Human Resource Outsourcing, Relevance & Scope

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DISSERTATION REPORT

ON

HUMAN RESOURCE OUTSOURCING, RELEVANCE & SCOPE

Submitted By

Pankhuri Sinha

MBA Sec A

Under the Supervision of

Dr. Mrs. Shikha Kapoor

Faculty- Innovation

Amity International Business School, Noida

In partial fulfillment of degree of Master of Business Administration

AMITY GLOBAL BUSINESS SCHOOL

AMITY UNIVERSITY UTTAR PRADESH

SECTOR-125, NOIDA-201303, UTTAR PRADESH, INDIA


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DECLARATION

I Pankhuri Sinha hereby declare that the project report titled HUMAN RESOURCE

OUTSOURCING, RELEVANCE & SCOPE is my own work and has been carried out under

the guidance ofDr. Mrs Shikha Kapoor All care has been taken to keep this report error free

and I sincerely regret for any unintended discrepancies that might have crept into this report. I

shall be highly obliged if errors (if any) be brought to my attention.

DATE: Pankhuri Sinha

PLACE: A30101911033

MBA


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CERTIFICATE

I Dr. Mrs Shikha Kapoor hereby certifies that Pankhuri Sinha, Student of Masters of Business

Administration at Amity Global Business School, Amity University Uttar Pradesh has completed

Dissertation Report on Human Resource Outsourcing, Relevance & Scope, under my

guidance.

DATE: Dr. Mrs Shikha Kapoor

PLACE: Faculty- Innovation

AIBS


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ACKNOWLEDGEMENT

I take this opportunity to express my deep sense of gratitude to all those who have

contributed significantly by sharing their knowledge and experience in the completion of this

project work.

I am greatly obliged to Dr. Ashminder Singh Bahal, Director, Amity Global Business

School, Noida for providing me the right kind of opportunity and facilities to complete this

venture.

My heartfelt thanks to my respected Faculty Guide namely Dr. Mrs Shikha Kapoor

Without her continuous help the project would not have been materialized in the present form.

Her valuable suggestions helped me at every step.

Finally, I would also like to thank all my dear friends for their kind cooperation, advice

and encouragement during the long and arduous task of preparing this report and carrying out the

project work.

At last but not the least, who are always at the top of my heart, my dear family members

whose blessings, inspiration and encouragement have resulted in the successful completion of

this project.


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ABSTRACT

Today, every organization is aiming at achieving productivity by enhancing return onInvestments and achieving the economies of scale. In this context, it makes sense to focus onlyon the organizations core competencies and outsource non-critical business activities. Therefore,routine administrative work, although important, can be outsourced to third party vendors.

With more and more companies looking to rationalize employees on their payroll, HumanResource outsourcing is slowly becoming the new buzz in India.

Companies to whom organizations outsource their Human Resources function possess theknowledge and resources to expertly perform part or all of a clients' human resources function,allowing the client to streamline their internal processes and concentrate on generating profit in

their core business.

Companies who havent joined the HR outsourcing bandwagon are either unfamiliar with theprocess and procedures of HR outsourcing, or are unaware of the players operating in the area orare unaware of the probable value obtained from doing so.

HR Outsourcing market is increasing worldwide ($51 billion) representing approximately 39percent of the total business process outsourcing revenue.

If an organization decides to outsource its non-core HR activities, it must not only be guided bythe cost factor alone, but also look for a cultural fit, and a commitment to quality. One must look

into the range of services, which a vendor is going to offer, and what are its expertise, experiencein offering such services, resources, and flexibility of its contracts.


