Application
Employer
Benefits:
1. Expense Reduction
Outsourcing one or more departments can help a company save money (Noe et al., 2010). Often the firms that are being outsourced to are more equipped to deal with the activities that are being outsourced. They may be able to combine certain actions in order to reduce costs. The outsourcing firms can minimize costs by providing experts in the outsourced field. (Elmuti, 2003; Petraco, 2008).
2. Conserves Management Time and Effort
The outsourcing firm will be able to handle all of the recurring issues that the in-house firm in ill-equipped to deal with (Davidson, 2005; Elmuti, 2003). The in-house firm will be able to spend more time and attention on the “core competencies that distinguish the organization from its competitors” (Caruth, 2013, p.192).
3. Increased Organizational Competencies
“Relieved of routine activities, management can devote more attention to primary activities of the organization” (Potkany, 2008). Upper management of the in-house firm will be able to focus its time on the activities that directly impact the bottom-line (e.g., Caudron, 2003). Managers will be able to focus on how they plan to better the company and Human Resource Managers will be able to act as counselors to top managers (Belcourt, 2006).
4. Professional Expertise
“Research by Hewitt Associates identified the ability to capitalize on outside expertise as a significant driver of US companies’ endeavors to outsource” (Ketter, 2007). An in-house human resource department may have a few HR managers that are ok at a few different things. They may have some knowledge of laws and some knowledge of benefits. However, an outsourcing firm should have numerous experts in their employment. There should be an expert on laws and an expert on benefits. The expertise found in an outsourcing firm allows for a wide range of knowledge and experiences to be at management’s disposal (Davidson, 2005; Elmuti, 2003; Galanaki and Papalexandris, 2007).
Benefits:
1. Expense Reduction
Outsourcing one or more departments can help a company save money (Noe et al., 2010). Often the firms that are being outsourced to are more equipped to deal with the activities that are being outsourced. They may be able to combine certain actions in order to reduce costs. The outsourcing firms can minimize costs by providing experts in the outsourced field. (Elmuti, 2003; Petraco, 2008).
2. Conserves Management Time and Effort
The outsourcing firm will be able to handle all of the recurring issues that the in-house firm in ill-equipped to deal with (Davidson, 2005; Elmuti, 2003). The in-house firm will be able to spend more time and attention on the “core competencies that distinguish the organization from its competitors” (Caruth, 2013, p.192).
3. Increased Organizational Competencies
“Relieved of routine activities, management can devote more attention to primary activities of the organization” (Potkany, 2008). Upper management of the in-house firm will be able to focus its time on the activities that directly impact the bottom-line (e.g., Caudron, 2003). Managers will be able to focus on how they plan to better the company and Human Resource Managers will be able to act as counselors to top managers (Belcourt, 2006).
4. Professional Expertise
“Research by Hewitt Associates identified the ability to capitalize on outside expertise as a significant driver of US companies’ endeavors to outsource” (Ketter, 2007). An in-house human resource department may have a few HR managers that are ok at a few different things. They may have some knowledge of laws and some knowledge of benefits. However, an outsourcing firm should have numerous experts in their employment. There should be an expert on laws and an expert on benefits. The expertise found in an outsourcing firm allows for a wide range of knowledge and experiences to be at management’s disposal (Davidson, 2005; Elmuti, 2003; Galanaki and Papalexandris, 2007).
Cited: Belcourt, M. (2006), Outsourcing—The Benefits and the Risks, Human Resource Management Review, 269-279. Benefits outsourcing can reduce costs, increase efficiency, (1995) Brooks, N. (2006). Understanding IT outsourcing and its potential effects on IT workers and their environment. Journal of Computer Information Systems, 46(4), 46-53. Caruth, D. L., Haden, S. S. P., & Caruth, G. D. (2013). Critical factors in human resource outsourcing. Journal of Management Research, 13(4), 187-195. Retrieved from http://search.proquest.com/docview/1503117445?accountid=12085 Caudron, S Davidson, G. (2005), Why HR Outsourcing Continues to Expand, Human Resource Management International, 13(3): 3–5. Eatough, E. M., Chang, C., Miloslavic, S. A., & Johnson, R. E. (2011). Relationships of role stressors with organizational citizenship behavior: A meta-analysis. Journal of AppliedPsychology, 96(3), 619-632. doi:10.1037/a0021887 Eglin, R Elmuti, D. (2003), The Perceived Impact of Outsourcing on Organizational Performance, Mid-American Journal of Business, 18(2): 33–41. Ferranti, M Latham, G. P. (2007). Work motivation: History, theory, research and practice. Thousand Oaks, CA: Sage Publications Lehmann-Willenbrock, N., Grohmann, A., & Kauffeld, S Logan, M. S., Faught, K., & Ganster, D. C. (2004). Outsourcing a satisfied and committed workforce: A trucking industry case study. International Journal of Human Resource Management, 15(1), 147-162. Mou, R., & Kleiner, B Noe, R. A., Hollenbeck, J. R., Gerhart, B. and Wright, P. M. (2010), Human Resource Management: Gaining a Competitive Advantage (7th Ed.), McGraw-Hill Irwin, New York. Sterling, R. (2012). Outsourcing payroll viable option for most. Canadian HR Reporter, 25(15), 22. Retrieved from http://search.proquest.com/docview/1055112101?accountid=12085 Størseth, F Suhasini, R., Rajan, N., & Sushma. (2013). Human resource outsourcing. Asia Pacific Journal of Management & Entrepreneurship Research, 2(1), 87-100. Retrieved from http://search.proquest.com/docview/1321931727?accountid=12085 Tan, H., & Lim, A Treanor, J. (2004, Oct 13). Outsourcing 'can damage a brand '. The Guardian Retrieved from http://search.proquest.com/docview/246210774?accountid=12085 Valentine, S., Godkin, L., Fleischman, G Woodall, J., Scott-Jackson, W., Newham, T. and Gurney, M. (2009), Making the Decision to Outsource Human Resources, Personnel Review, (38) (3): 236-252.