DISSERTATION REPORT

ON
“HUMAN RESOURCE OUTSOURCING, RELEVANCE & SCOPE”

Submitted By

Pankhuri Sinha

MBA Sec A

Under the Supervision of

Dr. Mrs. Shikha Kapoor

Faculty- Innovation

Amity International Business School, Noida

In partial fulfillment of degree of Master of Business Administration

AMITY GLOBAL BUSINESS SCHOOL

AMITY UNIVERSITY UTTAR PRADESH

SECTOR-125, NOIDA-201303, UTTAR PRADESH, INDIA

 AMITY GLOBAL BUSINESS SCHOOL

AMITY UNIVERSITY UTTAR PRADESH

DECLARATION

I Pankhuri Sinha hereby declare that the project report titled “HUMAN RESOURCE
OUTSOURCING, RELEVANCE & SCOPE” is my own work and has been carried out under
the guidance of Dr. Mrs Shikha Kapoor All care has been taken to keep this report error free
and I sincerely regret for any unintended discrepancies that might have crept into this report. I
shall be highly obliged if errors (if any) be brought to my attention.

DATE: Pankhuri Sinha

PLACE: A30101911033

MBA

2
 AMITY GLOBAL BUSINESS SCHOOL

AMITY UNIVERSITY UTTAR PRADESH

CERTIFICATE

I Dr. Mrs Shikha Kapoor hereby certifies that Pankhuri Sinha, Student of Masters of Business
Administration at Amity Global Business School, Amity University Uttar Pradesh has completed
Dissertation Report on “Human Resource Outsourcing, Relevance & Scope”, under my
guidance.

DATE: Dr. Mrs Shikha Kapoor

PLACE: Faculty- Innovation

AIBS

3
 ACKNOWLEDGEMENT

I take this opportunity to express my deep sense of gratitude to all those who have
contributed significantly by sharing their knowledge and experience in the completion of this
project work.
I am greatly obliged to Dr. Ashminder Singh Bahal, Director, Amity Global Business
School, Noida for providing me the right kind of opportunity and facilities to complete this
venture.

My heartfelt thanks to my respected Faculty Guide namely Dr. Mrs Shikha Kapoor
Without her continuous help the project would not have been materialized in the present form.
Her valuable suggestions helped me at every step.

Finally, I would also like to thank all my dear friends for their kind cooperation, advice
and encouragement during the long and arduous task of preparing this report and carrying out the
project work.

At last but not the least, who are always at the top of my heart, my dear family members
whose blessings, inspiration and encouragement have resulted in the successful completion of
this project.

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 ABSTRACT

Today, every organization is aiming at achieving productivity by enhancing return on

Investments and achieving the economies of scale. In this context, it makes sense to focus only
on the organization’s core competencies and outsource non-critical business activities. Therefore,
routine administrative work, although important, can be outsourced to third party vendors.

With more and more companies looking to rationalize employees on their payroll, Human
Resource outsourcing is slowly becoming the new buzz in India.

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,
allowing the client to streamline their internal processes and concentrate on generating profit in
their core business.

Companies who haven’t joined the HR outsourcing bandwagon are either unfamiliar with the
process and procedures of HR outsourcing, or are unaware of the players operating in the area or
are unaware of the probable value obtained from doing so.

HR Outsourcing market is increasing worldwide ($51 billion) representing approximately 39

percent of the total business process outsourcing revenue.

If an organization decides to outsource its non-core HR activities, it must not only be guided by
the cost factor alone, but also look for a cultural fit, and a commitment to quality. One must look
into the range of services, which a vendor is going to offer, and what are its expertise, experience
in offering such services, resources, and flexibility of its contracts.

