Human Resource Functions and Outsourcing
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1. What factors should be considered when making the outsourcing decision?
2. What specific human resource activities are appropriate for outsourcing? Why?
3. What types of activities should not be outsourced? Why? Provide specific examples.
references and 4 to 5 paragraphs
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Solution Summary
The solution identifies company activities that can be outsourced.
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1. What factors should be considered when making the outsourcing decision?
The major decision factor in outsourcing decision is savings and cost reduction. Batta (2012) suggested the following factors:
a. Absence of specialists or experts. Outsourcing is a clever alternative to hiring. Looking for experts in the field takes time and is costly starting with the costs involved in advertising the vacancy, assembling the personnel that will conduct the interview, and training the newly- hired personnel.
b. Irregular demand for personnel. There are periods that businesses experiences peak demand. This requires additional personnel and human labor. Usually, the logical thing is to hire additional personnel and fire them after peak season subsided. This has created labor unrest as the disgruntled workers would conduct public demonstration/rally charging the company of unfair labor practices. To avoid this problem, the company can simply outsource the job.
c. High risk factor: Usually companies involved in high risk industries prefer to insure their risk by handing over the job to an offshore vendor who has advanced expertise in the subject.
d. Emphasis on perfect processes: The key strength of the vendors who take up the outsourcing projects is their ability to standardize their internal processes.
e. Savings in management time. It is usually cheaper to outsource than creating a department and hiring personnel.
f. Achieving and maintaining objectivity: Over time, the workers of a company become inert and ...
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