HUMAN RESOURCE

OUTSOURCING
Introduction
A HR Department is a critical component of
employee well being in any business, no matter how
small. HR responsibilities include payroll, benefits,
hiring, firing and keeping up to date with state and
federal tax laws .
OUTSOURCING
• Outsourcing means hiring someone outside the
company to perform tasks that could be done
internally.
• Companies often hire the services of accounting
firms , for ex; to take care of financial services. They
may hire advertising firms ,software firms, law firms.
• Interests in outsourcing has been spurred by
executives who want to focus their organizations
activities on what they do best- their core
competencies.
 HR Outsourcing
Increasingly activities such as maintenance,security, catering
and payroll are being outsourced in order to increase the
organizations flexibility, lower its overhead costs and gain
access to expertise that others may have.
Today HR Outsourcing goes beyond handling payroll and
benefits deciding which HR functions to offlode and which firm
to outsource can be quite a challenge.
What is HR Outsourcing ?
HR Outsourcing generally falls into 4 categories:
• PEO’s
• BPO’s
• ASP’s
• E-Services
PEO’s : A professional employer organization takes full
responsibilities of the companies HR Administration. It
becomes the co employer of the concerned companies
workers by taking full legal responsibilities of their
employees.
BPO’s : A BPO differentiates itself by either putting in a
new Technology or applying existing technology in a new
way to improve a process
ASP’s : Application Service Provider host software on the
web and rent it to the users
E-Services : are those HR Services that are web based. Both
BPO’s and ASP’s are often referred to as e-Services.
 How To Price ?
There are no clear cut price ranges with HR Outsourcing. The
fees range greatly between services as well as within the
services. Aspects like number of employees, the options they
choose to use and even geography will effect the overall cost.
PEO’s will charge 4% to 8% of each employees pre tax
salary per month.
ASP’s and e-Services, will charge $ 75 to $130 per employee
per month.
WHO’s WHO ?
 Why Outsource ?
Outsourcing HR can help in following ways:
• Increase HR program alignment with business objectives
• Reduce staff and operating costs, while maintaining and
even improving services.
• Reduce the risks for potential non compliance with new
laws and regulations
Outsourcing v/s Offshoring
 What to look in for a vendor ?
• A partner who will help the organization establish to meet
strategic goals.
• A company that can provide the full range of outsourcing
services.
• A provider who understands the differences between a
“shallow “ and “deep” outsourcing applications.
• A scalable,flexible outsourcing model.
What can an organization get ?
An Organization gets services include :
• Pay roll administration
• Employee benefits
• HRM
• Risk Management
Should organization consider
outsourcing ?
• If the organization have fewer than 100 employees then
outsourcing should be considered.
• HR functions must be handled correctly as closed to 100%
of the time as possible, sliptrips can cause business major
problems
• PEO is considered when the organization have at least 12
employees. If the organization even smaller , online services
are the way to go.
• Whatever the organization decide, it should make sure to
keep their employees in the loop, then they’ll appreciate
knowing that there are seeking the most affordable solution
for the business while doing their best to meet the employee
needs
Advantages:
• A big reason businesses turn to HR Services is that they
don’t have the time, or expertise, to deal with federal and
state employment laws.
• Save money.
• Save Time.
 Disadvantages :
• When an organization uses a PEO , giving up the right to hire
and fire their employees may not be desirable to their particular
business.
• If they decide to use E-service, the same issues they would
have with any ASP remain. When everything is stored and
handled online, there are concerns about security as well as
potential crashes, both of which can cause problems to their
business.
• Common complaints
Examples:
 Advanced Software Systems Inc. India -
Cochin, Kerala
 Alphabetics Technologies India -
Mumbai, Maharashtra
 Aura Tech India - Mumbai, Maharashtra
 Avedis Network Solutions Pvt Ltd. India
- New Delhi
 B.D. Electrocom (P) Ltd. India, Delhi
•BicneT India - Mumbai, Maharashtra
•Cistems India - Siliguri, Westbengal
•Creative Global Services Pvt Ltd India - New Mumbai,
Maharashtra

•Cybosys Solutions (P) Ltd India - Bombay, Maharashtra

•Devan Technologies India - Bangalore, Karnataka
•Einsoft Solution India - Chennai
•InScript India - Ahmedabad, Gujarat