2. Outsourcing is a strategic decision to give a task or activity to
an independent contractor who determines how best to do the
task or activity.
The firm and the independent contractor become partners and
may establish a long-term relationship.
Examples of outsourced activities: IT, HR, Legal
services, Manufacturing, R & D.
Outsourcing transactions are done in the market.
3. Human resources outsourcing is when a company gets an
outside party to perform some or all of their HR functions.
In the SHRM study, 33 percent of HR professionals who
participated believe their company will increase their use of
outsourcing within the next five years.
6. Three things that managers do (Henry Mintzberg’s Nature of
Manager’s Job)
Interaction (outsource)
Information gathering/processing
(outsource)
Decision-making and problem solving (do
not outsource)
7. The task is a core activity critical to strategy or technology.
Task is highly interdependent with core activity due to
technology or work design.
Task requires great deal of firm specific human capital or
access to proprietary information.
Tasks where the employees work in close proximity to
regular, core employees and are similar socially to them.
8. Determine the best type of relationship.
The properties of the transaction determine the governance
structure:
High asset specificity and uncertainty.
Medium asset specificity.
Low asset specificity.
9. Core HR Outsourcing Services
Payroll Administration
Benefits Administration
Workforce Administration
Leave Administration
Talent Administration HR Outsourcing Services
Relocation and Handling Assignments
Performance Management and Training
Recruiting Administration
Compensation Administration
10.
11. Beyond cost control.
Specialization and expertise.
Focus on quality, technology and service delivery.
Outsourcing to best of class, best of industry.
Problems with technology.
13. Integration with over all strategy.
Fragmented and piecemeal approach.
Absence of formal outsourcing process.
Limited cost analysis.
Work flow, supply chain and logistics management critical to
outsourcing process.
14. a) Trust
b) Confidentiality
c) Dependency
d) Spillover risks
e) Relative proficiency
f) Strategic capability
g) Commitment
h) Flexibility
15. Provides specific knowledge and innovations.
HR outsourcing has become a core part of several organizations.
Source of business for many service providers.