The study found that mid-sized companies in North America and Europe are most likely to increase their HRO activities in 2008.
The Most Commonly Outsourced Human Resource Jobs
While the entire human resource industry is not subject to outsourcing, some particular positions within human resources are vulnerable. The most commonly outsourced human resource jobs are:
- Employee data management
- Information systems
- Contact centers
Although there is a negative stigma surrounding outsourcing in general, human resource professionals benefit greatly from having “data entry-number crunching” jobs outsourced. According to Michael Eck, vice president of Sibson Consulting, the benefits of human resource outsourcing are:
- Increased efficiency: Many corporations and organizations around the country have increased efficiency within their own workplaces by outsourcing some human resource tasks. Others are following suit and have solved many problems.
- HR professionals can be more strategic: Rather than being forced to enter data, crunch numbers, and push paper, HR professionals can focus their efforts on improving company-wide systems and procedures. HR professionals can maximize their expertise when they are relieved of administrative tasks.
- Reduced costs: Costs are reduced primarily for companies that are extremely large and inefficient. But the savings are there, freeing up capital for other ventures.
- Better technology: HRO providers keep up with technology, plain and simple. It’s their job to do so. Companies can avoid the expense of upgrading their own technology by outsourcing human resources.
There are two sides to every coin. So it is with HR outsourcing. Though there are benefits to HRO, there are some drawbacks as well, some of which may be unfounded. Regardless, the risks are present.
- Loss of control: Outsourcing any process or function does lend itself to losing control of that process or function and thus relinquishing control to an outside company. Some corporations and organizations prefer to keep all processes and functions close to home.
- Fees outweigh savings: While HRO does cut costs, come companies may not be able to justify the fees outsourcing providers charge. This may be the most true for smaller companies.
- Outsourcing stigma: Again, there is already a stigma surrounding outsourcing. Opponents of this business practice cry foul because jobs are being sent overseas to employees with considerably fewer skills and less expertise.
Outsourcing of jobs in general, not just human resource jobs, has come under scrutiny. OutsourceOutrage.com is one website where individuals express their discontent with the practice of outsourcing. Regardless of whether you agree with outsourcing or not, outsourcing is a popular business practice as this study on HRO demonstrates.