Essay Title: 

Human Resources Outsourcing

March 24, 2016 | Author: | Posted in labor studies, social sciences

Human Resources Outsourcing


Myra Harris

October 1 , 2006


Human Resources Outsourcing

I . This should be your Context of the Problem

In today ‘s fierce competition in business , corporations need to generate more revenue creatively while keeping cost of sales at minimum level without scarifying efforts . Michael Porter refers this current competition as `hyper competition , which he thinks it best describes the intense development of business today . Amidst highly demanding consumers , companies spawn new methods and uncharted techniques to gain the lead within their industries p [banner_entry_middle]

Concerning the need to reduce costs , enterprises strive for finding the best methods to increase revenue while keeping costs as low as possible While the technology advancement can help enterprises to reach economy of scale , outsourcing of employees (human resources ) can be the attractive savior for them to keep their fixed costs , which contributed by cost of employees and researches to name a few , to reach minimum level

Many believed that outsourcing is a breakthrough that will adjust the way corporations manage their human resources in the future although some may have problems in differentiating outsourcing with employer-vendor relationship , but the bottom line is outsourcing involves a degree of two-way relationship , including information exchange and coordination . In addition , there are also those who reveal the economic threats that come along with the outsourcing method

Outsourcing is an activity to transfer existing business function to external provider that includes delegating the functions of relevant physical and human assets toward external providers . While outsourcing provides attractive benefits for employers , they should consider many potential drawbacks including the different culture between employers and the outsourced personnel

II . Statement of the Problem

Outsourcing involves transferring significant amount of management control and decision making to the chosen outsourcing provider Fortunately , in the Internet era where any documentations process is exchangeable over the Internet and jobs can be discussed via e-mail or instant messaging , outsourcing-typed employment model have proved to promote significant savings

According to McKinsey Co , Internet-enabled services (ITES ) market is likely to touch 142 billion in 2009 . There would be a net saving about 390 billion from current 532 billion for these services (Kurian 2003 . U .S . can fulfill the net saving through off shoring to other countries , y like India

Dookril (2004 , in general , says there are two main advantages that companies obtain by outsourcing

Focusing on Core Competencies

This is the most common reason to outsource in which the company can focus and develop its core competences although some companies also outsource their core functions in to gain better competitive advantages in the market they serve

Lowering Cost

At a glance , outsourcing can help companies to cut additional cost associated with the employee cost like medical and travel allowance since the companies only pay in bulks to the provider of outsourcing staffs . In this situation , the company can shift the variable costs of employees into fixed costs , which in turn , enable the company to manage its cost of sales and offer competitive price to… [banner_entry_footer]

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