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 TABLE OF CONTENTS

Chapter 1 Introduction

1.1 Literature Review………………………………………………………......9

1.2 Purpose of the Study………….…………………………………................12
1.3 Objectives of the Study…………………………………………………….12

Chapter 2
2.1 Human Resource Outsourcing…………………………………………....14
2.2 Services offered…………………………………………………………..16
2.3 Advantages & Disadvantages…………………………………………….17
2.4 Future scope of HR Outsourcing…………………………………………22

Chapter 3 Research Methodology

3.1 Research Design ………………………………………………….................24

Chapter 4 Analysis & Findings………………………………...26

Chapter 5 Suggestions and conclusion

5.1 Suggestions………………………………………………………………..40

5.2 Conclusion………………………………………………………………...41

BIBLIOGRAPHY&WEBLIOGRAPHY……………………………..42

ANNEXURE I………………………………………………………………...43

ANNEXURE II……………………………………………………………….47

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7
1.1 Literature Review

Outsourcing is contracting with another company or person to do a particular function. Almost

every organization outsources in some way. Typically, the function being outsourced is
considered non-core to the business. The outside firms that are providing the outsourcing
services are third-party providers, or as they are more commonly called, service providers.
Although outsourcing has been around as long as work specialization has existed, in recent
history, companies began employing the outsourcing model to carry out narrow functions, such
as payroll, billing and data entry. Those processes could be done more efficiently and therefore
more cost-effectively, by other companies with specialized tools and facilities and specially
trained personnel. Currently, outsourcing takes many forms. Organizations still hire service
providers to handle distinct business processes, such as benefits management. But some
organizations outsource whole operations. The most common forms are:

 Information technology outsourcing (ITO)

 Business process outsourcing (BPO).

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Business process outsourcing encompasses call center outsourcing, human resources outsourcing
(HRO), finance and accounting outsourcing, and claims processing outsourcing. These
outsourcing deals involve multi-year contracts that can run into hundreds of millions of dollars.
Frequently, the people performing the work internally for the client firm are transferred and
become employees for the service provider.

The process of outsourcing generally encompasses four stages:

1) Strategic thinking, to develop the organization's philosophy about the role of outsourcing in
its activities;

2) Evaluation and selection, to decide on the appropriate outsourcing projects and potential
locations for the work to be done and service providers to do it;

3) Contract development, to work out the legal, pricing and service level agreement (SLA) terms;

4) Outsourcing management or governance, to refine the ongoing working relationship between

the client and outsourcing service providers.

In all cases, outsourcing success depends on three factors:

 Executive-level support in the client organization for the outsourcing mission;

 Ample communication to affected employees;
 The client's ability to manage its service providers.

The challenges of outsourcing become especially acute when the work is being done in a
different country (off shored), since that involves language, cultural and time zone differences.

The 5 W’s of Outsourcing are:

 Who should outsource?

 Why should a company Outsource?

 What should a company Outsource?

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  When should a company Outsource?

 Where should a company outsource?

To sum up, we can say that outsourcing gives:

 The competitive edge - through sophisticated technology and people

 Support to do tasks faster, better and cheaper
 Operational efficiencies without capital investment Leading-edge e-business
infrastructural support and facilities
 Management
 Better performance
 Lower cost
 Security
 Process maturity

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1.2 Purpose of the Study

To enhance the grip of Human Resource Outsourcing. The purpose of the undergone research is
to study the Human Resource Outsourcing and to evaluate the importance, organization’s
perception with the kind of outsourcing being followed in the organization.

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.

1.3 Objectives of the Study

The objective of this research is to study the HR outsourcing practices followed by the
companies in order to understand its relevance in current scenario and its scope in future. Also
try & find out the advantages & disadvantages of outsourcing.

This research is accomplished to know the perception of organizations about outsourcing.

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12
 2.1 HR Outsourcing

Human resources are the most critical assets of any organization as the organization's success lies
in their hands. It is the process in which a company uses the services of a third party to take care
of its HR functions. A company may outsource a few or all of its HR related activities to a single
or combination of service provides located in offshore destinations.

