Research paper hr outsourcing

When the H.R. Office Leaves the Building

What HR Functions can be Outsourced?

To test our hypothesis and answer our research question, the research methodology followed a mixed methods approach in two distinct stages. External providers can also supplement their internal resources. In , the medium size firms from 50 to employees represent HR outsourcing: the impact on HR role, competency development and relationships. Weinstein said. Wahrenburg, M.

This is attributed to the fact that human resource outsourcing is believed to be cost effective compared to contracting in-house employees to solve Human Resource problems. Companies which are faced with time constraint that they cannot manage to train their employees to address human resource needs often embrace the option of human resource outsourcing. Scholars Ulrich and Bettis et al.

Human Resources Services

Advocates for human resource outsourcing contend that companies recruiting employees must give priority to activities deemed essential for their companies survival then take leverage on activities which are considered to be peripheral. This will help the company to seek for other cost effective ways such as corroborations, pattering and where possible substitution of in-house capabilities.

Coupled with good management, this in long run can help the company to thrive despite the above noted cost effective avenues the company may have opted to practice. Elmuti gives example of such activities as payroll, administration of retirement plans and benefits awarded for administration [10]. In their article, scholars Greer, C. Human Resource Management Outsourcing: The Make or Buy decision, the two scholars contended that advantages of human resource outsourcing by far outweigh the costs and if a proper process is followed, it is more of a sure deal that the results will result into a performing Human resource team [12].

Services of third party staffers or employee also known as Employee Assistance Program are formally established and known. In this case, background check is always considered focusing on criminal searches, employment and checking the authenticity of education the candidate is claiming to have etc. While there are several factors that should be considered before making decisions in process of human resource outsourcing in banking sector, there are questions that should not miss.

The two authors further argue that outsourcing can help firms and companies to reduce operating costs within the firm Abraham, and Taylor, stressing that here the firm gives more attention to three areas namely, capital investment, fixed cost and shape as well as operating expenses [14].

Such funds saved as a result of outsourcing may also be used in other avenues such as conducting research and initiatives meant to create or find new market, which is also vital for the success of any business. The authors, Bettis, et al. In the same way, in his scholarly work, The Contracting organization: A strategic guide to outsourcing, Domberger explains that outsourcing is one of major ways how in-house skills and knowledge is lost.

The scholar adds that such loss is not just limited to loss of knowledge and skills but also the firm can easily backslide in innovation part as it will opt to rely more on outsourcing. This resonates well with other scientific studies done by different researchers. A case in point is according to a study by Berry, M. Relatedly, other scholars argue in support of the need firms to have their information kept jealously since some of information maybe sensitive.

When conducting search for example for executive, because of the positions sensitivity some firms only consider research that maybe needed to identify names of candidates deemed potential. Bettis advises that to hide such sensitive information, names of vendors names sometimes are altered and the company is left with responsibility of searching or recruiting candidates [9].

The author further explains that though some firms outsource job evaluations, salary and wage surveys, in most cases they tightly keep a secret their in-house wage and salary changes, incentives as well as other payment or compensation related information. Several scholars contend that studies have proven how employee viewpoints such as behaviour and attitude play a vital role when it comes to time organizations to make decision whether to or not to embrace outsourcing, Kessler [18].

Further, the above view is held by other scholars who contend that outsourcing human resource is not a magic bullet. Grauman and Paul argues that as a result of human resource outsourcing, the firm may be engulfed by endless conflicts between outsourced external and internal employees if not given attention [16]. The other demerit of human resource outsourcing is that in-house employees can easily feel insecure at jobs which results into lack of morale, increases cases of absenteeism which all result into low production.

This makes the employees involved to develop a sense of ownership which is good for the success of the firm since employees will give their best to deliver knowing they are considered to be important in the firm. Some scholars argue that where in-house employees are fully involved in outsourcing activities, such leaves employees within good relations and may ease routine transactional human resource activities which in long run may lead to the firs success as employees give more attention to any challenging activity at the firm as opposed to in incidences where employees are not involved in decision making prior to outsourcing thereby negative sentiments.

OUTSOURCING IN HUMAN RESOURCES – My Assignment Help : Samples & Case Study Review Sample

Scholars contend that there are there are three major models employed while outsourcing human resource namely; Professional Employer Organization PEO , Administrative Service Outsourcing ASO and Huma Resource Navigator model which are commonly known and have been used world over to meet the needs of firms and organizations.

