HR outsourcing is the process of hiring external HR professionals to do the HR work that was previously done internally. The key to HR outsourcing success is to determine which functions to outsource, the extent to which they should be outsourced, and which functions to keep in-house. HR outsourcing focuses primarily on routine, transaction-oriented processes and clerical work. HR outsourcing is done basically in two ways: discrete services and business process outsourcing. A Shared Service Center takes routine activities dispersed throughout the organization and consolidates them in one place. Shared service centers provide an alternative to HR outsourcing and can often provide the same cost savings. The most common HR functions that use SSCs are benefits administration, payroll, recruitment, global training and development, succession planning, and talent retention.
A professional employer organization (PEO) is a company that leases employees to other businesses. When a decision is made to use a PEO, the company releases its employees, who are then hired by the PEO. The PEO then manages the administrative needs associated with employees, pays their salaries, and manages their benefits. The PEO typically charges a fee based on the number of leased employees. Because the PEO is the employees’ legal employer, it has the right to hire, fire, discipline, and reassign an employee. HR as a Strategic Business Partner -HR professionals must understand the company’s business (e.g., sale of medical equipment) must use this knowledge to support competitive advantage ● Recruit and select the most highly qualified individuals ● Manage performance and compensate based on performance that supports competitive advantage ● HR development such as training to ensure that employees are as knowledgeable as possible about their jobs Employees as Human Capital --Capital refers to the factors that enable companies, for example, to generate income, higher economic value, strong positive brand identity, and reputation. There is a variety of capital, including financial capital: -Cash -Capital equipment (for example, state-of-the-art robotics used in manufacturing) -Human capital, as defined by economists, refers to sets of collective skills, knowledge, and ability that employees can apply to create value for their employers Legal Considerations -- Federal, state, and local legislation ● Court decisions ● Presidential executive orders For example, Title VII of the Civil Rights Act of 1964 prohibits illegal discrimination on the basis of race, color, religion, or national origin. Court decisions provide clarification of language in the laws. A presidential executive order (EO) is a directive issued by the president and has the force and effect of a law enacted by Congress because it applies to federal agencies and federal contractors.
- Spring '20
- Civil Rights Act of 1964