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A PROJECT REPORT ON
HUMAN RESOURCE OUTSOURCING
SUBMITTED BY ANISH NAGWEKAR
M.COM (SEM. I): HUMAN RESOURCE MANAGEMENT
SUBMITTED TO UNIVERSITY OF MUMBAI 2012-2013 PROJECT GUIDE Prof. _________________
R. A PODAR COLLEGE OF COMMERCE AND ECONOMICS MATUNGA, MUMBAI-400 019.
This is to certify that Mr/Ms. _ANISH NAGWEKAR_of M.Com Business
Management Semester I (2012-2013) has successfully completed the project on HUMAN RESOURCE OUTSOURCING under the guidance of
Dr. (Mrs) Vinita Pimpale
Dr.(Mrs) Shobana Vasudevan
Project Guide/Internal Examiner Prof. ____________________________ External Examiner Prof. ____________________________
Seal of the College
I acknowledge the valuable assistance provided by S. P Mandali’s Podar College of Commerce & Economics.
I specially thank the Principal Dr.(Mrs) Shobana Vasudevan for allowing us to use the facilities such as Library, Computer Laboratory, internet etc. I sincerely thank the M.Com Co-ordinator Dr. (Mrs) Vinita Pimpale for
guiding us in the right direction to prepare the project. I thank my guide Prof. ___________ valuable time, knowledge and guidance successfully in time. who has given his/her to complete the project
My family and peers were great source of inspiration throughout my project, their support is deeply acknowledged.
Signature of the student
Signature of the student .DECLARATION I. PODAR COLLEGE OF COMMERCE & ECONOMICS of M. The information submitted is true and original to the best of my knowledge. ANISH NAGWEKAR of R.Com SEMESTER I. hereby declare that I have completed the project ‘RESEARCH PROJECT ON HUMAN RESOURCE OUTSOURCING’ in the academic year 2012-2013. A.
RESEARCH PROJECT ON HUMAN RESOURCE OUTSOURCING .
A Look Ahead: A Future View of Human Resource Outsourcing 10. Conclusion 12. Objective of the research 3. Research Methodology 6. Scope/Utility of the research 5.INDEX 1. Key Research Terms 9. Introduction 2. Key Findings 8. Limitations 7. BIBLOGRAPHY . Executive summary 11. Literature review 4.
In making the determination that a business has more to gain by having certa "noncore" aspects of the business outsourced to a third-party service provider. • Services are improved • Overheads are reduced • Many processes are automated . the organization transfers responsibility for one or more activities or functions that would normally be performed in-house to a qualified vendor. It challenges management to build a more flexible organization centred on the core competencies of the business. but also combines them with the ownership and management of processes on behalf of management by an outside vendor. Typically. Business process outsourcing (BPO) is based on the principles of reengineering.activities are outsourced. HR outsourcing (HRO) is the application of different business models and techniques to new forms of activities .or processes – and radically redesigning them to create outputs of value for end users such as customers or employees. Any non-core . HRO can be traced back to the definitive work of Michael Hammer and Jim Champy in Re-engineering the Corporation. An ongoing debate concerns which business processes are 'core' to organisations .thus reducing people . In essence. This spawned the business process re-engineering (BPR) industry in the 1990s. outsourcing is an accepted management tool for restructuring and refocusing the way an organization does business. for a specified period of time and at a negotiated fee. the management of IT systems has been the major element of the outsourcing market. the organization is making a decision to send certain parts of the business out to a provider whose "core competency" is that part of the business. Until recently. in accordance with terms stipulated in a service level agreement (SLA). BPO has been applied to many transactional processes that can be easily defined or 'scaled' and transferred to third party ownership with deeper expertise than themselves.in the sense of core competencies that drive competitive advantage.1. Introduction: What Is Outsourcing? In a nutshell.or peripheral .