The debate on human resource (HR) outsourcing is polarized. HR outsourcing is seen as an

opportunity for the HR function by some and as a threat by others. The first school of thought
suggests that HR outsourcing is an instrument creating time for HR to become a strategic
partner. The second view considers HR outsourcing as a cost-cutting instrument gradually
reducing HR staff. The purpose of this study is to examine whether HR outsourcing is a
manifestation of a strategic HR focus, a cost-cutting HR focus or both.
In this sense the HR outsourcing service providing firms or HR outsourcing company can
be divided into four categories depending on the services they offer as:

1. PEO’S (Professional Employer Organizations) - Assume full responsibility of a

company’s HR functions.
2. BPO’S (Business Process Organization)
3. ASP’S (Application Service Providers)
4. E- SERVICES
They Provide:
 Web based HR solutions like database maintenance,
 HR data warehousing,

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  Maintaining records,
 Developing and maintaining HR soft wares etc.

HR outsourcing can happen in HR functions like:

 Payroll administration (Producing checks, Handling taxes, Dealing with sick-time and
Vacations),
 Employee benefits (Health, Medical, Life insurance, Cafeteria, etc),

 Human resource management (Hiring and firing, Background interviews, Exit interviews
and Wage reviews),

 Risk management, etc.

Outsourcing has become a common response to manage people and technology resources
strategically, enhance services, and manage costs more effectively.

HR service provider can not be effective if clients assume the provider can serve without their
input. Although the provider does relieve the administrative burden, there still must be a working
relationship based on communication and cooperation.

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2.2 Services offered by Human Resource Outsourcing firms

The basic services offered may include:

 Overseeing organizational structure and staffing requirements. 

 Recruiting, training and development. 

 Tracking department objectives, goals and strategies.  

 Benefits administration.

 Employee orientation programs (Businesses who outsource HR are typically small to

midsize firms with between 25 and 1,500 employees).

 Providing with skilled professionals who are focused specifically on HR.

 Helps to reduce and manage operating costs.

 Improving employee relations

The specific services of these firms include:

 Training,
 Payroll administration,

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  Employee database management,

 Employee retention,

 Employee benefits and a lot more

 Implementing a human resource information system.

 Creating or updating employee handbooks and policy manuals.

 Developing and implementing a compensation program.

 Creating or reviewing a Performance Appraisal System.

 Writing and updating affirmative action plans.

 Providing sexual harassment training REFERRALS, the YELLOW PAGES and the
WEB are the best resources for finding an HR outsourcing provider. 

2.3 Advantages & Disadvantages:

ADVANTAGES

1. Cost savings:
 The cost of business activities outsourced to a provider can be less than the cost of in
sourcing the same activity.
 Can turn fixed costs (assets) into variable costs (leasing agreements).
 Can reduce non productive assets on balance sheet.
 When external financing is too costly to invest in a capital expansion, a firm can
outsource the need for the capital investment.
 Client firm becomes part of the outsourcing provider’s network or supply chain, helping
to reduce costs for both parties.

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2. Gain outside expertise:
 Gain access to a broad base of expertise & skills unavailable by in sourcing.
 Outsourcing can be a source of original ideas for improvements in core & non- core
competency services & products.

3. Improve service:
 Can provide the flexibility to transform the organization to be more efficient.
 Reduced costs resulting from outsourcing can increase customer value & satisfaction.
 The psychological impact of outsourcing some business activities tends to motivate
remaining client organization employees to work harder in an effort to retain their jobs.
 Can be used to rapidly introduce new products & services in order to meet shifting
customer demand.
 Can be used to introduce new technologies or systems incrementally into the client
organization.
 Can help new products achieve a faster time to market.
 Can help a client firm develop & gain access to new distribution channels quickly.

4. Focus on core competencies:

 Allows the client firm to focus efforts on outputs & outcomes, while the provider focuses
on inputs & processes.
 Frees up assets to reallocate to core competencies.
 Provides the client firm the discipline to identify & learn what their core competencies
are, & in doing so, aids strategic planning.
 Client firms can gain unique market access & business opportunities that the outsource
provider brings with them.
 Client firms may find they have outsource capacity that they can sell to other firms.
 Outsource provider brings their core competencies to the client, help helping the client
maintain state- of- the – art performance.

