Scope and Opportunity of Hr Outsourcing
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Scope and Opportunity of HR Outsourcing
“The staff of HR has come to realize that what we did and knew yesterday is only part of what we need for tomorrow. ”
The function of HR has witnessed proposition and implementation of numerous concepts, models and developmental practices which has led to its growth. The last decade has seen significant shifts in the HR paradigm. One of the very important trends has been the growth of human resource outsourcing (HRO). HRO is a process in which a company uses the services of a third party to take care of its HR functions. Rapidly changing market dynamics and global competitive pressures have caused organizations to spend more time focusing on their core business and assign the rest of the task to an external body which can carry it out in a more efficient and cost-effective manner. As a result, HRO is becoming increasingly prevalent. Some HRO firms are generalists, offering a wide variety of services, while others
are specialists, focusing on specific areas such as payroll or recruiting. Depending on the size of business and how much control needs to be maintained over HR functions, companies can either outsource all HR tasks or contract for certain services. Typically, HR outsourcing can be classified into two broad categories such as transaction and administration outsourcing and HR consultancy. While transaction and administration outsourcing deals with the day-to-day and month-to-month activities like payroll management, employees benefits management, and pension management, HR consultancy is a much more complex process that constitutes management of strategy and policy functions of the organization. Transaction and administration outsourcing form the low-end of the value chain of an organization.
In the beginning HRO was mostly about cost savings further it was about using others investments in technology as leverage and later viewed as a means to improve productivity and performance by
Hr Outsource
WHAT IS OUTSOURCING
The outsourcing history of India is one of phenomenal growth in a very short span of time.
The idea of outsourcing has its roots in the competitive advantage theory propagated by Adam Smith in his book The Wealth of Nations which was published in 1776. Over the years, the meaning of the term outsourcing has undergone a sea-change. What started off as the shifting of manufacturing to countries providing cheap labour during the Industrial Revolution, has taken on a new connotation in todays scenario. In a world where IT has become the backbone of businesses worldwide, outsourcing is the process through which one company hands over part of its