Literature Review

1. Johnson, Wileman, Sullivan L, (2007) -The Rise of Outsourcing

https://core.ac.uk/download/pdf/11233514.pdf
The prevalence of outsourcing is increasing worldwide. An example is the thousands of IT
jobs that are outsourced to India in the fields of E-commerce, Software engineering, network
systems, network security systems, as well as digital and animation creation India is a global
leader in outsourcing, enjoying a strong reputation in software and hardware outsourcing. The
country is also a major source of software production for many organisations in the world
that 82 percent of organisations in the U.S., including major firms like IBM and Accenture,
are relying on IT outsource services from India because they provide a high quality of
service. However, IT outsourcing is not the only popular outsourcing services provided from
India and other parts of the world. It shows the most popular activities to be outsourced and
highlights that the HR function is a very commonly outsourced function. In fact, the HR
outsourcing market in India alone has been growing rapidly in the past few years, with the
market potential of HR activities in India increasing to $32 billion.

2. According to Elmuti (2003)

The market for the outsourcing provider is growing rapidly because outsourcing is the way
for organisation to generate value. With an outsourcing strategy, an organisation can gain a
benefit of cost reduction. It stated that cost reduction is the reason why most organisations
have outsourced their service - including manufacturing, payroll, human resource activities
and others – to country like India and China, because India and China can provide a high
quality of labour pool that lead to a high quality of service with a low cost. Similarly,
Thailand is one of a lower cost location in Asia/Pacific alongside with Australia and New
Zealand which human resource activities are the most commonly outsourced service.
3. Cooper, Potkány (2007)

Focus on core competencies many organisations make a decision to outsource some

organisational activities. This is because they want to focus on their core competencies, and
see low value in developing in-house activities outside of this core. Specifically, outsourcing
HR activities can reduce the work load of existing HR staff, thereby allowing the
organisation to primarily focus on strategic decision making and developing core
competencies supports the view that outsourcing HR activities can allow managers to pay
attention to their core business rather than spend valuable time on HR activities that are
becoming increasingly more complex and advanced.

4. Datar (2003)

It proposes that some internal activities of the HR function are not core business and could be
either permanently or temporarily outsourced. For example, recruitment is the most popular
HR process to be outsourced. Recruitment specialists have more advanced techniques,
including multiple sourcing channels, Web-sites, and recruitment software (“spiders”) that
can easily find thousands of applicants, thereby increasing the probability that the best person
for the job will be found. The increased complexity and turnover of information in the HR
area is also widely managed by external experts. Human Resource Information Systems
(HRIS) and other HR software play an important support role in managing people they
confirms that HRIS have become a significant mechanism that help organisations improve
productivity and retain a competitive advantage.
5. (Pritchard, Greer, Youngblood and Gray (1999) (write research papers topic name)
(copy websites link)

Therefore suggest that outsourcing HRIS to a provider is a cost-effective strategy. Therefore,

there are a variety of factors that motivate the trend towards HR outsourcing, including a
focus on cost saving, and the need to concentrate on core competencies (Reilly, 2006).
However, the focus on HR as a value-adding function at the strategic level is seen as a
significant driver for outsourcing HR activities.

6. Gubbins, Garavan, Hogan & Woodlock, 2006; Tanure & Duarte, 2007; Wirtz,
Heracleous & Pangarkar, 2008). Strategic HR (copy websites link)

Organisations increasingly acknowledge the strategic importance of the human resource

function. As human resource management perspectives change from operational and
administrative, to strategic, HR becomes more aligned with organisational goals and strategy.
This change has increased the focus of outsourcing the HR function, and it is steadily
building momentum in many organisations.

Findings

1. From the data we could analyse that the organisations are outsourcing their human
resource functions which is helping them to reduce their overhead costs and it permits
them to concentrate on their core business.
2. Through outsourcing they can focus on the area where they have expertise and it allows
the firms to obtain competitive advantage and gain profit from the expert service
providers who may have specialized skill in the concerned areas.
3. The process of outsourcing also has certain limitations because while we are outsourcing
our training process the outsourcing can provide a shortcut to a more competitive product,
but it typically contributes little to building the people-embodied skills that are needed to
sustain product leadership.
4. The recent scenario in India which says about outsourcing focuses on managing tactical
and transaction oriented HR operations. If these tactical processes are outsourced, the
company could re-deploy their trained HR resources to core processes.