5. Gain outside technology:

 Can outsource to state- of-the- art providers instead of retaining older legacy systems.
 Can help client firm personnel learn newer technology.

6. Other advantages:
 Can offer client firm employees an alternative career path, since the outsource provider
may offer better opportunities for advancement.

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  Client firms can improve their image by association with an outstanding outsource
provider.
 Can mitigate risk by transferring problems with human resources, technology, & systems
to the outsource provider.
 Changes the culture of a client firm to be more productive.
 Can be used as a strategy for downsizing or reengineering a client firm.
 Separation of outsource client & provider may benefit the client firm in situations where
customers will inevitably have complaints.
 Allows the client firm to conserve capital to invest in core competencies.
 Outsource provider can serve as a de facto branch of a client firm, which can thus avoid
gong international & also the complexity of dealing with currency & language issues,
multinational accounting problems, etc.

7. Increased profits:
 Takes advantage of currency exchange rates to benefit the client in contracts with foreign
outsource providers.
 Greater profits because the cost of business activities outsourced to a foreign provider
operating under less restrictive laws can be considerably less than in sourced costs of the
client firm.

8. Improved operations:
 Takes advantage of outsource provider foreign markets for raw materials & labor
otherwise unavailable to client firm.

9. Improved markets:
 Protect home country markets from imports, since it takes advantages of lower cost
foreign labor & materials.
 A first step & learning experience for the client firm in gong international. what better
way to learn about running a foreign operation, expansion into foreign markets , & taking
advantages of all the other benefits a foreign location has to other than to work closely
with outsource providers in that country.

DISADVANTAGES

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1. Increased costs:
 Lag time n service from outsource provider due to distance can add substantially higher
delivery costs to client’s customers.
 Can be costly & difficult to change outsourcing agreements without costly penalties.
 Excessive transition costs for provider training.
 The expense of negotiating, maintaining, & enforcing outsourcing agreements may
outweigh the benefits.

2. Loss of control:
 A dependence by the client on the outsource provider can lead to a variety of problems.
 Loss of flexibility in controlling business activities, final product, by client managers.
 Lack of contractual flexibility.

3. Negative impact of employees:

 Negative impact on client firm employees’ morale when they become outsource provider
employees.
 Causes organizational restructuring, resulting in dislocation & social costs for employees.

4. Negative impact of customers:

 Lag time in service from foreign outsource provider may delay delivery & increase costs
to the client firm’s customers.
 Can disrupt operations during the transition of the outsourced activity from client to
outsource provider.

5. Difficulties in managing relationship:

 Can be difficult to quantify the advantages of outsourcing.
 Design changes in products can be more difficult when ordered from a distance.
 Excessive investment of time in building a relationship with the outsource provider.
 Outsource provider may be unable to communicate difficulties & opportunities.

6. Other risks:
 Sharing knowledge with an outsource provider who may later share it with a competitor.
 Can be costly & difficult to reverse outsourcing decisioning terms of recruiting personnel
in the longer term.

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  Outsource provider may fail to achieve client objectives.
 All of the outsourcer’s risks are also assumed by the client firm.
 Requires an alliance with an undesirable provider.
 Outsourcing business activities may cause the client firm to lose its corporate knowledge
within the firm over time.
 Weakens innovative capacity n the longer term.
 Failure in outsourcing can mean the eventual failure of client firm.
 Outsourcing can result in security or confidentiality breaches.

OUTSOURCNG RISKS THAT WILL LEAD TO BUSINESS FAILURE:

TYPE OF RISK ISSUE DESCRIPTION

Customer complaint issues Client firm customers’ complaints are elevated

by move to outsource provider.

Security issues Sending individual & corporate accounting

records to foreign countries may open the firm
to substantial security & confidentiality risk.

