HR Outsourcing – Seven Stages of Outsourcing Process

Implementation of outsourcing takes place in stages. There are seven stages in total that would be discussed in the following article.

Planning Initiatives is the very first stage of the process. The organisation here assesses the associated risks. It then announces the initiative and the project team is formed. Advisors are engaged and the team is trained. Resources are gathered and issues related to resource management, information management and project management are addressed. Now the objectives are set.

The strategic implecations are explored. an organisations vision, competencies, structure , strategy, value chain and transformational tools are understood. then the determination of contract, rights and its termination date takes place. finally the initiative is aligned.

Performance and costs are analysed in third stage. the cost of activity is measured along with the costs that would be incured if the project fails. measurement of performance takes place along with the costs of poor performance. both costs and performance are benchmarked. finally there is a determination of risks, asset values, total costs, pricing models and final targets.

Organisation now is ready to select the providers. they set the qualifying and evaluation criteria. identification of providers takes place that leads to their screening. RPF is drafted and proposals are evaluated based on qualifications & costs. the whole process is performed with diligence. at the end of the stage their is a determination of total costs for buying, short listing of providers & their finalisation. Then everything is reviewed with senior management.

This stage is that of negotiation. negotiations are planned, issues are addressed, term sheets are prepared and contract negotiation takes place. once evrything is carried perfectly a relationship is announced.

Now the transition of resources takes place. the team roles are adjusted and compared with transition plan. transitional issues are than addressed. employees are met and offers or terminations take place. those who are selected are counselled and physically moved to the client location.

Final stage is that of managing the relationships. management styles are adjusted and an oversight council is set up. definition and designing of agenda, schedule and performance reports take place. oversight roles are performed , poor performance is confronted and problems solved. finally a relationship is built.

Author: KPO

4 Responses to “HR Outsourcing – Seven Stages of Outsourcing Process”

  1. Hi,
    Very nice artice and easy to understand. On thing which I want to mention is : This step by step approach is not only used in HR OUTSOURCING ONLY but general outsourcing an project gathering as well whether the project is related to website development, callc enter outsourcing, testing ptrojects or developmewnt project, the approach is almost similar.


  2. Ravi Samuel says:

    I am interested in setting up back office support for HR related activities for companies in US and Europe.

    I am in mental health field now looking for opportunities to move into HR field with a team.

  3. contact center Philippines says:

    Great article! I appreciate how you laid down how outsourcing works. I agree with Vikas, though; these stages are applicable to any type of outsourcing.

  4. Gaurav Sharma says:

    Dear Sirs,
    We are a Chandigarh based Chartered Accountants firm who are very much interested in setting up of a KPO(Knowledge Process Outsourcing ) here. We would like to have complete guidance as to how may we go about setting up of our KPO. Kindly explain or guide in thorough details about this process as well as how and wherefrom to get all the required business? Please reply at either of my emails address given below:

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