Five Commonly Outsourced Human Resource Activities

According to this study the most important five commonly outsourced human resource activities are:

  • The assistance or the counseling of the employee.
  • The plans about the pensions or the retirement.
  • The benefits of the other employee (Health, Medical, Life, Insurance, Cafeteria, etc)
  • Training
  • Payroll

The use of the outsourcing has been considered for the number of (overlapping) recognizing advantages. The resources are allowed to first pay the attention on the main business activities where they have the skills and are likely to do the best. Secondly, from the specialized service providers it allows the firms to profit from the increasing comparative advantage and who are having the skills in the areas they are concentrated. By the usage of the temporary subcontractors to cover the fluctuating demands for the labor it enables the organizations with the greater flexibility and the productivity.

Other benefits of the saving the direct costs have also been brought by the just in time use of the human resources (e.g. reducing the headcount and the overtime working) and the indirect costs (e.g. cutting the administration and backup costs, saving recruitment and training costs, saving the absenteeism costs, and reducing the industrial relations problems). Fourth one is the, the opportunities for the organizations to transform the burden of risk and uncertainty that is associated with the business to someone else are created by the outsourcing .

For the renewal of the contract the outsourcing provides the organizations to keep the future costs down by the selection of the most competitive tender. The final reason that is listed here is mainly interested on the capability of the building of associated with the organizational learning if the above reasons for the outsourcing are mainly concerned with the cost reduction. The partnerships can be created between the contractors and clients by the outsourcing which may allow the learning and cross fertilization among the two organizations which has been in the argument .

The learning processes are considered as the associated achievements that have been resided in the networks and do not respect the formal organizational boundaries is the argument by the writers on the organizational learning . From the point of the strategic outlook the importance of the networks and inter organizational relationships (e.g. alliances, partnerships) is also recognized. A network is considered as the one that provides the timely access to the knowledge and the resources which are otherwise unavailable according to the Powell et al while testing the internal skills and learning capabilities.

The outsourcing is also believed to be the most productive one for the development of the core competence of the organization by the advocates of the resource based view of the organization mainly in the relation to the human resource practices. Werner felt have rediscovered the idea of the RBV and it has been developed into the robust theory by the Barney . To gain the support for competitive advantage by the execution of the strategies this uses their internal strengths, by responding to the environmental opportunities, while neutralizing the external risks and avoiding the internal weakness. For the more competitive product the outsourcing can enable the shortcut, but for the building up of the people embodied skills it dynamically contributes very little amount that are required to support the product leadership which has been pointed out by the Prahalad and Hamel.

Leave a Reply

Your email address will not be published. Required fields are marked *