Employee issues Outsource providers may fail to listen to their

own employees.

Client- provider relationship issues Not building relationships, taking a passive

role managing the outsourcing project, & poor
understanding of outsourcing benefits & costs,
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 advantages & disadvantages.

Cost issues Cutting the costs on the outsource provider

results in the provider reducing service to the
client.

Government issues Changes in laws & regulations can reduce cost

advantages of outsourcing.

Structural issues Experiments and different types of outsourcing

may fail n longer terms.

2.4 Future scope of HR outsourcing:

India, with its intrinsic advantages such as low cost, ready pool of English speaking manpower
and geographic positioning, is emerging as a viable destination for HR outsourcing companies to
set up their businesses.
Issues like quality and trust needs to be addressed properly. Experts say the basic reasons
hampering the growth of HR outsourcing in India are confidentiality and cost factors. Moreover,
the fear of losing jobs, losing control over confidential data, ethics and quality of outsourcing
vendors, security breaches and overall confidence in the vendors deters many organizations. 
However, the future seems to be very promising. It's set to become a $ 51 billion market
worldwide in 2005, representing 39 per cent of the total business process outsourcing revenue.
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. India has
immense potential as more than 80% of fortune 1,000 companies are discussing HR outsourcing
as a way to cut costs and increase productivity.
Right now, India is barely skimming the surface of the HR outsourcing market potential. Indian
life Hewitt (ILH), FIDELITY, EXULT and MAFOI are some of the prominent HR outsourcing
services providers in India and the clients include giants of manufacturing, software and service
industries like GE Capital, Ford Motors, Hyundai Motors, Satyam Group, Infosys, Enron etc.

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3.1 Research Design

This research is accomplished to know the perception of organizations about outsourcing. For
fulfilling these objectives I have made questionnaire and asked industry HR experts about their
viewpoints. The primary data is collected in Delhi and NCR.

I. RESEARCH DESIGN:
The research is exploratory.
Reason I chose this research design to know various viewpoints of industry experts about human
resource outsourcing.

II. DATA COLLECTION METHODS:

Primary data collection- Through questionnaire.
Secondary data collection- Through Internet and magazines.

III. RESEARCH INSTRUMENT:

Close ended questionnaire have been used for collection of primary data.
Explanatory questions were asked to know the industry experts viewpoints.

IV. ANALYSIS TOOL:

MS EXCEL

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V. SAMPLING:
Random sampling is applied.
Sample size- 100

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Q1. Are you a HR service provider or outsourcer?

Out of 100 respondents 43% are the HR outsourcing service “providers” & the rest (57%) are the
HR service “outsourcer”.

This shows that the demand of HR outsourcers is more than the service providers. Outsourcing
basically involves Payroll administration, Employee benefits, Human resource management, risk
management.

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Q2.On a 5-point scale state what have been the trends in use of HRO in the
past 3 years?

Be it providing HR outsourcing or service providing there has been a constant increase of

seeking HR outsourcing n the past 3 years. Trend has been so that every aspect of outsourcing
has seen a marginal increase or constant increase.

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Q3.How has the use of external providers changed the work of the HR
department?

63.40% out of 100 are of view that HR outsourcing providers have lessened the burden of HR
department & have changed the course of work being done in & through HR department. They can now
focus on Cost savings, gaining outside expertise, improved service, Focus on core competencies, gaining
outside technology.

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Q4. Specify reasons as to why external providers are used, especially in areas
where they are used the most?

This was a very difficult question to answer by the HR service providers & outsourcers as there are
many reasons for various companies to adopt such a process.

Out of the 100 people 30.76% understand its reason to be cost saving & another 30.76% call it to be
the access to better technology. 23.07% think HR outsourcing is used so as to save time of HR
department & 15.41% seek its reason to be the lack of internal workforce.

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 Q5. What factors are generally considered while choosing HR outsourcing
vendors?

This question has again many implications for many Outsourcing vendors. It totally depends on
company’s requirements what do they seek in HR service providers & accordingly they chose a
vendor.

