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Chapter 13-Outsourcing

Chapter 13-Outsourcing - Chapter 13 Outsourcing...

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Chapter 13: Outsourcing Outsourcing A contractual relationship for the provision of business services by an external provider HRO or HR offshoring: Occurs when outsourcing is done in a foreign country Characteristics of Potential Outsourcing Functions Rule based Repetitive Frequently undertaken Predictable Able to be fully or partly automated with technology Able to be delivered by remote sites Outsourced HR Functions HR functions most likely to be outsourced: Temporary staffing Payroll Training Recruiting Benefits administration Compensation: Payroll Benefits Compensation administration Pension Recruitment and Selection: Advertisements Screening of applications Testing Reference checking Preliminary interviews Executive salary negotiations Exit interviews Outsourced HR Functions Training: Program delivery Program design and development Training consulting Training needs analysis Program evaluation
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Strategic planning Administration Training policies Health and Safety: Employee assistance programs Wellness programs Reasons for Outsourcing Six major reasons: 1. Financial savings 2. Strategic focus 3. Access to advanced technology 4. Improved service levels 5. Access to specialized expertise 6. Organizational politics Financial Savings Cost reduction is typically 10 to 20 percent Economies of scale from specialized outsourcers who are more efficient Cost control Decreased capital commitments Strategic Focus Decision to focus on specific core competencies, like customer service or innovation Core work is transformational and adds value to employees or customers Move secondary functions (or non-core work), like benefits
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