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TABLE OF CONTENTS

Chapter 1 Introduction

1.1 Literature Review......91.2 Purpose of the Study.................121.3 Objectives of the Study.12

Chapter 2

2.1 Human Resource Outsourcing....14

2.2 Services offered..16

2.3 Advantages & Disadvantages.17

2.4 Future scope of HR Outsourcing22

Chapter 3 Research Methodology

3.1 Research Design .................24

Chapter 4 Analysis & Findings...26

Chapter 5 Suggestions and conclusion

5.1 Suggestions..40

5.2 Conclusion...41

BIBLIOGRAPHY&WEBLIOGRAPHY..42

ANNEXURE I...43

ANNEXURE II.47


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1.1 Literature Review

Outsourcing is contracting with another company or person to do a particular function. Almost

every organization outsources in some way. Typically, the function being outsourced is

considered non-core to the business. The outside firms that are providing the outsourcing

services are third-party providers, or as they are more commonly called, service providers.

Although outsourcing has been around as long as work specialization has existed, in recent

history, companies began employing the outsourcing model to carry out narrow functions, such

as payroll, billing and data entry. Those processes could be done more efficiently and therefore

more cost-effectively, by other companies with specialized tools and facilities and specially

trained personnel. Currently, outsourcing takes many forms. Organizations still hire service

providers to handle distinct business processes, such as benefits management. But some

organizations outsource whole operations. The most common forms are:

Information technology outsourcing (ITO) Business process outsourcing (BPO).

Business process outsourcing encompasses call center outsourcing, human resources outsourcing

(HRO), finance and accounting outsourcing, and claims processing outsourcing. These

outsourcing deals involve multi-year contracts that can run into hundreds of millions of dollars.

Frequently, the people performing the work internally for the client firm are transferred and

become employees for the service provider.

The process of outsourcing generally encompasses four stages:

1) Strategic thinking, to develop the organization's philosophy about the role of outsourcing in

its activities;

2) Evaluation and selection, to decide on the appropriate outsourcing projects and potential

locations for the work to be done and service providers to do it;


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3) Contract development, to work out the legal, pricing and service level agreement (SLA) terms;

4) Outsourcing management or governance, to refine the ongoing working relationship between

the client and outsourcing service providers.

In all cases, outsourcing success depends on three factors:

Executive-level support in the client organization for the outsourcing mission; Ample communication to affected employees; The client's ability to manage its service providers.

The challenges of outsourcing become especially acute when the work is being done in a

different country (off shored), since that involves language, cultural and time zone differences.

The 5 Ws of Outsourcing are:

Who should outsource? Why should a company Outsource? What should a company Outsource? When should a company Outsource? Where should a company outsource?

To sum up, we can say that outsourcing gives:

The competitive edge - through sophisticated technology and people Support to do tasks faster, better and cheaper


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Operational efficiencies without capital investment Leading-edge e-businessinfrastructural support and facilities

Management Better performance

Lower cost Security Process maturity


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1.2 Purpose of the StudyTo enhance the grip of Human Resource Outsourcing. The purpose of the undergone research is

to study the Human Resource Outsourcing and to evaluate the importance, organizations

perception with the kind of outsourcing being followed in the organization.

This research is aimed at analyzing the current state of the HR Outsourcing market in India and

the trends that are prevalent in the same.

1.3 Objectives of the StudyThe objective of this research is to study the HR outsourcing practices followed by the

companies in order to understand its relevance in current scenario and its scope in future. Also

try & find out the advantages & disadvantages of outsourcing.

This research is accomplished to know the perception of organizations about outsourcing.


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2.1 HR Outsourcing

Human resources are the most critical assets of any organization as the organization's success

lies in their hands. It is the process in which a company uses the services of a third party to take

care of its HR functions. A company may outsource a few or all of its HR related activities to a

single or combination of service provides located in offshore destinations.

The debate on human resource (HR) outsourcing is polarized. HR outsourcing is seen as an

opportunity for the HR function by some and as a threat by others. The first school of thought

suggests that HR outsourcing is an instrument creating time for HR to become a strategic

partner. The second view considers HR outsourcing as a cost-cutting instrument gradually

reducing HR staff. The purpose of this study is to examine whether HR outsourcing is a

manifestation of a strategic HR focus, a cost-cutting HR focus or both.