the outsourcing of either health and welfare benefits administration or defined retirement plan and 401(k) plan administration to a thirdparty administrator would be an example of multi-process or blended services outsourcing. payroll. With the new focus on outsourcing. there is more of an opportunity to partner with the vendor to provide the service on a longer term basis rather than just a one-time vendor contract. Other advantages for clients include: • cost reductions • service improvements • upgrading technology • being better able to respond to business change. compensation and communications. . HR outsourcing was thought of as hiring a vendor to provide a service.or 'e-HR'. as well as the transition of HR management and staff. HR executive management would normally remain in place within the organization. HRIS. As such. Total HR outsourcing: Total HR outsourcing represents the transfer of the majority of HR services to a third party. Competition among HRO providers has dramatically reduced prices. one element of a business process or a single set of high-volume repetitive functions is outsourced to a third-party administrator.although not exclusively . Types of HR Outsourcing In the past. Much day-to-day HR administration can now be transferred to third party providers. benefits. along with strategic planning related to people management and other key HR functions at the discretion of management. Multi-process services: The complete outsourcing of one or more functional huma resource processes would be an example of multi-process outsourcing (also called blended services). Payroll and benefits is widely outsourced with organisations benefiting from economies of scale and powerful Enterprise Resource Planning (ERP) solutions.in the US such as ACS. However. pioneered by firms specialising primarily in IT outsourcing . EDS and Accenture. Many transactional HR processes are outsourced and are increasingly associated with electronic delivery . to include recruitment. HR outsourcing can include: Discrete services: In this instance. Examples of discrete services could include the annual open enrolment process. flexible spending accounts or employee background checks.The outsourcing of HR processes emerged in the late 1990s.
The research aims to discern common factors promoting or inhibiting the growth of HR outsourcing industry in India. The research tries to determine patterns while comparing organizations involved in HR outsourcing against those which are not. the data collected will help in finding parameters which are most common in terms of HR outsourcing.2. Also. Objective of the research The objective of this research is to formulate a picture of current trends in outsourcing in HR services prevalent in Indian firms. .
indicated that HR outsourcing was likely to increase in the next five years. Literature review: Global Scenario SHRM Human Resource Outsourcing Survey Report The 2004 survey report revealed that HR outsourcing was a practice used by almost six out of 10 organizations. However. pension benefits and payroll were examples of functions most commonly cited as partially outsourced. When asked about the future of outsourcing. when they are completely outsourced. HR functions. and nearly one-third expected their organizations to increase their level of HR outsourcing. Outsourcing seemed to be favored to a greater extent in large-staff-sized organizations: almost twice as many HR professionals from these organizations. about two-thirds of HR professionals predicted that their level of outsourcing would remain the same over the next five years. were twice as likely to indicate that their reason for outsourcing was an attempt to free up the time of their HR staff to focus more on organizational strategy. The top three functions that were outsourced completely were background checks. employee assistance programs and administration of flexible spending accounts. the majority of HR professionals indicated that outsourcing allowed HR professionals the chance to concentrate their efforts on core business functions. one-third of organizations did not outsource any HR functions. the vendor takes full responsibility. HR functions were usually partially outsourced or completely outsourced. When asked about the benefits of outsourcing. Correspondingly. specifically transactional.3. compared with medium organizations. large-staff-sized operations. and only a few planned to outsource HR functions in the next three years. Some of the most frequently named drivers for outsourcing were reducing operating costs and controlling legal risk by improving compliance. More than one-half of HR professionals indicated that their organizations partially outsourced an HR function. nearly three-quarters of HR professionals agreed that the role of HR professionals became more strategic with the outsourcing of certain. Administration of health care benefits. the organization co-manages the function with the vendor. However. . such as organizational strategy development and execution. The difference is that when functions are partially outsourced. compared with small organizations.
