Assessed Essay: Human Resource Outsourcing

Assessed Essay: Human Resource Outsourcing

What Reasons Do a) Current Research And b) The HRO Industry Offer In Favor Of And /Against The Practice Of Human Resource Outsourcing?

Name: Wu Yue

ID:  200922741

Date: 11/05/2015

Academic Writing Tutor: Cheryl Greenlay

Word counts: 1051 words

CONTENT

Introduction                                                                                

The Trend of Human Resource Outsourcing………………………….        1

Argument for human resource outsourcing………………..2

Financial….……….…………….………………………………………2

Quality of Service Improvement………………………………….…….3

Time Saving………………………………………….………………….3

Conclusion..................................................................................….....4

References……………………………...………………………….…5

What reasons  do current  research  and  the  HRO industry offer  in  favour  of  and  against  the  practice  of  human resource outsourcing?  

Introduction

Globalization is changing the way how company works and thinks. Along with globalization comes a huge trend which called outsourcing. Outsourcing is a company make contract with outside suppliers in order to let in-house staff focus on their core business and reduce cost. For a long time ago, service outsourcing is not new. However, why outsourcing is different in this day is the scale (Belcourt, 2006). Outsourcing has become a power to reshaping human resource management. It is not only for cleaning, but also for everything such as administration, function of human resource. Berg (2010) said,” I don’t believe an HR department needs to be in an organization.” （BIZBoxTV,2010）It might be difficult to define whether outsourcing could replace the real human resource department. Businesses has recognized that the advantages of outsourcing is cost saving, quality of service improvement, and time saving. However, lack of academic articles figure out the downsides of outsourcing which would cause problems and risks for businesses as well.

Argument for Outsourcing

Financial

Business believes that outsourcing could reduce their cost .They apply cheaper labor from outside to replace the in-house staff in order to reduce headcount. Over working time for in-house staff are reduced as well .Therefore operation costs such as the cost of gas, electricity, and water could also cut down at the same time. In addition, recruitment and training cost, administration expenses will also less than before (Cooke et al, 2005).

Nevertheless, Belcourt (2006) argues that the actual cost reduced of some companies is not significant. Because wrong people doing the routine task which bring more cost spending finally. At the end, the actual cost higher than what they expect and the result leads to redo the work or ask for an extension. Kosnik et al (2006) points out that the company’s manager should be trained to make right decision and make right contract with vendors. In addition, making good relationship with vendor is quite important as well. The cost whether reduced or gained is not hard absolutes. The service business which called Professional Employer Organization (PEO) focus on administration for small to medium business, they indicate that PEO could not always make sure the cost could be reduced since the business planning is always changing according to the situation (Uhyadvisors, 2007).

Quality of Performance

Small business struggle to find technical talent or specialized staff in specific fields. Outsourcing could bring these types of employees into companies much more easily. Belcourt (2006) suggests that they could improve technical skills in order to deliver efficient service to the guests and the quality of service will be improved in flexibility, response and professional. For example, PEO supports small business for their paper tasks which might avoid a lot of issues from government since small business has no ability and experience to deal with tough tasks (Uhyadvisors, 2007).

Another point to consider is that switching in-house staff to outside vendor could destroy the services instead of getting benefits from it. If vendor becomes a competitor to the business, the business will sustain enormous pressures. The reason is because the in-house staff loss their skills of training, recruiting, technology, leadership that reduces the competitiveness (Cooke et al, 2005). Moreover, they might also loss their motivation, forget company’s value and culture which will affect their service performance (Belcourt, 2006). The quality of vendor is hard to measure. The company could not evaluate each of vendors about their service performance in the first place, but it might be too late to find out later.

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