Category: MBA Dissertations

Problems can be balanced if firm takes necessary paying precautions more awareness to details and redesign of process and keeps HR strategic parts at the same time like planning of human resource in-house as around activities which are critical are resolved by it and capabilities which are core concepts and thus sustainable lead is provided in long run. This is considered as reason why activities of HR like processing of payroll is normally outsourced since less competitive advantage is provided by it and is for any organization a non-core activity.

There is require to “The Journal of Nepalese Business Studies” which establish balance between internal operator’s organizations and external service providers require outsourcing their activities of HR as per size. Mid and small sized organization should outsource activities of HR like payroll since scale economic may be lacked by them to implement functions effectively. Outsource activities of HR should be implemented by large companies like process of benefits because then benefits border range are offered which decrease the handling scale economics the operation in-house.

In multi supplier situation case, change management, good governance and structure of dispute resolution require to be in located. It should give guarantee by the organization that nicely all parties should work jointly. Though, contracts which are long term are avoided when rapid changes are occurred in things. Since outsourcers are considered as third party, communication is travelled in three ways not in two ways involving firm, employees and vendor, providing room for mistakes. In such situation, very critical role is played by communication. Roebuck, Sears, and Co., giant of retail had issue knowledge. Hence it has chosen Hewitt Associates as their provider of HR service to take over work and both organization ranked commitment and communications to mutual aims to their success as top two keys. This is considering as foundation for ability of them to adjust to change and in order to innovate gaining the desired activities. 

One problem which is faced with HRO is in accepting difficulty the changes by employees who are presented in the organization. Anxiety is also existed about control losing over outsourcing of lay Human Resource and the process:

Challenges and issues are off. Reaction of such employees normally creates some problems in outsourcing process. Resistance level will be higher when later added scope volume is large. Programs of change management and effective communication are crucial especially at this specific stage when scope which is new is presented by implementing platform of a self service. Such systems actually are not by instinct obvious. Employee help is needed in this new system adaption. There also are different risks associated with this HRO. One example for this risk considers risk of business which may occur due to cheap contracts of outsourcing. Spillover risk is also existed there that is confidential matters exposing to competitors.

Risks of political issues are another thing in outsourcing process. Such as in the US controversial issue during election time when outsourcing was blamed by opposition for unemployment and needed to be banned. In HRO another problem is sometimes threat is brought by it to the culture of organization and totally out of control is got by it if gone into unsympathetic outsourcer’s hands. Also organization of vendor should have good knowledge on laws and in compliance manner operations should perform with his laws and country of clients otherwise issues which are legal may crop up and adversely may affect organization.

Another problem which may occur is personal touch loss with employees. Because HR person of in house daily interacts with employees, more of interest is presented on your employees     by them. This is considered as main reason in why Stanley and Morgan decided to give services which are retirement planning in house. Internally the talent loss generated, fear of provider of service ceasing the trade, potential redundancies, concentration loss on customer and on the product more focus are other challenges or drawbacks of HRO.

When also a PEO is being used by an organization, to hire right is given and their employees are fired, for specific business may not be desirable. PEOs mostly maintain that to fire, hire and to employee discipline final right should be provided. In long run of organization this is not considered as healthy source. And if e-service usage is decided by the organization, same thing would stay with any ASP. When each thing is handled and stored by online, concern is presented about the potential crashes as well as the security, both of which be identified by any organization which is presented in business sector. Complaints which are common about outsourcing range of HR to payroll from payroll mix-ups not being dropped to deny claims which are medical on time.

Another major issue is selection of vendor in HR outsourcing. If wrong vendor is selected, then able fruits won’t be enjoyed which is HR expectation. Important requirement which is specified by many companies while making selection process of vendor for HR outsourcing is demonstrated of vendor process expertise of HR, which is considered as response of 95% respondents as specified in survey which is arranged by Hewitt associates in 2005 year.

There are different types of the benefits and reasons within the HR outsourcing process which are as follows:

The organization driven reasons:

• It will improve or develop the efficiency of the individuals
• It will increase the flexibility range which will help in managing the changing conditions related to the business, it will increase the demand of the products as well as the services
• It will even change the standard of the particular organization
• It will even increase the value of the products as well as the services, the fulfillment of the customers wants and needs etc.