however. Lakshmikanth says. receivable and logistics management.‖ "HR outsourcing can happen in areas such as payroll. confirms the situation. "HR outsourcing in India has not seen the required momentum and is limited to a trickle effect. or are unaware of the players operating in the area. call centres and database management. the most common processes outsourced are related to training. hardware maintenance. And the trend seems to have hit not just big multinational companies but the public sector and government undertakings as well. says. benchmark studies and statutory compliance."Today. a global HR outsourcing and consulting firm. In India. say though foreign companies are outsourcing jobs to India. executive director. founder CEO & managing director of The Head Hunter. every organisation is aiming at ." Mahajan adds. putting the country in the middle of outsourcing boom. Kris Lakshmikanth. the general opinion among the Indian companies is that it is still economical to manage all their HR process internally. Talent Hunt Pvt Ltd. a recruiting firm in Bangalore. the Indian companies do not seem to be enamoured by the opportunity till now and are not adopting HR outsourcing practices in a big way. conducted by Hewitt Associates. Elaborating about the benefits of manpower outsourcing. fixed assets administration. A recent survey 'Outsourcing in the Asia-Pacific'. though on a very low key yet in the latter. surveys." says Anil Mahajan. payroll processing. manpower outsourcing is slowly becoming the new buzz in India too. "Even though across the globe companies are realising that headcount is directly related to the revenue and are outsourcing most of their transaction and administration related work. The survey showed that many companies in the region are either unfamiliar with the process and procedures of HR outsourcing. making payroll. "It is a process of outsourcing involving particular tasks like recruitment. Experts. telemarketing.‖Explaining about the concept of HR outsourcing. adding: "Here people are also not very clear about what exactly is manpower outsourcing all about. Estimates show that the latent size of HR outsourcing in India is about $2 billion with a current market of $27 million and it is growing at a rate of about 50 per cent. a leading HR firm in New Delhi. employee benefits administration." Mahajan says. with companies outsourcing a few selected low-end HR processes.Present scenario in India With more and more companies looking to rationalise employees on their payroll. network. training and development to a third party who have expertise in these respective fields.
‖ he adds. many HR outsourcing vendors are optimistic that things will look up in the near future. security breaches and overall confidence in the vendors deters many organisations. losing control over confidential data. This gives the customer the feeling that they are not getting best value for their money. Therefore. However. But. ―most companies are not sure about the end result.achieving productivity by enhancing return on investments and achieving the economies of scale. it makes sense to focus only on the organisation's core competencies and outsource non-critical business activities. Besides the fearof losing jobs. . Also currently there are no standard benchmarks available so pricing varies a lot from vendor to vendor for similar services. it would still be sometime before we see increased levels of HR activities being outsourced." they say. In this context. can be outsourced to third party vendors. although important. According to Mahajan. routine administrative work. Quality at times forms another roadblock. ethics and quality of outsourcing vendors. "There has also been a transition on its user acceptance. where it is moving from a corporate domain to public sector undertakings and the government sector. as the Hewitt survey puts it ‗with economic slump showing signs of improvement." Experts say the basic reasons hampering the growth of HR outsourcing in India are confidentiality and cost factors. which they will receive from the vendor.‘ Experts also believe that in present times HR outsourcing is undergoing a transition phase.
Key Points we noted: HRO market is still in transition Vast difference exists between the state of HRO market in India and the global scenario People not yet clear about HRO in India Public Sector hasn‘t yet taken to outsourcing Cost/benefits and confidentiality are most important considerations in HRO More freelancers exist in the market than organized players Size of companies is also an important factor in HRO HRO is expected to gain momentum in the coming years .
They will get to know about the perceived advantages and disadvantages of HR outsourcing and also the important considerations to be kept in mind. It will give them a comparison of the firms outsourcing HR services with those that have completely inhouse HR functions.4. The students can also benefit from this research as they will become aware of the new trends in the field of HR and will be better prepared for the challenges ahead of them when they join the industry as HR professionals. . Scope/Utility of the research: The research can be very useful to the HR professionals to understand the current trends in the market with regards to outsourcing of HR services. Outsourcing Vendors can also find this research useful in understanding the needs of their potential and existing clientele.
For this purpose. and previously conducted researches on the similar topics. Also. Research Methodology Two methodologies were adopted while undertaking the research: Secondary data collection: large amount of secondary data is available in the forms of articles.5. a questionnaire was mailed to some of the HR managers and executives in various organizations and their response was solicited. . This data was collected and studied to determine some of the broad trends prevalent in HR outsourcing across the world and the presence of HR outsourcing industry in India. journals. Primary data collection: Primary data was collected through the means of a sample survey. The data collected through this survey was then analyzed to determine patterns and for testing the validity of the hypotheses formulated. the data thus gathered helped in identifying key parameters to examine through further exploration and thus helped in defining the hypotheses for further study as well as designing the questionnaire.