In this sense the HR outsourcing service providing firms or HR outsourcing company can

be divided into four categories depending on the services they offer as:

1. PEOS (Professional Employer Organizations) - Assume full responsibility of acompanys HR functions.

2. BPOS (Business Process Organization)3. ASPS (Application Service Providers)4. E- SERVICES

They Provide:

Web based HR solutions like database maintenance, HR data warehousing, Maintaining records, Developing and maintaining HR soft wares etc.

HR outsourcing can happen in HR functions like:

Payroll administration (Producing checks, Handling taxes, Dealing with sick-time andVacations),

Employee benefits (Health, Medical, Life insurance, Cafeteria, etc),


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Human resource management (Hiring and firing, Background interviews, Exit interviewsand Wage reviews),

Risk management, etc.Outsourcing has become a common response to manage people and technology resources

strategically, enhance services, and manage costs more effectively.

HR service provider can not be effective if clients assume the provider can serve without their

input. Although the provider does relieve the administrative burden, there still must be a working

relationship based on communication and cooperation.


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2.2 Services offered by Human Resource Outsourcing firms

The basic services offered may include:

Overseeing organizational structure and staffing requirements. Recruiting, training and development. Tracking department objectives, goals and strategies. Benefits administration. Employee orientation programs (Businesses who outsource HR are typically small to

midsize firms with between 25 and 1,500 employees).

Providing with skilled professionals who are focused specifically on HR. Helps to reduce and manage operating costs. Improving employee relations

The specific services of these firms include:

Training, Payroll administration, Employee database management, Employee retention, Employee benefits and a lot more Implementing a human resource information system. Creating or updating employee handbooks and policy manuals. Developing and implementing a compensation program. Creating or reviewing a Performance Appraisal System. Writing and updating affirmative action plans. Providing sexual harassment training REFERRALS, the YELLOW PAGES and the

WEB are the best resources for finding an HR outsourcing provider.


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2.3 Advantages & Disadvantages:

ADVANTAGES

1. Cost savings: The cost of business activities outsourced to a provider can be less than the cost of in

sourcing the same activity.

Can turn fixed costs (assets) into variable costs (leasing agreements). Can reduce non productive assets on balance sheet. When external financing is too costly to invest in a capital expansion, a firm can

outsource the need for the capital investment.

Client firm becomes part of the outsourcing providers network or supply chain, helpingto reduce costs for both parties.

2. Gain outside expertise: Gain access to a broad base of expertise & skills unavailable by in sourcing. Outsourcing can be a source of original ideas for improvements in core & non- core

competency services & products.

3. Improve service: Can provide the flexibility to transform the organization to be more efficient. Reduced costs resulting from outsourcing can increase customer value & satisfaction. The psychological impact of outsourcing some business activities tends to motivate

remaining client organization employees to work harder in an effort to retain their jobs.

Can be used to rapidly introduce new products & services in order to meet shiftingcustomer demand.

Can be used to introduce new technologies or systems incrementally into the clientorganization.

Can help new products achieve a faster time to market. Can help a client firm develop & gain access to new distribution channels quickly.

4. Focus on core competencies: Allows the client firm to focus efforts on outputs & outcomes, while the provider focuses

on inputs & processes.

Frees up assets to reallocate to core competencies.


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Provides the client firm the discipline to identify & learn what their core competenciesare, & in doing so, aids strategic planning.

Client firms can gain unique market access & business opportunities that the outsourceprovider brings with them.

Client firms may find they have outsource capacity that they can sell to other firms. Outsource provider brings their core competencies to the client, help helping the client

maintain state- of- theart performance.

5. Gain outside technology: Can outsource to state- of-theart providers instead of retaining older legacy systems. Can help client firm personnel learn newer technology.

6. Other advantages: Can offer client firm employees an alternative career path, since the outsource provider

may offer better opportunities for advancement.

Client firms can improve their image by association with an outstanding outsourceprovider.

