Human resources outsourcing models and benefits

¶ … outsourcing Human Resource needs. The writer explores five published works on the topic and concludes that outsourcing human resource needs has a place in society, but the core elements of human resources, including labor relations should remain in the company. There were five sources used to complete this paper.

Within most companies there is a need for a Human Resources employee or department. Human Resource workers are responsible for the recruitment, training, termination and benefit supervision of the employees working within that company. For most of American history, the Human Resource needs within companies have been fulfilled with an in-house paid employee, but in recent years there has been a shift to outsourcing many Human Resource functions. The trend of outsourcing has drawn fire from many who believe that the best way to handle employee decisions and supervision is to use an in house department, but those who are outsourcing their Human Resource needs point to advanced technology without the cost, the ability to handle large issues, and the reduced need for in house staffing as reasons to choose outsourcing as an option. The answer can be found somewhere in the middle. The hands on supervision of labor relations and other benefits that an in house person can provide will never be sufficiently replaced by outsourcing, however, there are duties in which the cost and time involved are better left to hired outside hands.

ADVANTAGES AND DISADVANTAGES

When it comes to outsourcing Human Resource duties there are advantages as well as disadvantages to the practice.

The advantages revolve around cost and time factors in which the company may not have the ability to handle as well as an outside company could do it. Outsourcing is not the same as temporary contract work. Outsourcing occurs when a company is hired to specifically handle particular needs for a company with no immediate plan to bring those duties back into the company (Greer, 2002). The advantages of outsourcing therefore need to be able to be sustained for a long period of time or the cost advantage must be measurable for it to benefit the company in question.

One advantage of outsourcing is the time involved. When one airline recently decided to lay off almost 100,000 its employees the legal processing of COBRA insurance paperwork was a daunting. It made sense for that company to hire an outside company for the purpose of processing that need.

Another advantage of outsourcing Human Resource duties has to do with cost. Often times outsourcing the work can provide access to technological advantages to the company without having the purchase the actual technology. The use of the programs can be significantly beneficial to the company in questions while at the same time saving money without buying the software to be used (Greer, 2002).

Disadvantages of using an outsource company for one's Human Resource needs includes the fact that the company can be come overly dependent on that source (Greer, 2002). In addition, the removal of the duties from within the company can create a distance between the employees and the employer that has the potential to reduce company loyalty.

Outsourcing Human Resources is a big issue in organizations today for several reasons.

The cost of outsourcing is in the tens of millions of dollars over a five-year period according to research studies. This cost is an important factor to consider when deciding whether or not to outsource. In addition the outsoaring of Human Resources duties used to revolve around sending out a company's paychecks, but today it involves many other responsibilities.

Often times the decision to outsource means the displacement of a significant number of company employees, and it is vital that the organization consider the decision carefully before making the move (Sinton, 2003).

The ramifications of deciding to outsource Human Resource duties reach far beyond the Human Resource department however, and because of this it is an issue that the entire corporate structure can be impacted by.

With the cost of outsourcing combined with the ripple impact that the decision to outsource has on a company overall the decision to outsource is an important one, and one that should involve deep analysis and investigation (Sinton, 2003).

The decision to outsource has an impact on the power and influence of Human Resource Departments.

As outsourcing continues to expand in the United States and elsewhere with regards to Human Resources, the market is dividing into three basic categories; technology enablers, consultants and administrative service providers (Adler, 2003).

The impact on HR departments can be seen from both an advantageous and a negative standpoint. Outsourcing frees up Human Resource professionals to work on the development of better labor relations and areas that can create a long-term profit increase for the company. The down side of outsourcing is that it does remove some of the power and influence of the company's Human Resource department from the company by spreading the duties around.

FOUR ISSUES

In making the decision to outsource Human Resource duties there are four important issues that must be examined.

Cost and business metrics like productivity, profitability and employee satisfaction.

The cost may be an initial issue but research has found it is not the most important consideration when deciding whether or not to outsource (Henneman, 2005). One of the most important considerations when it comes to the question of outsourcing is employee satisfaction. Companies, today, are contracting with outsource vendors for five to 10-year agreements, therefore it is vital that the company employees remain satisfied with the services being provided by that vendor.