Also.2 Data Collection: A questionnaire was developed and administered via email to the respondents. 5.5. The questionnaire was accompanied by an introductory letter stating the purpose of the research and promising confidentiality. Convenient sampling technique was used owing to limited number of resources for carrying out the research. Responses were then collected and analyzed to arrive at certain conclusions. The study objective itself omitted the need to study small scale organizations as they generally don’t have a separate HR division as such and hence were not considered for carrying out the survey. . Target group for carrying out the survey was the HR departments of various organizations. the respondents chosen were from varying sectors and thus provided a good estimate of the overall picture prevalent.1 Sampling technique: The sampling technique used for the survey was non-probabilistic in nature.
explore ways to obtain those results in-house.‖ Dubiski noted. etc. If the employer wants cost savings. Create a business case for outsourcing Do this just as you would for any other initiative. because you will need accountability once you‘ve chosen a vendor. outsourcing probably isn‘t the best option. This will also give you a baseline for comparing previous results to those from outsourcing. . benefits. with measurable goals.‖ Dubiski said.5. ―You can‘t collect enough data about how you now handle payroll.4 PROCESS Whether your organization is anticipating its first outsourcing.‖ Dubiski warned.3 HUMAN RESOURCE OUTSOURCING BASICS While deciding whether HR outsourcing is right for the company three questions should be answered. 5. or if you already have outsourcing arrangements that your organization would like to improve. • Is the company comfortable letting someone else handle its HR functions? • Do the company have dedicated HR representatives or adequate resources to manage its HR needs? • Can the business afford an HR outsourcing firm? If the company is not comfortable with an outsider handling their HR functions. preparation is a key – as with all HR initiatives. ―You should choose functions that are definable. Seek a vendor that will work very closely with your company ―It‘s time-consuming to change vendors if you make a mistake and choose the wrong one. His recommendations are as follows: Examine all functions being considered for outsourcing Ensure they are being done in-house as efficiently as possible.
―As concerns about privacy and identity theft increase. Dubisky suggested.Make sure your contract with the vendor includes penalty clauses and incentives to increase accountability Ask the important questions up front: Does the vendor have a help desk? How late in the day is it available? How fast will help desk staff answer questions for employees and resolve problems? Also include a clause specifying that if the outsource vendor makes more than a certain number of mistakes. structure. It is also very . core competencies. contract length and termination date need to be determined. Existing and future performance is then to be measured along with the estimation of the cost of poor performance. information management and project management need to be addressed.‖ Doyle said.‖ Based on the recommendations of Dubisky. transformation tools. Other resources are to be acquired and issues like resource management. value chain and strategies. Accordingly. and advisers are to be engaged to train the team. Thereafter decision rights. the employer is entitled to a partial refund. we see more and more of our clients ‗kicking the tires‘ on the confidentiality services we can provide when managing their employees‘ data. Aligning initiative should follow.‖ Doyle said. Regular reports from the vendor can help to avoid problems or catch them early. the outsourcer may not be as accountable as the buyer of the services would like. 2) Exploring Strategic Implications: The second step is to understand the organization‘s vision. Learn about security protections the vendor provides You need a vendor who has ―lots and lots of control over who has access to employee data. the following seven steps have been identified in order to achieve success in HR Outsourcing: 1) Planning Initiatives: The first step is to announce initiative after the assessment of risks. 3) Analyzing Costs and Performance: The next step in the process is to measure activity and project failure costs. Dubiski said. objectives then be set. Project team is to be formed. Consider at the outset how you will measure vendor performance ―If there are mismatched expectations about service levels.
An RFP is drafted. make total costs. make offers/termination. are to be solved.important to benchmark costs and performance. Proposals are then evaluated based on the qualifications and costs and the provider is finalized. Accordingly. set up oversight council. The employees need to be taken into confidence. The organization and the provider are to meet them. The contract then need to be negotiated based on the scope. The ultimate effort is to build the relationship. pricing models and final targets need to be determined. Specific risks. 4) Selecting Providers: The next crucial step is to select providers. pricing schedules. human resources. meeting schedule and performance reports need to be defined and designed. if any. 5) Negotiating Terms: Negotiations are then to be planned after addressing high level issues and deal breakers. and other production factors are to be addressed. . 5) Transitioning Resources: The next important step is to adjust team roles and to compare/merge transition plans. term sheets are to be prepared. Providers are then identified and screened. and communicate. asset values. The transition issues like communication. and provide counseling. the organizations need to first set qualifications and evaluation criteria. 6) zManaging Relationships: The last but the most vital step is to adjust management styles. For this purpose. Poor performance is to be confronted and problems. and terms and conditions. and the relationship be announced. performance standards. Meeting agendas.