Can mitigate risk by transferring problems with human resources, technology, & systemsto the outsource provider.

Changes the culture of a client firm to be more productive. Can be used as a strategy for downsizing or reengineering a client firm. Separation of outsource client & provider may benefit the client firm in situations where

customers will inevitably have complaints.

Allows the client firm to conserve capital to invest in core competencies. Outsource provider can serve as a de facto branch of a client firm, which can thus avoid

gong international & also the complexity of dealing with currency & language issues,

multinational accounting problems, etc.

7. Increased profits: Takes advantage of currency exchange rates to benefit the client in contracts with foreign

outsource providers.

Greater profits because the cost of business activities outsourced to a foreign provideroperating under less restrictive laws can be considerably less than in sourced costs of the

client firm.


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8. Improved operations: Takes advantage of outsource provider foreign markets for raw materials & labor

otherwise unavailable to client firm.

9. Improved markets: Protect home country markets from imports, since it takes advantages of lower cost

foreign labor & materials.

A first step & learning experience for the client firm in gong international. what betterway to learn about running a foreign operation, expansion into foreign markets , & taking

advantages of all the other benefits a foreign location has to other than to work closely

with outsource providers in that country.

DISADVANTAGES

1. Increased costs: Lag time n service from outsource provider due to distance can add substantially higher

delivery costs to clients customers.

Can be costly & difficult to change outsourcing agreements without costly penalties. Excessive transition costs for provider training. The expense of negotiating, maintaining, & enforcing outsourcing agreements may

outweigh the benefits.

2. Loss of control: A dependence by the client on the outsource provider can lead to a variety of problems. Loss of flexibility in controlling business activities, final product, by client managers. Lack of contractual flexibility.

3. Negative impact of employees: Negative impact on client firm employees morale when they become outsource provider

employees.

Causes organizational restructuring, resulting in dislocation & social costs for employees.


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4. Negative impact of customers: Lag time in service from foreign outsource provider may delay delivery & increase costs

to the client firms customers.

Can disrupt operations during the transition of the outsourced activity from client tooutsource provider.

5. Difficulties in managing relationship: Can be difficult to quantify the advantages of outsourcing. Design changes in products can be more difficult when ordered from a distance. Excessive investment of time in building a relationship with the outsource provider. Outsource provider may be unable to communicate difficulties & opportunities.

6. Other risks: Sharing knowledge with an outsource provider who may later share it with a competitor. Can be costly & difficult to reverse outsourcing decisioning terms of recruiting personnel

in the longer term.

Outsource provider may fail to achieve client objectives. All of the outsourcers risks are also assumed by the client firm. Requires an alliance with an undesirable provider. Outsourcing business activities may cause the client firm to lose its corporate knowledge

within the firm over time.

Weakens innovative capacity n the longer term. Failure in outsourcing can mean the eventual failure of client firm. Outsourcing can result in security or confidentiality breaches.


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OUTSOURCNG RISKS THAT WILL LEAD TO BUSINESS FAILURE:

TYPE OF RISK ISSUE DESCRIPTION

Customer complaint issues Client firm customers complaints are elevated

by move to outsource provider.

Security issues Sending individual & corporate accounting

records to foreign countries may open the firm

to substantial security & confidentiality risk.

Employee issues Outsource providers may fail to listen to their

own employees.

Client- provider relationship issues Not building relationships, taking a passive

role managing the outsourcing project, & poor

understanding of outsourcing benefits & costs,

advantages & disadvantages.

Cost issues Cutting the costs on the outsource provider

results in the provider reducing service to the

client.

Government issues Changes in laws & regulations can reduce cost

advantages of outsourcing.

Structural issues Experiments and different types of outsourcing

may fail n longer terms.


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2.4 Future scope of HR outsourcing:

India, with its intrinsic advantages such as low cost, ready pool of English speaking manpower

and geographic positioning, is emerging as a viable destination for HR outsourcing companies to

set up their businesses.