However 30.76% out of 100 consider the guaranteed service levels as the most important criteria
for choosing HR outsourcing vendors.

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Q6. What do you think are the skills required by HR practitioners today?

There is a close competition between three aspects i.e. discretion & business ethics, strategic &
team orientation, multitasking. According to HR service providers apart from these skills other
skills required totally depends on organizational demands & work practices.

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Q7. Does HRO affect the internal customer satisfaction of the outsourcing
company anyhow?

The statistics show that the motivational level after implementing Human Resource Outsourcing
increased. However people were almost equally demotivated following the implementation of
Human Resource Outsourcing.

Attitudinal change observed on the positive side was more than the negative side. People in most
of the organizations are satisfied with the implementation of Human Resource Outsourcing. This
brings a change in their thinking & aptitude. Also they can concentrate on the core activities of
the company.

This also affects the employee grievance handling & also personalizing company’s value
systems.
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Q8. Does it affect the productivity of the outsourcing company?

36.50% out of 100 are of the view that productivity in terms output & results increases after seeking

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Q10. Which ones are the most employed?

To manage employee legal contracts or to give legal advice is the most sought after outsourcing
service.After this all of the above mentioned outsourcing activities follow with a close percentage of
being most employed.
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Q11. In terms of providing HRO services to your clients, which of the following
are simple to manage and which among these is complicated?

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 However all the three factors are Important as well as difficult to maintain for a company with a
outsourcing firm but then increasing the strategic ability of HR department is what is to be considered
to be most complicated & then follows establishing a good rapport/ trust with the HR department &
then Improving the self service functionality of HR department.

Q12. Have clients asked you for input on restructuring their HR strategy?

For this question majority of HR service seeking clients have asked their HR service providers
for outsourcing services & restructuring of their HR strategy.

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36
4.1Suggestions

 Companies ready to address the necessary transformation of their HR processes will find
that outsourcing will bring access to world-class processes, competitive advantage, and
increased shareholder value.

 Technology compatibility, confidentiality and cost are other challenges that both sides
must work on.

 Mutual trust is critical, as it's a long haul commitment. It is imperative that senior
management is involved right from the beginning and also drives the initiative. In
addition, a clear understanding of requirements and expectations from both sides is an
important platform in building the relationship.
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  Compatibility in culture and values along with an open and flexible approach go a long
way in ensuring that the outsourcing venture is a successful one.

 Renewals are the big news in human resources outsourcing. The economic turbulence is a
tremendous opportunity for HR leaders to come back in a new, more focused, and more
impactful way. Economic modeling, corporate governance, strategic marketing -- all will
become part of the new HR professionals' tool kit.

 Outsourcing is becoming more sophisticated. Customers are looking for business process
excellence, speed to market, improvement in quality, benchmarking to world-class
standards. CEOs are involved to ensure the long-term success of strategic off shoring
decisions. On their part, suppliers understand that they must compete globally and that
outsourcing will play a more transformational and strategic role for the client.

 India can collaborate with other countries to leverage local knowledge of the business
environment and language skills while providing its domain knowledge and technological
expertise for successful outsourcing.

 Global HR benefits deals will become a reality as suppliers develop the technology to
provide a centralized look.

 HR processes will converge and no longer be separate event.

 4.2 Conclusion

The outsourcing market is beginning to see HR as a preferred choice Rapidly changing market
dynamics and global competitive pressures have caused organizations to spend more time
focusing on their core business. Organizations are fast realizing that they can't be all things to all
people. As a result, human resources outsourcing is becoming increasingly prevalent. The
number of companies outsourcing HR activities continues to rise, and the scope of outsourced
HR activities continues to expand. HR outsourcing can happen in HR functions, like payroll
administration (producing checks, handling taxes, dealing with sick-time and vacations),
employee benefits (Health, Medical, Life insurance, Cafeteria, etc), human resource management
(hiring and firing, background interviews, exit interviews and wage reviews), risk management,
etc. Outsourcing has become a common response to manage people and technology resources
strategically, enhance services, and manage costs more effectively.
38
India, with its intrinsic advantages such as low cost, ready pool of English speaking manpower
and geographic positioning, is emerging as a viable destination for HR outsourcing companies to
set up their businesses.

