contract period and this will lead to break up the contracts some time and finally the organization may lead to financial crisis and this analysis is similar to the opinion of Ferrinho.

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 and this opinion is similar to the research done by Lilienthal. Learning capability of the organization is also reduced as all the learning aspects are outsourced and in this context the organization may not be aware of the current trends and technologies to be implemented and this analysis is similar to the opinion of Hamilton.