Human Resource Management (HRM) can be defined as an organizational function, which is responsible for managing people, who work in the organization and contribute both individually and collectively to the achievement of organizational objectives. HRM evolution transformed the traditional role of the function from mere book-keeping to a strategic activity, which contributes to the success of the company (Rowley & Jackson, 2011). As outsourcing starts playing more and more significant role in the modern business, HR outsourcing follows this business trend. Its primary objective is to acquire and retain employees overseas, who would match organizational requirement, possess necessary skills and share company’s vision. HR managers should also consider the cost savings associated with HR outsourcing, the potential benefits of this activity and the possible complications, including legal issues.
WHY?
Strategic importance of HRM in the modern world creates the urgency to align business and human resource strategies, in order to achieve a strategic fit, which would help to direct employee efforts into pursuing company goals into contributing into future development of the organization. Therefore, contemporary trends in the business environment should always find their reflection in the HR policies. Thus, the world today is characterized by a high degree of business integration, specialization and globalization. Business activities are no longer organised based on geographic proximity, but on the efficiency and cost considerations. Therefore, careful investigation of the HR outsourcing practices gives an important insight into one of the significant HRM trend, which is likely to define business and human resource development in the future. The benefits of HR outsourcing include cost-reduction, increase in customer satisfaction and acquisition of valuable expertise, which is essential for company’s competitiveness in the marketplace. However, outsourcing also possesses a number of drawbacks, such as the loss of control, high transaction costs and potential decease in service level for the customers. Careful consideration of all the positive and negative sides of HR outsourcing can help to derive a strategy, which would ensure company’s competitiveness in the long-run and contribute to the overall strategic objectives.
Thus, being aware of the current outsourcing patterns, its potential benefits and associated costs, as well as of the tools used in global HRM, is essential for successful HR policy definition, which would contribute to the overall development of the organization.
HOW?
An exploration of HR outsourcing should start with careful consideration of outsourcing as a general business trend and an important strategic orientation. Insighst into this topic can be provided by the general literature related to outsourcing, such as “Strategic outsourcing: a structured approach to outsourcing decisions and Initiatives” by M. F. Greaver (Greaver, 1999).
In the next step research should be narrowed down to the HR outsourcing concept and to the exploration of its general meaning in the modern world, its most important trends and potential advantages and disadvantages. This information can be found in the literature related to HR practices, such as “Human Resources Management: The Key Concepts” by C. Rowley and K. Jackson, which provides a general but comprehensive overview of the HR outsourcing concept (Rowley & Jackson, 2011).
Lastly, the research should explore the most recent developments in the HR Outsourcing practices by investigating research papers on this topic. Thus, an article “Making the HR Outsourcing Decision” by P. Adler outlines the most important factors, which should be considered when making an outsourcing decision (Adler, 2003).
References
Adler, P. S. (2003). Making the hr outsourcing decision. MIT Sloan Management review,
45(1). Retrieved from http://ssrn.com/abstract=979047
Greaver, M. F. (1999). Strategic outsourcing: a structured approach to outsourcing decisions
and initiatives. New York, NY: AMACOM.
Rowley, C., & Jackson, K. (2011). Human resources management: the key concepts. New
York, NY: Routledge.
