HR outsourcing - it’s Pro’s and Con’s
HR outsourcing is the emerging trend of Indian market. Organisations adapt to HR outsourcing for several reasons. It increases efficiency by concentrating on important issues. It increases the flexibility of business to meet the dynamic business situations. It increases the value of customer, product, services and shares. It brings about an organization wide transformation.
HR outsourcing brings about financial advantages for a firm also. It frees up the resources by reducing the investments in assets. Furthur it generates additional capital by transffering the assets to the provider.
HR outsourcing bring about revenue driven modification in an organization too. it helps an organisation to gain market access & business opportunities via the providers network. it taps the providers capacity, process & systems and accelrates expansion. it expands the production and sales of a business at times of financial crushes. it exploits the existing skills of an organisation commercially to derive benfits from same.
HR outsourcing contributes towards cost management also. it converts fixed costs into variable costs. moreover, reduces costs through superior provider performance & its low cost structure.
It increases employee commitment and energy in non-core areas. also provides them a stronger career path.
There are several points that must be considered once you decide to implement HR outsourcing in your organisation. One must develop a vision regarding what is to be achieved by outsourcing. knowing the scope of activities that are to be outsourced is also essential. only the execution of function is outsourced not its responsibility. avoid to be driven by cost saving solely. never outsource management functions related to customers, strategy and finance. however, one must always keep in mind that outsourcing is not a solution to all the problems.
HR outsourcing has its own disadvantages for every organisation that must be considered before trying to implement the same. it modifies the support functions of an organisation thereby affecting its robustness. it requires a lot of coordination with the agency. it reduces the learning ability of an organisation. the integration capacity of an organisation is also affected. an organisation has to compromise its control over the outsourced processes. it increases the insecurity among employees that whether the staff remains within organisation or an agency is appointed. the disappearing jobs reduce the motivation & morale of the employees.