| This is a question that many organizations undergoing | | | | executives in large North-American and European |
| structural changes attempt to answer in the present | | | | firms currently outsource more than one HR function. |
| business environment. Outsourcing functions such as | | | | The explosive industrial growth witnessed all over the |
| production and developing software are perceived as | | | | world was also responsible for the evolution of 'out of |
| "must-haves" for fast paced business plans. But HR, | | | | the box' thinking in management practices. Across |
| which has always been the heart of an establishment, | | | | business schools and boardrooms, the Human |
| is gradually opening up to outsourcing."The HRO | | | | Resource function is recognized as a component that |
| [Human Resources Outsourcing] market is set to grow | | | | can yield competitive advantages, especially in |
| to $3 trillion over the next five years, and just over a | | | | information and knowledge sectors. It is seen as a tool |
| third of HRO potential has been currently delivered," | | | | to attract and retain talent, build workforce capabilities, |
| reported Dr. Anthony Hesketh, CRF (Corporate | | | | encourage leadership, develop successive |
| Research Forum) Project Researcher. | | | | management pipelines as well as handle grievances. |
| The phenomenal growth of the outsourcing industry in | | | | With high attrition rates plaguing most people-intensive |
| the current business environment is an outcome of the | | | | industries, an active and vibrant HR can catapult its |
| breakneck speed of competition among organizations. | | | | organization into the "most coveted organization to |
| Most companies believe that an absolute focus on its | | | | work with" ambit. |
| core functions and goals could leverage its overall | | | | From the organizational point of view, outsourcing this |
| performance. Of course, this is possible only when | | | | complex and specialized function needs to be handled |
| outsourcing partners can satisfactorily deliver routine | | | | carefully. Experts believe that HR functions need to be |
| and affiliate tasks and processes. Earlier, with the | | | | broken down and classified into those which can be |
| expansion of the industrial sector, several businesses | | | | outsourced and those which cannot. For example, |
| commissioned 'job work' to local, smaller outfits | | | | placement firms play a vital role in attracting talent, but |
| especially where logistics and manufacturing were | | | | final selection and induction of a candidate cannot be |
| concerned. However, when it came to HR functions, it | | | | outsourced since it involves direct and complete |
| was by and large left to the administrative department. | | | | involvement of the core team to be able to work |
| On the other hand, big multinationals and diversified | | | | together. However, other functions like payroll |
| firms which had to manage a large number of | | | | management, training and skill development, and even |
| employees at multiple locations and different levels in | | | | conducting performance appraisals in coordination with |
| the hierarchy needed to set up a separate HR | | | | the organization can lessen the workload considerably. |
| department. With the emergence of the internet and | | | | However, some espouse a contrary view. Unilever, an |
| better communication technologies, the business | | | | Indian company that broke out from the standard mold, |
| environment underwent rapid changes. Today, | | | | decided in 2006 to outsource most of its HR functions |
| offshore service providers find it worth their while to | | | | to Accenture. Viewed by many skeptics as a |
| upgrade skills and move up the value chain to be able | | | | foolhardy decision, its full impact is yet to be seen. One |
| to deliver specialized services requiring managerial | | | | factor that may affect companies adversely were |
| capabilities. Ongoing surveys reveal a major paradigm | | | | such a move popularized, is the loss of HR practices |
| shift towards outsourcing strategic functions. Since the | | | | as a key differentiator. It may even affect employee |
| beginning of this century, Human Resource | | | | morale and commitment as the sense of belonging in |
| Management, perceived as an integral part of an | | | | being associated with a particular brand or company |
| organizations strategic profile, has attracted many | | | | may be lost. In the long run, in spite of savings in HR |
| outsourcing partners. | | | | budgets, outsourcing this very integral function may not |
| At present, pension/benefits, stock options, health | | | | be received very well by the very workforce for |
| benefits, and payroll are among the most popular HR | | | | whom it exists. For many, an absolute solution for this |
| programs being outsourced partially or completely. | | | | dilemma is yet to be found. Until then, the debate goes |
| According to a survey by The Conference Board and | | | | on. |
| sponsored by Accenture, more than three-fourths of | | | | |