Experts say the basic reasons hampering the growth of HR outsourcing in India are
confidentiality and cost factors. Moreover, the fear of losing jobs, losing control over
confidential data, ethics and quality of outsourcing vendors, security breaches and overall
confidence in the vendors deters many organizations. The biggest problem - and this is why the
HR outsourcing industry in India is on the back foot - is the government and the industry's failure
to tackle issues like data security and data privacy. This is where Indian HR outsourcing
companies face a major handicap. The Indian government is still grappling with drafting a data
protection law designed to quell growing privacy concerns from their offshore clients.

India has immense potential as more than 80% of fortune 1,000 companies are discussing HR
outsourcing as a way to cut costs and increase productivity.

Experts believe that in present times HR outsourcing is undergoing a transition phase, it would
still be sometime before we see increased levels of HR activities being outsourced to India as
lack of domain knowledge and quality are some of the critical issues.

Till that time, HR outsourcing in India remains to be a gold mine waiting to be unearthed.

BIBLIOGRAPHY

1. Delmotte, Jeroen1, (2008). HR outsourcing: Threat or Opportunity? Personnel Review,

37 (5), 543-563.
2. Outsource HR to Achieve Value (2001) Practical Accountant; Small Business Service,
pSR.11-SR.11, 1p
3. Most firm Support HR outsourcing, HUMANRESOURCES FEATURE SECTION,
WESTCHESTER COUNTY BUSINESS JOURNAL, MAY 3, 2004, p29
4. Claude Solnik, Rising tide of regulations promotes HR outsourcing, consulting, Long
Island Business News (Ronkonkoma, NY); 10/07/2005

39
WEBLIOGRAPHY:
1. http://www.bizbrim.com/outsourcing/hr-outsourcing.htm
2. http://www.hrmguide.net/buscon1.html
3. http://www.induction.to/outsourcing/
4. http://www.hroutsourceorganization.com/

ANNEXURE-I

Questionnaire

AMITY UNIVERSITY

AMITY GLOBAL BUSINESS SCHOOL

UTTAR PRADESH

40
Dear respondent,

This questionnaire is a part of the Dissertation a compulsory part of the programme of MBA for
the project titled “HR Outsourcing, Relevance and Scope”.

The objective of this questionnaire is:

 To study the HR outsourcing practices followed by the companies.

 Its scope in future.
Data collected here will be kept confidential.

PERSONAL DETAILS:

NAME OF THE PERSON TO BE INTERVIEWED:

NAME OF THE ORGANIZATION:

ORGANIZATION SIZE / NUMBER OF EMPLOYEES (APPROX):

E-MAIL ID:

Q1. Are you a HR service provider or outsourcer?

a) Provider
b) Outsourcer

Q2. On a 5-point scale state what have been the trends in use of HRO in the past 3 years.
a) Marginal Increase
b) Increased
c) Constant
d) Decreased
e) Marginal Decrease

Q3. How has the use of external providers changed the work of the HR department?
a) Extensively changed
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 b) Marginally Changed
c) Changed
d) Not changed

Q4. Specify reasons as to why external providers are used, especially in areas where they
are used the most?
a) Cost Saving
b) Time Saving
c) Access to better technology
d) Lack of internal HR staff

Q5. What factors are generally considered while choosing HR outsourcing vendors?
a) Proven Track Record
b) Cost of services
c) Guaranteed service levels
d) Flexible Contract Options
e) Recommendations from other companies
f) Niche in a specific area
Q6. What do you think are the skills required by HR practitioners today?