Limitations The limitations of our research are: The sample which we took does not represent the whole population as the numbers of respondents were very less We used convenience sampling technique owing to limited resources which is not ideal for this kind of research Our limited experience was another constraint on the quality of the research We could not include the HRO vendors in our research to gain their perspective Our respondents were from specific areas and did not cover the whole of India We missed out on some sectors in our research .6.
One-third of organizations do not currently outsource any HR functions. in the form of moving one or more HR functions from in-house to an outside provider. Outsourcing seems to be favored to a greater extent in large-staff-sized organizations. about twothirds of HR professionals predicted that their level of outsourcing would remain the same within the next five years and nearly onethird expected outsourcing at their organizations to increase. HR functions are usually either partially outsourced or completely outsourced. When asked about future outsourcing. However. large-staff-sized organizations. Only 2% of HR professionals predicted that their organizations would outsource their entire HR department within five years. employee assistance programs (EAPs) and administration of flexible spending accounts (FSAs). Some of the most frequently named drivers for outsourcing were reducing operating costs and controlling for legal risk by improving compliance. Administration of health care benefits. compared with medium organizations. More than one-half of HR professionals indicated that their organizations partially outsourced an HR function and fewer outsourced completely. is a practice used by almost six out of 10 organizations. compared with small organizations. About one-half of HR professionals believed that outsourcing has decreased job opportunities for HR professionals. pension benefits and payroll were functions most commonly cited as partially outsourced. The top three functions that were outsourced completely were background checks. and only a few plan to outsource in the next three years. the organization co-manages the function with the vendor. The difference is that when functions are partially outsourced. indicated that HR outsourcing is likely to increase in the next five years. when it is completely outsourced. were twice as likely to indicate that their reason for outsourcing was an attempt to free up the time of their HR staff to focus more on organizational strategy. Almost twice as many HR professionals from these organizations. the vendor takes full responsibility. HR .7. while about one-quarter perceived an increase in job opportunities.Key Findings HR outsourcing.
nearly three-quarters of HR professionals agreed that the role of HR professionals becomes more strategic with the outsourcing of certain. specifically transactional. HR functions.professionals from large-staff-sized organizations. appear to be more concerned than those from small and medium organizations that outsourcing leads to reductions in HR staff. When asked about the benefits of outsourcing. the majority of HR professionals indicated that outsourcing allows HR professionals the chance to concentrate their efforts on core business functions such as organizational strategy development and execution. however. Correspondingly. .
Average— The mathematical average of all of the data points or observations in a set. . For example. Is there a relationship between x and y? Correlation does not necessarily indicate causality. It would be impractical to study every U. Similarly. Standard deviation (SD)— The dispersion of values around the mean. usually a smaller. representative sample is drawn.8. calculated by adding the data and dividing the resulting sum by the number of data points. names could be drawn from a hat. If the population is very small. A small standard deviation indicates low variability and relatively high consensus among responses. consider that a researcher wants to study the U. therefore. A large standard deviation indicates high variability and a relative lack of consensus among responses. it is not prudent to study all SHRM members in a single study.S. so the researcher chooses a part of it (a sample) representing the entire population.Key Research Terms Correlation— The degree of connectedness or association between two variables. random samples are generated by statistical software. however. population. A mean may be affected by extreme data values. Typically. Sample (represented by n)— A subset of a population that represents the population to be studied. A random sample can be generated in a variety of ways. The sample must have the same characteristics as the entire population. resident.S. Random sample— A representative sample of a population where each member of the population has an equal chance to be chosen for the research.
the likelihood (probability) of these results occurring by chance only is less than 5%.Statistical significance— A condition occurring when the researcher can show (through specific tests for significance) that the likelihood is small that the results occurred by chance. .05. if a researcher claims that the results are statistically significant at p<. For example.