Issues like quality and trust needs to be addressed properly. Experts say the basic reasons

hampering the growth of HR outsourcing in India are confidentiality and cost factors. Moreover,

the fear of losing jobs, losing control over confidential data, ethics and quality of outsourcing

vendors, security breaches and overall confidence in the vendors deters many organizations.

However, the future seems to be very promising. It's set to become a $ 51 billion market

worldwide in 2005, representing 39 per cent of the total business process outsourcing revenue.

Estimates show that the latent size of HR outsourcing in India is about $ 2 billion with a current

market of $ 27 million and it is growing at an alarming rate of about 50 per cent. India has

immense potential as more than 80% of fortune 1,000 companies are discussing HR outsourcing

as a way to cut costs and increase productivity.

Right now, India is barely skimming the surface of the HR outsourcing market potential. Indian

life Hewitt (ILH), FIDELITY, EXULT and MAFOI are some of the prominent HR outsourcing

services providers in India and the clients include giants of manufacturing, software and service

industries like GE Capital, Ford Motors, Hyundai Motors, Satyam Group, Infosys, Enron etc.


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3.1 Research Design

This research is accomplished to know the perception of organizations about outsourcing. For

fulfilling these objectives I have made questionnaire and asked industry HR experts about their

viewpoints. The primary data is collected in Delhi and NCR.

I. RESEARCH DESIGN:The research is exploratory.

Reason I chose this research design to know various viewpoints of industry experts about human

resource outsourcing.

II. DATA COLLECTION METHODS:Primary data collection- Through questionnaire.

Secondary data collection- Through Internet and magazines.

III. RESEARCH INSTRUMENT:Close ended questionnaire have been used for collection of primary data.

Explanatory questions were asked to know the industry experts viewpoints.

IV. ANALYSIS TOOL:MS EXCEL

V. SAMPLING:Random sampling is applied.

Sample size- 100


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Q1. Are you a HR service provider or outsourcer?

Out of 100 respondents 43% are the HR outsourcing service providers & the rest (57%) are the

HR service outsourcer.

This shows that the demand of HR outsourcers is more than the service providers. Outsourcing

basically involves Payroll administration, Employee benefits, Human resource management, risk

management.


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Q2.On a 5-point scale state what have been the trends in use of HRO in the

past 3 years?

Be it providing HR outsourcing or service providing there has been a constant increase of

seeking HR outsourcing n the past 3 years. Trend has been so that every aspect of outsourcing

has seen a marginal increase or constant increase.


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Q3.How has the use of external providers changed the work of the HR

department?

63.40% out of 100 are of view that HR outsourcing providers have lessened the burden of HR

department & have changed the course of work being done in & through HR department. They

can now focus on Cost savings, gaining outside expertise, improved service, Focus on corecompetencies, gaining outside technology.

Q4. Specify reasons as to why external providers are used, especially in areas


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where they are used the most?

This was a very difficult question to answer by the HR service providers & outsourcers as there aremany reasons for various companies to adopt such a process.

Out of the 100 people 30.76% understand its reason to be cost saving & another 30.76% call it to bethe access to better technology. 23.07% think HR outsourcing is used so as to save time of HRdepartment & 15.41% seek its reason to be the lack of internal workforce.

Q5. What factors are generally considered while choosing HR outsourcing


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vendors?

This question has again many implications for many Outsourcing vendors. It totally depends on

companys requirements what do they seek in HR service providers & accordingly they chose a

vendor.

However 30.76% out of 100 consider the guaranteed service levels as the most important criteria

for choosing HR outsourcing vendors.

Q6. What do you think are the skills required by HR practitioners today?


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There is a close competition between three aspects i.e. discretion & business ethics, strategic &

team orientation, multitasking. According to HR service providers apart from these skills other

skills required totally depends on organizational demands & work practices.

Q7. Does HRO affect the internal customer satisfaction of the outsourcing

company anyhow?