The improvement driven reasons:

• It will improve and develop the performance related to the services
• It will even achieve the capability, the skills as well as the technologies related to the organization

Improve management and control

• It will improve and develop the risk management process within the organization
• It will even provide the new ideas related to the business
• It will even develop and improve the reliability as well as the representation by means of uniting with the higher authorities

The financial driven reasons:

• It will reduce or decrease the funds within the resources
• It will even produce the money by means of forwarding the funds to the supplier

The revenue driven reasons:

• It will obtain the access towards the market as well as it will offer more number of the opportunities related to the business within the entire network of the supplier
• It will even fasten the development process by managing the capability as well as the procedure systems of the supplier
• It will even improve the sales as well as the capability even though when the financial resources are not available
• It will develop the current skills for getting more number of the benefits

The cost driven reasons:

• It will even decrease or reduce the costs by means of the supplier authorities as well as it will even offer the low cost structure
• It will even turn the stable costs into the irregular costs

The employee driven reasons:

• The HR outsourcing process will offer the strong career path and developmental chances to the employees
• It will even increase and improve the dedication as well as the powers within the non-core areas.

The disadvantages of the HR outsourcing process are as follows:

• It will reduce or decrease the corporate strength by means of the varying functions related to the services
• There is a necessity of the support for the process of organizing the flow of the information within the organizations
• The HR outsourcing will even decrease the learning ability of the organization through reducing the skills foundation of that particular organization
• This outsourcing process will even damage and spoil th capability of the organization towards its incorporation process
• This process will even influence the entire functions of the organization which is been outsourced
• It will even spoil the self confidence as well as the inspiration towards the job responsibilities
• The outsourcing is not the constant job and it will not provide the job security to the employee because outsourcing is the ongoing changing process

In general there are different types of specific strategic and the operational level reasons for the purpose of using the HR outsourcing process by the organizations. The increased demand within the production, the productivity as well as the growth and development initiated the organizations to observe their own HR process in their organization which have lead to the process of the strategic outsourcing and separated the general services and the strategic outsourcing services.

According to (Greer, Youngblood and Gray) the HR outsourcing decisions are considered as the important aspects which are playing the vital role within the process of reducing the costs for the purpose of the HR services.

According to (Roberts) the HR functions are facing the tough and heavy competition in order to exhibit the values related to the efficiency and the success. Most of the aspects related to the HR functions are been carried out through the different types of the outer service providers.

According to (Turnbull, 2002, p. 10) the HR outsourcing is the process which will give more benefits to the organization and by using this process many organizations can save more amount of funds which they are investing on their HR’s. Generally the outsourcing is the process of motivating and supporting the HR professionals in the organization related to the clients in order to play the strategic role within the process of design as well as the implementation of the programs which are related to the workforce.

According to (Ulrich’s) The HR is should play four different types of roles such as strategic partner, the administrative expert, the employee champion as well as the change agent.

According to Greer et al the HR outsourcing plays a vital partner role within the HR department and the HR is the person who will add high value to the organization and will play one of the significant roles within the success of the organization. Most of the organizations are even using the HR outsourcing process in order to avoid the politics within the organization as well as to improve and develop the effectiveness of the organization.

According to (Sisson & Storey) the actual purpose of the HR outsourcing is working efficiently and some of the difficult reasons for the purpose of the outsourcing the HR is providing the special and expert services, the cost reduction as well as allowing the HR professionals to work in a strategic way to achieve the goals and objectives of the organization. It is even specified that the HR outsourcing process is not only performed to cost reduction process but it will work as the significant strategic tool.

According to (Oates) the outsourcing is the special type of the decision which is the strategic decision and it is considered especially at the senior level management.

According to the survey report by IDC-www.idc.com the HR BPO-business process outsourcing is considered as one of the fast developed sector which belongs to the HR services. Generally is the HR is been outsourced in a correct way then it will lead to the development within the quality of the services, it will even save money as well as the time. If the HR outsourcing services are poor then there will be poor quality if services. It is already been proved that the adequate and suitable services are been offered by the HR outsources but they will not offer the outstanding services.