a) Multitasking
b) Analytical skills
c) Discretion & business ethics
d) Strategic & team orientation
e) Dedication to continuous improvement
Q7. Does HRO affect the internal customer satisfaction of the outsourcing company
anyhow?

a) Motivational level- (i) Increases (ii) Decreases

b) Attitudinal change- (i) Positive (ii) Negative
c) Handling Employee grievances
d) Personalizing company value systems
Q8. Does it affect the productivity of the outsourcing company?
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 a) Marginal Increase
b) Increases
c) Constant
d) Decreases
e) Marginal Decreases
Q9. Which of these HRM services are provided by your organization?

a) Providing Temporary staff

b) Recruitment & selection
c) Training & Development
d) Managing Payroll systems
e) Managing benefits
f) Managing health & welfare functions
g) Managing employee contracts (legal advice)
h) Employee Communications
i) Strategic Consultation

Q10. Which ones are the most employed?

a) Providing Temporary staff

b) Recruitment & selection
c) Training & Development
d) Managing Payroll systems
e) Managing benefits
f) Managing health & welfare functions
g) Managing employee contracts (legal advice)
h) Employee Communications
i) Strategic Consultation

Q11. In terms of providing HRO services to your clients, which of the following are simple
to manage and which among these is complicated?

SIMPLE NEUTRAL COMPLICATED

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 a) Increasing the strategic ability of

the HR department of the organization.

b) Establishing a good rapport/ trust

with the HR department

c) Improving the self- service functionality

of the HR department

Q12. Have clients asked you for input on restructuring their HR strategy?

a) Yes
b) No

ANNEXURE-II

 Outsourcing: A transfer (or delegation) to an external service provider the operation

and day-to-day management of a business process that is long-term in nature and results-
oriented.

 Near shoring: Restructuring a company's workforce by moving jobs to a nearby

foreign country.

 Offshore outsourcing (off shoring): The outsourcing of any operation to a firm

with a principal base of operation outside the country.

 Total HR outsourcing: Outsourcing all or most of the internal HR function to a

single, external service provider. Typically, internal HR then shifts to a role of providing
human capital strategy within the organization, while also managing the relationship with
the outsourcing firm and evaluating the services it provides.

 "X"-sourcing: There is an extensive list of words used in conjunction with the word

“sourcing” that suggests a specific approach. Strategic outsourcing, Tactical outsourcing,
HRO and HR-BPO are just a few. Each has a slightly different meaning intended by the
person using it to connote a slightly different approach to outsourcing.
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 Zero-based sourcing: When the sourcing decision for each aspect of a business’s
operation is re-justified every planning cycle from an assumed base of zero. This
approach ensures that the organization is consistently and objectively re-testing its
internal operations against the best available external solutions.

 Administrative services organization (ASO): An organization that provides

outsourced solutions to meet the administrative and HR needs of the client with the client
retaining all employment-related risks and liabilities. An example of this would be a
professional employer organization (PEO) unbundling its services and only providing
transactional processing services.

 E-sourcing: Internet-based outsourcing that takes advantage of the application service

provider (ASP) delivery model.

 Full service Human Resource Outsourcing: Outsourcing the full employee life

cycle that includes both processes and transactions orchestrated by a single provider (also
called single sourcing). Related to Total HR outsourcing.

 Home sourcing: As a substitute for outsourcing customer service to offshore call

centers, more companies are turning to service providers that specialize in providing
home sourcing services, using home-based agents to answer calls.

 Market-driven sourcing: A market-driven approach to sourcing means that the

organization’s sourcing decisions is in direct response to the capabilities of the
marketplace of available providers. Where the organization’s internal capabilities are
superior to the marketplace of providers, the activity is performed internally; where they
are not, the activity is performed externally.

 Service provider: A company that provides outsourcing services. Terms such as

"provider," "vendor" and "partner" are often used interchangeably.

 Governance: The oversight and management of all aspects of an outsourcing

relationship. Areas of focus include change management, communications management,
performance management, operational management, risk management, strategic
management and others.

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