How Organizational size affects HR Outsourcing

Topics: Human resources, Management, Outsourcing Pages: 4 (997 words) Published: January 21, 2014


How Organizational Size Affects HR Outsourcing
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Introduction
In the world of today mainly ravaged by competition, organizations are left with no otherwise but to look and search for new ways of generating value. The universe has clinched the outsourcing phenomenon and companies have incorporated its principles in helping them expand into unreached markets (Abdul-Halim et al., 2009). Strategic outsourcing management is perchance the most significant tool in the management field and its frontier is the innovation outsourcing. Outsourcing may be defined as the transfer of functions previously done internally to external providers (Abdul-Halim et al., 2009). Many organizations have realized the significance of outsourcing and have begun to expand this activity to majority of their business operations. Outsourcing has been involved in manufacturing operations, logistics, research and development, human resource management, information technology, and accounting. This function has therefore become a common activity. Factors Influencing Organizations to Outsource

The organizational influences to eradicate the in-house Human Resource (HR) functions include elimination of duplication after acquisition and merger, cost reduction, and eradication of non-strategic and value added job functions. Outsourcing also allows HR experts to center on organizational effectiveness coupled with strategic and value –added job functions (Woodhall et al., 2009). Reasons to outsource are quite many depending on the organizational size and whether it is a merger or acquisition. Nonetheless, there is flexibility in allocating variable cost rather than fixed cost to HR functions and there is also concentration on main business activities (Woodhall et al., 2009).

How the Outsourcing of HR Functions Address Organizational Issues The outsourcing of HR functions has been referred to as a strategic tool available to organizations...

References: Abdul-Halim, H., Che-Ha, N., & Geare, A. (2009). The Influence of Business Strategy on the Decision to Outsource Human Resource Activities: A Study of Malaysian Manufacturing Organizations. Journal of Human Resource Costing and Accounting, 13(4), 274-293.
Thompson, P. (2008). Will HR be about strategic partnership or operational support in 2028? Personnel Today, 12.
Woodhall, J., Scott-Jackson, W., Newham T., & Gurney, M. (2009). Making the decision to outsource human resources. Personnel Review, 38(3), 236-252.
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