According to (Patrick Wright, Cornell University professor), the quality of the service is one of the important aspect within the HR outsourcing process. It is even been specified that even though the HR outsourcing will offer better quality of services but it is not sure that the costs of outsourcing is less costly. Most of the organizations and the companies outsource their HR’s in order to get more number of the services with low costs.

In the year 2004 the survey conducted by SHRM’s regarding the process of HR outsourcing among 169 individuals 56% of them told that most of the organizations are outsourcing their HR’s for the purpose of saving the money as well as for reducing the operating prices. In this survey nearly 70% of the organizations have specified their views and feedback that they have faced the negative practices while outsourcing their HR’s and projects and even they are not even satisfied with the costs as well as the difficulties within the process of outsourcing. And finally they came to a conclusion that there is a necessity of the support from the senior management in order to manage the HR outsourcing process. The reasons for this process is that the lack of the simplicity within the costs of the project which belongs to the outsourcing process. 

And nearly 57% of the companies have revealed their views that they have spent more amount within the process of contracts by the project dealers or else the outsource supplier. Some of the other companies even specified that they have even spent the secret amount for the purpose of managing as well as controlling the projects related to the project outsourcing. One of the significant issue within the process of outsourcing the HR is the process of selecting the appropriate HR activities which are to be used for the purpose of outsourcing. While making the decisions related to this process the organizations should take the different types of the activities into consideration in order to develop or improve the performance of the organization.

It is the necessary requirement to give the difference between core and noncore activities to do. It has been suggested by the Finn (1999) that the primary distinction between the Human resource core and the noncore activities can be made. It has been considered one step further by the Ulrich (1998) that the core activities are those transformational works which creates the specific values for the employees, customers, and investors.

The noncore activities can be considered as the transactional work which is regular and typical and is the one which could be easily copied and imitated. The training and development along with the management facilities are the most important areas that are to be outsourced and the industrial relations skills are the least likely areas which are found by the Shaw and Fairhurst and they have supported the findings of the Hall and Torrington. In order to sustain the earlier findings more proofs have been provided by the large scale survey (Vernon, Philips, Brewster & Ommeren).

 In the European countries the survey has been carried out on the 3964 organizations every company having more than 200 employees in the year 1999. On the four different areas of the human resource outsourcing it has pay the attention. They are the training and development, recruitment and selection, pay and benefits, and workplace outplacement or reduction. In the survey nearly 97% of the organizations have used the external providers in the human resource in order cover at least one of the main service areas which has been examined during the survey. The most usual bought in service are the training and development activities which has been observed in the results. In at least the three of the areas that are identified by the survey have observed that one third of the organizations have used the external providers.

During this process the companies that are surveyed nearly 50% of them have remained constant in the usage of the external providers while the 40% of them gave the report of the increase in their use. For the purpose of the pay and benefits nearly 32% of the U.K. organizations are making the use of the external providers especially. The type of the human resource activities that the organizations are supplying from the external providers gives some of the useful insights of this. Due to the quantitative nature and the scale of the studies only the partial and the superficial picture has been provided by it. How the organizations are taking the decisions on why the particular human resource activities are to be outsourced is remaining not clear along with whether they truly constitute the noncore activities of the firm.

 It has been found by  the Hewitt Associates by the survey conducted by them that about the 94% of 129 companies have polled the outsource at one human resource activity and the respondents have expected to expand the outsourcing over its customary limits of payroll and health and welfare benefits. Global mobility, headhunting, and the recruiting are the new areas that are expected to be included. The human resource technology support, performance management, and the staff learning and development are the other areas that the employers are liking to considered and this have been noted by the Bryan Doyle, the president of the Hewitt’s Human resource outsourcing Business.

The effectiveness of these outsourcing activities is also unclear of how and whether they can be evaluated. In order to make the consistent human resource functions the in house and the outsource human resource activities by the client firms and the outsourcing provider. To analyze the recent ways in the human resource outsourcing is one of the ways to understand these relationships.

To discharge the in-house human resource team for the more strategic role number of the firms has been outsourcing the usual administrative human resource activities. Beyond this the outsource of the entire package is selected by the minority of the others along with the design of the human resource systems which are most probably have the primary effect on the organizational culture and performance (Klass, McClendon & Gainey). A number of questions have been appeared by the raise of this way.