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The statistics show that the motivational level after implementing Human Resource Outsourcing

increased. However people were almost equally demotivated following the implementation of

Human Resource Outsourcing.

Attitudinal change observed on the positive side was more than the negative side. People in most

of the organizations are satisfied with the implementation of Human Resource Outsourcing. This

brings a change in their thinking & aptitude. Also they can concentrate on the core activities of

the company.

This also affects the employee grievance handling & also personalizing companys value

systems.

Q8.Does it affect the productivity of the outsourcing company?


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36.50% out of 100 are of the view that productivity in terms output & results increases after seekingfor outsourcing services as they can concentrate more upon various other functions of the company.


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Almost every HR service providing firm provides all the above mentioned features to anyoutsourcing service seeking firm.

Q9. Which of these HRM services are provided by your organization?


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Q10. Which ones are the most employed?

To manage employee legal contracts or to give legal advice is the most sought after outsourcing

service.After this all of the above mentioned outsourcing activities follow with a close

percentage of being most employed.


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Q11. In terms of providing HRO services to your clients, which of the following

are simple to manage and which among these is complicated?

However all the three factors are Important as well as difficult to maintain for a company with aoutsourcing firm but then increasing the strategic ability of HR department is what is to be consideredto be most complicated & then follows establishing a good rapport/ trust with the HR department &then Improving the self service functionality of HR department.


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Q12. Have clients asked you for input on restructuring their HR strategy?

For this question majority of HR service seeking clients have asked their HR service providers

for outsourcing services & restructuring of their HR strategy.


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4.1Suggestions Companies ready to address the necessary transformation of their HR processes will find

that outsourcing will bring access to world-class processes, competitive advantage, and

increased shareholder value.

Technology compatibility, confidentiality and cost are other challenges that both sidesmust work on.

Mutual trust is critical, as it's a long haul commitment. It is imperative that seniormanagement is involved right from the beginning and also drives the initiative. In

addition, a clear understanding of requirements and expectations from both sides is an

important platform in building the relationship.

Compatibility in culture and values along with an open and flexible approach go a longway in ensuring that the outsourcing venture is a successful one.

Renewals are the big news in human resources outsourcing. The economic turbulence is atremendous opportunity for HR leaders to come back in a new, more focused, and more

impactful way. Economic modeling, corporate governance, strategic marketing -- all will

become part of the new HR professionals' tool kit.

Outsourcing is becoming more sophisticated. Customers are looking for business processexcellence, speed to market, improvement in quality, benchmarking to world-class

standards. CEOs are involved to ensure the long-term success of strategic off shoring

decisions. On their part, suppliers understand that they mustcompete globally and that

outsourcing will play a more transformational and strategic role for the client.

India can collaborate with other countries to leverage local knowledge of the businessenvironment and language skills while providing its domain knowledge and technological

expertise for successful outsourcing.

Global HR benefits deals will become a reality as suppliers develop the technology toprovide a centralized look.

HR processes will converge and no longer be separate event.


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4.2 ConclusionThe outsourcing market is beginning to see HR as a preferred choice Rapidly changing market

dynamics and global competitive pressures have caused organizations to spend more time

focusing on their core business. Organizations are fast realizing that they can't be all things to all

people. As a result, human resources outsourcing is becoming increasingly prevalent. The

number of companies outsourcing HR activities continues to rise, and the scope of outsourced

HR activities continues to expand. HR outsourcing can happen in HR functions, like payroll

administration (producing checks, handling taxes, dealing with sick-time and vacations),

employee benefits (Health, Medical, Life insurance, Cafeteria, etc), human resource management

(hiring and firing, background interviews, exit interviews and wage reviews), risk management,

etc. Outsourcing has become a common response to manage people and technology resources

strategically, enhance services, and manage costs more effectively.

India, with its intrinsic advantages such as low cost, ready pool of English speaking manpower

and geographic positioning, is emerging as a viable destination for HR outsourcing companies to

set up their businesses.