the trend toward the use of several HR outsourcing services is apt to continue because larger providers are more likely to offer a larger selection of products and services. With an increasing need to save costs. Because the main reasons for outsourcing are to save money and reduce operating costs. Russia and China. the seamless delivery of technology-enabled HR services will be critical. but they may also be more likely to utilize multiple HR outsourcing services. offshoring— where outsourced functions result in jobs moving to other countries—could become another key driver in the trend toward outsourcing. Using a single HR outsourcing services provider may make it easier to link several different systems together. and HR processes that are currently being outsourced to companies based in the United States may soon be sent to lowercost countries to create even greater cost savings.A Look Ahead: A Future View of Human Resource Outsourcing 17 Most human resource outsourcing market analysts believe the market for HR outsourcing will continue to grow over the coming years. creating a more seamless delivery. Improvements in information and communications technology have enabled many industries to take advantage of the lower labor costs in India. the Philippines. and in this case. this seems likely to occur. to companies operating out of the United States may be . a greater demand for customization and the growing tech-savvy of the workforce. The types of HR functions that are likely to be offshored. This prediction seems to be supported by this report‘s findings that show that almost one-third of HR professionals said their companies planned to increase the use of outsourcing. This may be particularly significant if there is a rise in the use of self-service HR delivery mechanisms. as opposed to outsourced. As existing HR outsourcing providers merge and other major players get in the game. Another factor that may encourage more businesses to outsource multiple HR processes to a single provider is the increasing integration of business and technology systems. This increased use of outsourcing could be particularly pronounced in larger organizations due to economies of scale.9. Not only may larger businesses save money by outsourcing discrete HR functions.
Most of the survey respondents felt this shift was toward a more strategic role. many HR services that will continue to be resistant to both outsourcing and offshoring due to the nature of the work. These respondents may view outsourcing as a way to free them up to focus on more visible and high-profile strategic tasks. Regardless of the form it takes. As SHRM tracks the outsourcing trend over the coming years. As more transactional HR functions are outsourced. the character of the HR positions that remain could shift as well. This could be why at least some of the HR professionals surveyed believed that outsourcing had improved their job opportunities. This could mean that some functions may be more likely to be only partially outsourced to other countries. one of the most critical issues it will continue to examine will be whether the number of HR professionals reporting an improvement in their own career prospects as a result of the outsourcing trend increases. There are. the development of the offshoring trend will have a major impact on HR outsourcing overall.slightly different due to a variety of factors such as cultural knowledge or security issues. Those involving high levels of face-to-face customer interaction or specialization are likely to be least vulnerable to outsourcing. however. .
So companies now. a service provider or a manufacturing firm. focus on their core competency. Today. background interviews. human resource management (hiring and firing. Rapidly changing market dynamics and global competitive pressures have caused organizations to spend more time focusing on their core business. One very important trend in the recent times has been the growth of human resource outsourcing. The number of companies outsourcing HR activities continues to rise. Critical internal resources. human resources outsourcing is becoming increasingly prevalent. and the scope of outsourced HR activities continues to expand. etc). Life insurance. enhance services. decide what they are good at and outsource everything else.10. Outsourcing has become a common response to manage people and technology resources strategically.e. The organization can focus on higher valueadded activities while the outsourcing provider takes care of the day-to-day administration. handling taxes. Cafeteria. Medical. As a result. exit interviews and wage reviews).. employee benefits (Health. risk management. and manage costs more effectively. Organizations are fast realizing that they can't be all things to all people.Executive summary This research is aimed at analyzing the current state of the HR outsourcing market in India and the trends that are prevalent in the same. and let someone else do the rest in a more efficient and cost-effective manner. dealing with sick-time and vacations). in this era of globalization there is high degree of competition in all areas. HR outsourcing can happen in HR functions. be it a software company. Outsourcing non-core activities allows HR professionals to move away from routine administration to a more strategic role. etc. such as technology and talent. like payroll administration (producing checks. can be devoted to company's core business. . i.