As an example what are the human resource activities that should be outsourced? The role of the in-house human resource is affected by the human resource outsourcing and also the rest of the workforce, how? What are the drawbacks for the human resource function? From the last decade on wards the human resource outsourcing has been increased significantly and this has been the proof from the professional and the practitioner publications (Woodall, Gourlay & Short). How the decisions of the outsourcing are made, how the decisions are implemented, and how the effectiveness of the outsourcing is calculated are the ones that have been investigated by the some of the few academic researchers mainly. For the importance and the role of the human resource function and for different groups in the work force the researchers have also made the investigations.

This shortage of the research is in sharp due to the difference in the growing prescriptive literature on the financial and the strategic reasons how the organizations should outsource (Rubery, Earnshaw, Marchington, Cooke & Vincent) and how to go about it (e.g. Cook, 1999; Rippin). On the effect of the outsourcing of the employees there is shortage of the research to make the perfect statements as noted by the Purcell (1996, p. 22). The things that are clearly missing in the research is the insiders viewpoint – the employee voice on the contact of the outsourcing on the employment relations (Kessler, Coyle-Shapiro, & Purcell, 1999, p. 6).

At present the companies understand there a limitation of their early efforts in the short term is an effort to renegotiate the outsourcing contract. What should be fixed in the merchant relationship is the thing that is present to them in the clearer view. In the western European companies to outsource the contract renegotiation there is a way according to the research of the Gartner. For the more elastic outsourcing relationships there are the pressures from the clients who are forcing the vendors.

Within the 12 months only 15% of all the contracts have been renegotiated. The investigation 2007 that is available from the Bureau of National Affairs (BNA), U.S.A. and also the study on the human resource department Benchmarks have reported that about 72% of the investigated employees are supplying at least one of the human resource activity. 

The outsourcing is the process in which the work is been completed by the individuals for the different types of companies who are not the full time employees of that particular organization or the company. In the current market the outsourcing is playing the vital role and for this reason most of the organizations are using the outsourcing process for different types of reasons related to the organization. The business analysts proposed that most of the companies and the organizations are specifying that cost reduction process is the major reason for the purpose of HR outsourcing process.

In order to maintain the crisis of the economical standard most of the organizations are showing interest towards HR outsourcing process. But most of the business analysts are arguing that there is a rapid decrease of the HR related jobs because of outsourcing the HR’s. On the other hand some of them say that by carrying the HR outsource process the individuals will be able to manage the entire challenges related to the workforce.

As a result most of the companies are trying to decrease their employee numbers based on their payroll and for this reason the outsourcing of the manpower is happened to be slow down within the marketplace. Now a day’s not only the public and private organization but the government organizations are even planning to use of process of HR process. The different types of the HR services are considered as the key aspects within the development of the outsourcing process. Along with the success factors of the organization such as the strategic planning, the core competitors, the decision making process as well as the customer satisfaction the organization are even considering the HR outsourcing as the important and major aspect to their organization.

The different types of the responsibilities of the outsourced HR is the administration process, the background verification, the recruiting as well as the training process, managing the employees and team members and working with them and making them to work to achieve the common aims and goals of the organization. Most of the companies and the organizations are considering the HR function as the major essential success factor for the business.

Research Methods:

There are many methods for data collection. Data collection in qualitative research method is basically divided into two different categories and they are Primary data and secondary data.

Primary data:

1. Interview process: It can be semi structured or structured interviews.
2. Conducting Surveys using either structure or unstructured questionnaire.
3. Group discussions.

Secondary data:

Secondary data is that data which have already been gathered for some kind of other purpose, possibly processed or subsequently stored up (Saunders, et al 2007).

1. Analysis of different kinds of data and literature.

2. Data management and analysis methods.

3. Basic information about the company such as annual budget report, policies, company journals and growth report.

In this research, the primary data used is conducting surveys where HR professionals from different companies are going to be participated. They will be given a questionnaire which is mainly prepared to get the most accurate answers from participants about outsourcing HR administration. Type of questionnaire which is going to be used to conduct surveys is unstructured. Unstructured questionnaire mainly consists of different type of questions from choose the option to giving comment. The main objective of using this type of questionnaire is to get clear idea about further research. Based upon these responses I am going to give the conclusions.

