| Companies and businesses that either lack time, | | | | to handle recruitments and termination of employees |
| expertise, or both, often outsource human resource | | | | locally. An external organization handling it may not |
| tasks to an outside company. In the past, small | | | | understand the internal requirements of the company. |
| businesses did not have the opportunity to outsource | | | | Outsourcing saves a lot of money as many service |
| functions such as HR, as the market was lacking in | | | | providers are able and willing to perform the tasks at |
| options to do so. However, a comprehensive range of | | | | low costs. Outsourcing enables companies to |
| HR services are available these days to cater to | | | | concentrate on their focal functional areas. However, |
| companies of all sizes, including those with up to 75 | | | | the main disadvantage with outsourcing human |
| employees. Human resources management is one of | | | | resource functions is that there is no personal contact |
| the most widely outsourced businesses in the market. | | | | between the employees and the human resource |
| Until recently, companies used to outsource only payroll | | | | department. This means that the personnel problems |
| and benefits administration to other companies. | | | | of employees cannot be easily addressed or |
| However, it is a relatively new phenomenon to | | | | communicated. Occasionally, outsourcing may also |
| outsource practically all HR activities like business | | | | pose a security threat in terms of breach of sensitive |
| processes and employee management. HR business | | | | employee information. |
| process outsourcing has grown immensely over the | | | | Cost is the deciding factor while selecting an |
| years. Recruitment outsourcing can perform all the | | | | outsourcing service provider for most companies. On |
| recruitment functions like the assessment of | | | | the other hand, some companies place more |
| departmental needs and placement of employees in | | | | importance on the compatibility of work ethics. It is |
| appropriate departments. | | | | advisable to hire outsourcing service providers that |
| Human resource outsourcing has become increasingly | | | | have adequate experience in human resource |
| popular, especially for employee data organization and | | | | functions and the necessary infrastructure and staff to |
| payroll calculation. However, many organizations prefer | | | | carry out the job. |