Also Administrative Services Outsourcing or ASO which is said to be the most flexible model since it is said to best offers businesses several related services and benefits to organizations or firm sometimes without necessarily requiring a co-employment agreement is also mentioned as one of models that can be thought of often [13] [20]. Often, the main aim here is to ensure cost reduction in the running of the business.

Under human resource navigator model, the third party provider often works with an aim of realizing economies of scale with focus across several clients. In this model, professional employer organization often combine together forming a firm which works for the interests of the employer and become the manager of record for the employees.

In this case, the relationship formed aides Professional Employer Organization to assume responsivity for HR functions ranging from payroll to benefits. Some scholars have argued that, Professional Employer Organization model is popular when it comes to small and mid-sized business where outsourcing is used as a way of ensuring agreement in the business to bypass costly internal human resource department. Since other functions such as administrative function is already catered for, it is possible for small sized business to direct bigger portions of their resources to core competencies and production to ensure success of the firm.

This way, if the firm already has payroll process, HR department s can come in and enhance its Human Resource capabilities. Authors such as, Mehlman, and Heineman, argue that under the specialist model which is also known as designer model, human resource outsourcing provider often will serve as an expert or consultant by troubleshooting given human resource issues or can or will be required to overhaul the entire human resource program design.

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It is important to note that, though the provider will not be required to assume control of HR transactions, he will be required to give skills and knowledge which can be used to modernise internal process in HR department [13]. In their scholarly article Outsourcing IIR Functions: When and When Not-To Go Outside, authors Stroh and Treehuboff argues that, it is important to note that while several organizations often outsource various Human Resource activities, this much depends on how relevant to the organizations interests and strategies.

In the same way, there are several reasons why Bank of Africa Guinea engages in outsourcing certain human resource activities [21].

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Many firms prefer to outsource human resource service largely because of the need to access expert and quality services which often are readily available from external venders, such as HSBC. Though the common view is that, it is important to note that cost efficiency is not a driving factor why firms chose to go for outsourcing and hence, one can argue that, singly, low cost effectiveness in a competitive market cannot be a major factor to choose a vendor from those available offering almost similar functions but at a different cost.

In same way, Outsourcing has made UBA Bank Guinea able to engage to focus on its core functions, leaving the bank with liberty to continuously outsource some functions it deems necessary but not very much of importance in the operation of the bank which arguably allows manager s opportunity to concentrate on offering better services on core functions other than concentrating on minor sectors of the issues which may be required but not vital to the smooth running of the bank. This is in line with views expressed by Shrim, in his article Just Right Outsourcing: Understanding and Managing Risk, where the author contends that outsourcing often is seen as a way to assist Human resource professionals to involve in functions which are deemed more core to the organizations vision [7].

The two authors argue that as a result of the need to stay with control over outsourced activities, in-house employees found themselves being given responsibility to take charge of the outsourced activities which in the long run left firms in-house employees gaining skills and expertise in day-to-day running of activities they were given responsibility to overlook or supervise which helps ed them to gain knowledge and skills which is a factor as far as creating competitive advantage is concerned [20].

Human Resource outsourcing is important to affirm considering the fact that it gives firms opportunity to put funds where they are most needed while using services of obtained from cost effective Human Resource providers. Example of such services outsourced on other than investing in them is outsourcing security services 3 [22]. The above resonates well with scholars such as Elmuti who contends that many firms prefer to outsource services such as security activities, human resource and payroll activities largely because they can help the firm get a good quality labour providing first class services yet at a reasonable cost [10].

Considering the ever growing competition in banking sector, to compete favourably, banks must have better and competitive services and innovations which can only be best provided by experts. It is also important to note that growing and developing such expertise and skills internally, it takes time and a lot of resources while there are options such as getting such services from an outside provider often is cheap in terms of costs personal Interview, Some of the interviewees observed that, some functions would require bug budget to kick start yet their functions can easily be got and at a low cost since there are many vendors with such services on market which leaves some offering same services at a very low cost despite having quality services.

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The author contends that most of outsourced services by the bank include Information and Technology activities, Cleaning, Security, catering services, Security, transport, Insurance services, Training and development, and network and telephone telecommunications among others. It is important to note that the high enthusiasm in outsourcing HR by banks can be attributed to the availability of external trainers who have expertise to deliver well packaged training programs aimed at imparting such expertise to bank managers which leaves banks enticed as they are looking for the best, hence outsource such services to have their bankers trained well.