 Main sources of secondary data in this study is different kinds of literature available in the town that can be journals, research papers, books, magazines, statistics of the companies etc. clear evaluation of these secondary sources will be done based upon this literature I support my research results from primary data. Secondary data mainly helps researchers to gain more details about the topic.  Type of secondary data used for this research is mainly related to the topics like human resource, human resource management, outsourcing and outsourcing HR administration activities. Research methodology used here is qualitative. 

Ethical Issues in Research:

For any good research there are basically some ethical issues related to them. Research ethics is all about how the researches clearly explain topic of research, data collection methods and how far the results and reports of this research are moral and responsible in nature. Research ethics is mainly concern with the fairness of the researcher attitude in relation to the right of the research work. Process of data collection and protection policies needs to be considered by researchers(Saunders etal,2009).The Qualitative research methodology have large number of issues to be considered compare to qualitative methodology. Some of the ethical issues which should be considered in qualitative methodology and they are

1. Participants of the research are voluntary and have full right of withdraw from the research at any time.
2. The information of the individuals who participated in the research kept secret and information used only for the academic purpose.
3. Participants given full protection during the research process.
4. Intellectual property right given a most preference in the research. 

Timetable for research:

Conclusion:

In this research proposal all the activities which are going to be done for this research project briefly described. In This proposal I have clearly explained different   aspects of HR administration outsourcing. 

Research Paradigm:

There are huge number of research done on HR field so there is large number of information is already available for the fresh researchers.

Saunders and others stated Research paradigm as “the process of examining the research paradigm by which those topics can be clearly understand and explain.”. The research paradigm is going to helpful for the researchers in order to gain good knowledge about particular topic.

Mainly there are two different types of research paradigms available which are going to back the different research strategies and methods used by researchers and they are

1. Positivism paradigm

2. Interpretative paradigm

Research Methodology:

Research is a fundamental part of educational, ”research is a methodical study of objects as well as sources etc. with the aim of establishing facts and arrive at new conclusions”(Oxford Concise Dictionary). The method through that a research is carried out or written is very imperative as it has a vast impact upon the conclusions arrived at the ending part of the research.

In order to decide research methodology used in the research we should select one approach between deductive and inductive approaches. Research methodology which is selected should fulfill the primary aims as well as the objectives of this research.

Deductive approach:

 The Deductive approach structures the theory based upon the rigorous survey. This approach is mainly concentrates on building a theory after completion of literature review process. 

Inductive approach:

Inductive approach states that the social phenomena can only be observe and explained through experiment and observations. Inductive approach mainly concentrates on data collection and making the conclusions based upon the results of data analysis.

In this research Inductive approach is the best method where research is mainly based upon the results of data analysis. In achieving our research objectives I am conducting surveys which include different HR professionals from around the world. This data will be used to come to a conclusion on research which satisfies our primary objectives of the research. Type of questionnaire given to the HR professionals is unstructured.

 Basically there are two different approaches in surveys one is structured and another is unstructured surveys. The main different between both the surveys are structure surveys consists only  of the same type of questions that either choose an option or give comment where as unstructured survey is the combination of different type of questions that is it contains some choose the option questions and some other giving the comment questions. So based upon the research objectives we have to prepare questionnaire very carefully.

Professor Ed Lawler who is professor of business at the Marshall School of Business at the University of California at Los Angeles stated outsourcing HR administration as  “. “Most midsize companies don’t have competency in the administrative and transactional activities that go on in HR”.

HR administration is of no use if it not enhances the organizations operational capability and it looks non value adding department of the company which is of no benefit. So HR administration required really skilled, hardworking, intelligent people who can really make the difference to the organization in a positive context.

Now new trend in global market is outsourcing which is mainly done by the companies either to enhance the performance of one particular service and decrease the workload of the employees or to reduce the operational cost of the organizations. Most or the organizations in HR administration wants to transfer non-core activities to the specialist service provide companies .This new trend is shifting HR administration is from being tactical towards strategic.

Organizations opt for Outsourcing mainly because of  either to enhance the operational capability of the organization by allowing employees to focus on core activities or to cut the unnecessary costs.