The biggest problem . the future seems to be very promising. and issues like quality and trust needs to be addressed properly. India has immense potential as more than 80% of fortune 1. ethics and quality of outsourcing vendors. Companies to whom organizations outsource their Human Resources function possess the knowledge and resources to expertly perform part or all of a clients' human resources function. people are not very clear about what exactly is manpower outsourcing all about. outsourcing becomes a strategy for reducing the capital intensity of the business. Also. Many recognize outsourcing relationships as long-term partnerships created to further the strategic goals of the organization. Thus. Estimates show that the latent size of HR outsourcing in India is about $ 2 billion with a current market of $ 27 million and it is growing at an alarming rate of about 50 per cent. But still in India. we tried to find out about the preferred models for outsourcing and perceived advantages and disadvantages. This is where Indian HR outsourcing companies face a major handicap. This strategy has gained popularity as companies aim to become more nimble and gain the speed and flexibility necessary to compete in today's business environment. Experts say the basic reasons hampering the growth of HR outsourcing in India are confidentiality and cost factors.and this is why the HR outsourcing industry in India is on the back foot . As part of our research. security breaches and overall confidence in the vendors deters many organizations. A growing number of executives understand the benefits it can bring in terms of not only cost savings. Moreover. we gathered information from a number of companies about HR outsourcing and the reasons for which they outsource or don‘t outsource.is the government and the industry's failure to tackle issues like data security and data privacy. losing control over confidential data. the fear of losing jobs.000 companies are discussing HR outsourcing as a way to cut costs and increase productivity. However.Outsourcing reduces the need for large capital expenditures in non-core functions. but also heightened strategic focus. allowing the client to streamline their internal processes and concentrate on generating profit in their core business. .
Analyzing data 5. Defining the objective of the research and reviewing literature available on it (Secondary Research) 2. Research Design: Developing Research Plan and implementing it .deciding on the sample size .Research Process adopted was as follows: 1. Interpreting and reporting the findings .designing questionnaire . Preparation of report 6.taking interviews 3. Collecting data 4.
Star Wire India Ltd.Some of the companies included in the survey were: HDFC Bank B.L. ICICI Lombard TCS Cognizant JCB India Ltd. Mcgraw-Hill Education .E. Tata Saksoft Ltd.H. Ltd. Sterling & Wilson Pvt.
HR professionals from large organizations also expressed greater concern that outsourcing would lead to reductions in HR staff size. such as less face-to-face contact with employees and decreases in in-house expertise. This is especially evident in large-staffsized organizations which show a trend in utilizing outsourcing slightly more than smaller organizations. As a way to juggle these responsibilities. which is corroborated by results of this survey that show these organizations experiencing decreases in their HR department size in the past five years. also reported more unfavorable outcomes due to outsourcing. These two roles afford that HR professionals have the foresight to manage the organization‘s strategic approaches while also handling its most immediate and relevant concerns. They also report a greater likelihood of increasingly relying upon it in the future. Second. Large organizations. The first involves being a business partner focusing on core functions that impact bottomline objectives of the organization.Conclusion HR departments today are faced with dual roles.11. . HR professionals are critical in ensuring that the day-to-day needs of employees are addressed. however. outsourcing appears to be a viable option that organizations are embracing.
are likely to be felt throughout the profession. however. the role of HR professionals will continue to alter as the profession advances into new territory. While most of the discussion about HR outsourcing tends to center on the cost savings. It is likely that as an outcome of outsourcing the preferred skills in the profession may shift. while others do not. regardless of whether an organization outsources its HR functions or not. Some embrace it. These changes. outsourcing may not be the most viable alternative.HR professionals are fully aware of the impact of outsourcing on the profession. the advantages and the disadvantages. Some jobs may be redistributed such that they require broader business skills as well as specific HR expertise. Yet. Depending on the organization‘s business goals and corporate culture. . the real focus may need to be on preparing for the inevitable impact on the profession itself. Their concerns center around the shifting roles of the HR professionals that require them to be both transformational and transactional.
Deepa Sethi Jennifer Schramm.Com.blogspot.shrm.org/research hrmba.com . Survey Analyst WEBSITES: www. Manager of Workplace Trends and Forecasting Evren Esen. Manisha Seth and Dr. Part 1 ARTICLES: Dr.12.BIBLOGRAPHY ACADEMIC BOOKS: ―Human Resource Management‖ by Mumbai University for M.
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