This finding resonates well with findings of other scholars such as [24]. This study further confirms that at UBA Bank Guinea , HR functions such as payroll is one of those which is hardly outsourced by UBA Bank Guinea , whereas the same bank often outsource activities which often are thought not so central or core. They include for example training of employees, and payroll administration [24]. Another notable finding at UBA Bank is that, the bank does not outsource key or strategic human resource functions such as research on Human resource management, or planning.

The above finding resonates well with findings of scholars such as Gainey and Klaas [24] ; Oza, and Hill [25]. UBA Bank Guinea has a written policy frame work that details all steps that must be followed while the bank is outsourcing services. Through competitive bidding, the bank identifies the vendor to offer the functions needed. It is important that before a contract between the company and the vendor to offer outsourcing services is signed, the management should be careful and avoid any unnecessary ambiguity in order to make the right choice and decision Grauman, and Paul [16].

At this point, the company can as well assign an executive which can be tasked with responsibility of ensuring that the outsourced vendor does not deviate from offering the services or activities asked and more importantly ensuring quality service s. It is also important to note that, other than the above, it is vital and of great benefit to the firm to ensure there is training in vendor management technics.

This is vital since it helps the firm to be able to address unforeseen challenges that may arise as a result of risks and challenges related with outsourcing [22]. In same way, during this research, the author found that UBA bank Guinea use TCE frame work and the reasons advanced for this was that Transaction Cost Economics framework best explains the question helping one to understand what conditions can a firm in this case UBA bank gain from outsourcing.

Arnold describes the four components which should be considered as; the design to be outsourced, the partner being considered to be outsourced, the subject the firm or bank considering to outsource and the object 4 the bank firm is considering to outsource. In this case, UBA Bank Guinea normally focuses on the subject under consideration for outsourcing a process that involves issues like decision making process which assess whether the idea of the bank is considering to outsource is viable or otherwise, the next step is often considering which internal activity the firm in this case the bank may consider for outsourcing.

When the H.R. Office Leaves the Building

Once the above is considered, the next step the firm or bank should consider is a suitable outsourcing partner from the pool of the available options that offer the services the firm is interested in outsourcing. The last step the firm or bank in this case should consider is formulating an outsourcing design the firm may consider most suitable.

Another observation of focus is the need UBA Bank Guinea to give attention three key structures areas while making outsourcing decisions. They are; control of management, cost of external services and strategic alliances 5.

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For firms considering outsourcing to be successful in their business, another key factor to consider while outsourcing should be to look at services offered and ensure that they are not very common. Put differently, in event that as a result of say tradable nature of outsourced provisions have less market advantage, in this case an outsourcing strategy that aims at improving market provision can be vital bringing in success. Considering findings of this study, the author authoritatively narrates that for outsourcing to be successful, it must meet the needs and goals set by the department Figure 1.

During this study, both respondents and employees of the bank noted that the bank has services and products offered in its structures. In the structure of UBA Bank. Figure 1. UBA bank Guinea decision making tree. Guinea , implementing of Human Resource outsourcing often is done with a clear guidelines starting from top level management to the least. The process is that several units in principle are expected to pass on information to other team members.

If such is not given focus, embraced by the team and done well can as well make the efforts unsuccessful. Another factor that is ably influencing human resource outsourcing at UBA Bank Guinea is the banks size as well as its capacity to raise funds needed for such activities makes the bank yearn for more innovations success thereby prompting them to for outsourcing. If a company choses to partially outsource HR, the company shares responsibilities with the vendor, sharing information and control over the functions.

If the company decides to completely outsource, the vendor takes on all HR responsibilities. The owner or HR manager in the original company takes on a new role, liaison with the vendor, focusing only on HR in order to manage the vendor-company relationship. Whether partially or completely outsourcing, companies frequently outsource the following HR functions:. When only some functions are dealt with by the HRO, a co-management relationship or shared HR relationship is made between the HRO and the business this is typically the conservative approach to those first outsourcing HR.

In large organizations, the strategic HR role remains an internal position; however, most administrative and tactical roles are outsourced. This can also be achieved in smaller organizations typically under employees using a Professional Employer Organization. A Professional Employer Organization, or PEO, handles all HR tasks and is usually more beneficial for small and mid-sized businesses under employees.

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When a business outsources HR to a Professional Employer Organization they enter a co-employment relationship in which the PEO becomes the employer of record and the company is the on-site employer. Financial liability for the small business decreases due to the shared burden. Additionally, the PEO can obtain reduced rates on retirement packages and health benefits by combining employees from all of their customers. They often offer outsourced payroll, performance management, recruiting, background screening and other various employment administrative tasks that depend on the needs of the business that hires them.

As the name aptly implies, an ASO provides administrative services for your company.