Effects of Outsourcing on Human Resource Management

EFFECTS OF OUTSOURCING ON HUMAN RESOURCE MANAGEMENT
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Effects of Outsourcing on Human Resource Management
The rate, by which competition has increased with respect to globalization, has provided improvements for organizational performance. The HR function impact on organizational effectiveness calls for outsourcing, which is considered to be the core method of any organization in utilize and strengthen its core competence through effective allocation of resources. The value of any strategic activity is a determinant of its capability and source of competitive advantage, as sustainable competitiveness is the outcome of input resources that enhance clear product differentiation (Fill & Visser, 2000). Organizations have now embarked on outsourcing, in an effort to unremitting the need for quality that makes outsourcing to become a norm. It is highly considered when business operations have the tendency to yield greater benefits than internal sourcing. In addition to efficiency gains, efforts are also directed to other activities that are adept at in house (Fill & Visser, 2000). Therefore, outsourcing is a strategy whose outcome is better exploitation of business operation, where strategic approach is portrayed by HR department, not only to focus on monitoring of policies updating, but also as an efficient way for HR department to contribute strategically. The HR function has increased focus in promotion of business strategies and human capital and decrease of operation costs with the aim of meeting the organizational objectives that influence the internal systems affect decisions.
Human resource outsourcing is defined as the transfer of an outside function provider whereby he function was previously performed internally (Halim & Ha, 2010). The importance of outsourcing has the capability of encompassing broad spectrum of activities where the functions of HR are based on external providers. Many of HR functions such as planning and development, training, recruitment, and compensation has driven the HR departments to engage in more strategic functions in an organization (Greer, Youngblood, & Gray, 1999). Although organizations differ in the implementation of these functions, outsourcing has been turned as an aspect of meeting these demands (Woodall, Scott-Jackson, Newham, & Gurney, 2009). The HR functions that have to be outsourced must be viable in enhancing core activities crucial to the organization’s competences. An organization, therefore, has to outsource the core functions that are deemed to be beneficial than when performed internally. The approach of outsourcing in an organization has key variant comprehensive in HRM strategies (Elmuti, 2003).
Outsourcing has enabled firms that are focused on expansion in markets and products to seek for qualified and experienced personnels in various levels of business operation(Halim & Ha, 2010). The expansion strategy focus on area that an organization has no experience, and therefore, there are no specific behaviors that an organization is aware and is a necessity to perform in the area. Organization seeking new products and markets will need to outsource employees who posses high level of cooperation, creative behavior and concern for quality and quantity and a greater degree of risk taking (Cooke, Shen, & McBribe, 2005). The regular change in labor laws enhances employees to remain to date with regulations that affect their performance, and thus, outsourcing enhances HR professionals to keep abreast with these regulations protecting the interest of employees (Gilley & Rasheed, 2000).
The HR strategy on quality conscious is another issue that drives an organization to outsource. These strategies enhance an organization to adopt policies and practices that are geared toward attracting candidate that best fit on the basis of personal rather than technical (Halim & Ha, 2010). This strategy calls for repetitive and predictable behavior whose intermediate focus on the interdependent and concerns for quality and quantity with regard to outputs. The factors that are looked upon are continuous training and development with the aim achieving quality in the production process (Elmuti, Julian, & Dereje, 2010). Outsourcing enhances hiring of flexible and highly adaptive employees to new job assignments and technological changes. Outsourcing has the capability of creating efficiency in the HR system by streamlining important HR functions (Heikila & Cordon, 2002).
Cost efficiency is another factor that calls for an organization to outsource its manpower. The narrow and stable market has major changes in technology and structure. This provides an organization with the option of outsourcing which is predicated by minimal commitment and utilization of skills which deploy the organization more effectively (Lorange & Murphy, 1983). An organization has to outsource some HR function if it perceives that internal recruiting and training is more costly that...