Do you think outsourcing HR activities is gaining momentum these days? what is your experience and knowledge of outsourcing? What are the advantages and disadvantages? What are the HR activities can be outsourced?

Agree with MR Fazlur Rahman and MR Tarig

The whole issue of HR outsourcing will depend on the type of organization and their functions. Generally, HR activities includes the following activities

A.    Human Resources Planning

B.    Preparation of Job description and Job Specification

C.     Recruitment

D.    Placement and on boarding

E.     Training and Career Development

F.     Management of HR records 

Outsourcing could be done for “Recruitment” which includes advertising, screening of applications, shortlisting, written testing, group assessment, Interviewing and finally presenting  the best three or four candidates to the prospective employer. No doubt, the recruitment is a big job but still the organization has a final say. The other issues as above are still in the hands of “HR department of the organization” in traditional organization. 

For some organizations, which have a lot of blue color jobs like security guards, cleaners and messengers, probably they could outsource the full HR function related to this segment of workforce. 

However, the office based positions and managerial positions may remain in the hands of HR department of the organization. 

Another important issues is that with introduction of HR module in ERP, the field based or zonal based HR personnel could be reduced to a great extent and Head Office HR personnel could manage effectively with ERP module

For many businesses, the various functions of the HR department are too comprehensive and complex to maintain in-house. Businesses that outsource HR functions receive several advantages that support the company's bottom line Risk Management Cost Savings Efficiency Employee Development

Reducing the operation expensis

What is 'Outsourcing' Outsourcing is a practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally. Outsourcing is an effective cost-saving strategy when used properly. It is sometimes more affordable to purchase a good from companies with than it is to produce the good internally. BREAKING DOWN 'Outsourcing' An example of a manufacturing company outsourcing is Dell buying some of its computer components from another manufacturer to save on production costs. Alternatively, businesses may decide to outsource bookkeeping duties to independent accounting firms, as it may be cheaper than retaining an in-house accountant. In addition to cost savings, companies can employ an outsourcing strategy to focus on core aspects of a business. Outsourcing noncore activities can improve efficiency, streamlining and productivity because another entity performs these smaller tasks better than the firm itself. This strategy may also lead to faster turnaround times, increased competitiveness within an industry and the cutting of overall operational costs. Businesses can reduce labor costs significantly by outsourcing certain tasks, while companies may simultaneously have access to technology without investing large amounts of money to own the technology. Many businesses find outsourcing the functions of human resources, such as payroll and health insurance, saves enormous amounts of time, effort and energy. HR is one of the noncore functions of a firm; other companies may have experts to help with this aspect of human capital. As many as 16% of companies outsource some kind of task that deals directly with human resources. Disadvantages Outsourcing also has several disadvantages. Signing contracts with other companies may take time and extra effort from a firm's legal team. Security threats occur if another party has access to a company's confidential information and then the party suffers a data breach. A lack of communication between the company and the outsourced provider may occur, which could delay the completion of projects. Statistics and Surveys Companies typically save around 15% due to cost reductions brought about from outsourcing. A 2014 study from Datamark, Inc. claims one client saved 31% over one year when outsourcing one aspect of its business process. Over three years, the cost savings rose to 33%

When you outsource any task or service, it will only mean you are incapable of doing it. So, this is a gap or something lacking on you or your business but may not be a mistake and therefore, understood may not be your fault.

To my experience, recruitment can be outsourced since this is very time consuming in reading all thousand CVs or applicants without a system. So, in order to save time and start calling candidate, some companies outsource this type of task and pay private head hunters or company who can supply manpower need.

"You’re not where you work and your work is not you."

Howard Behar

 

Outsourcing is easy to be replicated by the competition; it leads to fragmentation and disintegration of the supply chain, inviting new competitors into the industry. It also nurtures corporate complacency; and it undermines a company’s relations with its labor, customers, and the domestic and local communities.

 

Top 6 Outsourcing Disadvantages Reasons That Outsourcing is Bad for Your Company

1.  Loss Of Managerial Control

When you sign a contract to have another company perform the function of an entire department or single task, you are turning the management and control of that function over to another company. You will have a contract, but the managerial control will belong to another company. Your outsourcing company will not be driven by the same standards and mission that drives your company. They will be driven to make a profit from the services that they are providing to you and other businesses like yours.

 

2.  Hidden Costs

You will sign a contract with the outsourcing company that will cover the details of the service that they will be providing. Anything not covered in the contract will be the basis for you to pay additional charges. Additionally, you will experience legal fees to retain a lawyer to review the contacts you will sign. Remember, this is outsourcing company business. They have done this before and they are the ones that write the contract. Therefore, you will be at a disadvantage when negotiations start.

 

3.  Threat to Security and Confidentiality

The life-blood of any business is the information that keeps it running. If you have payroll, medical records or any other confidential information that will be transmitted to the outsourcing company, there is a risk that the confidentiality may be compromised. If the outsourced function involves sharing proprietary company data or knowledge (e.g. product drawings, formulas, etc.), this must be taken into account. Evaluate the outsourcing company carefully to make sure your data is protected and the contract has a penalty clause if an incident occurs.

 

4.  Quality Problems

The outsourcing company will be motivated by profit. Since the contract will fix the price, the only way for them to increase profit will be to decrease expenses. As long as they meet the conditions of the contract, you will pay. In addition, you will lose the ability to rapidly respond to changes in the business environment. The contract will be very specific and you will pay extra for changes.

 

5.  Tied to the Financial Well-Being of Another Company

Since you will be turning over part of the operations of your business to another company, you will now be tied to the financial well-being of that company. It wouldn't be the first time that an outsourcing company could go bankrupt and leave you holding-the-bag.

 

6.  Bad Publicity and Ill-Will

The word "outsourcing" brings to mind different things to different people. If you live in a community that has an outsourcing company and they employ your friends and neighbors, outsourcing is good. If your friends and neighbors lost their jobs because they were shipped across the state, across the country or across the world, outsourcing will bring bad publicity. If you outsource part of your operations, morale may suffer in the remaining work force.

Thanks

I am sorry dear , i have not enough experience in HR field , i will wait with you for more answers

Thanks for the invite ............................ waiting for an answer from the experts in order to get useful information

Thanks for invitation

 

I am apologies to answer this question because it's not my specialist field

A great answer is already given by the experts.Thanks