Experts say the basic reasons hampering the growth of HR outsourcing in India are

confidentiality and cost factors. Moreover, the fear of losing jobs, losing control over

confidential data, ethics and quality of outsourcing vendors, security breaches and overall

confidence in the vendors deters many organizations. The biggest problem - and this is why the

HR outsourcing industry in India is on the back foot - is the government and the industry's failure

to tackle issues like data security and data privacy. This is where Indian HR outsourcing

companies face a major handicap. The Indian government is still grappling with drafting a data

protection law designed to quell growing privacy concerns from their offshore clients.

India has immense potential as more than 80% of fortune 1,000 companies are discussing HR

outsourcing as a way to cut costs and increase productivity.

Experts believe that in present times HR outsourcing is undergoing a transition phase, it wouldstill be sometime before we see increased levels of HR activities being outsourced to India aslack of domain knowledge and quality are some of the critical issues.

Till that time, HR outsourcing in India remains to be a gold mine waiting to be unearthed.


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BIBLIOGRAPHY

1. Delmotte, Jeroen1, (2008). HR outsourcing: Threat or Opportunity? Personnel Review,37 (5), 543-563.

2. Outsource HR to Achieve Value (2001) Practical Accountant; Small Business Service,pSR.11-SR.11, 1p

3. Most firm Support HR outsourcing, HUMANRESOURCES FEATURE SECTION,WESTCHESTER COUNTY BUSINESS JOURNAL, MAY 3, 2004, p29

4. Claude Solnik, Rising tide of regulations promotes HR outsourcing, consulting, LongIsland Business News (Ronkonkoma, NY); 10/07/2005

WEBLIOGRAPHY:

1. http://www.bizbrim.com/outsourcing/hr-outsourcing.htm2. http://www.hrmguide.net/buscon1.html3. http://www.induction.to/outsourcing/4. http://www.hroutsourceorganization.com/
http://www.bizbrim.com/outsourcing/hr-outsourcing.htmhttp://www.hrmguide.net/buscon1.htmlhttp://www.induction.to/outsourcing/http://www.hroutsourceorganization.com/http://www.hroutsourceorganization.com/http://www.induction.to/outsourcing/http://www.hrmguide.net/buscon1.htmlhttp://www.bizbrim.com/outsourcing/hr-outsourcing.htm


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Q1. Are you a HR service provider or outsourcer?

a) Providerb) Outsourcer

Q2. On a 5-point scale state what have been the trends in use of HRO in the past 3 years.

a) Marginal Increaseb) Increasedc) Constantd) Decreasede) Marginal Decrease

Q3. How has the use of external providers changed the work of the HR department?

a) Extensively changedb) Marginally Changedc) Changedd) Not changed

Q4. Specify reasons as to why external providers are used, especially in areas where they

are used the most?

a) Cost Savingb) Time Savingc) Access to better technologyd) Lack of internal HR staff

Q5. What factors are generally considered while choosing HR outsourcing vendors?

a) Proven Track Recordb) Cost of servicesc) Guaranteed service levelsd) Flexible Contract Optionse) Recommendations from other companies


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f) Niche in a specific areaQ6. What do you think are the skills required by HR practitioners today?

a) Multitaskingb) Analytical skillsc) Discretion & business ethicsd) Strategic & team orientatione) Dedication to continuous improvement

Q7. Does HRO affect the internal customer satisfaction of the outsourcing company

anyhow?

a) Motivational level- (i) Increases (ii) Decreasesb) Attitudinal change- (i) Positive (ii) Negativec) Handling Employee grievancesd) Personalizing company value systems

Q8. Does it affect the productivity of the outsourcing company?

a) Marginal Increaseb) Increasesc) Constantd) Decreasese) Marginal Decreases

Q9. Which of these HRM services are provided by your organization?

a) Providing Temporary staffb) Recruitment & selectionc) Training & Developmentd) Managing Payroll systemse) Managing benefitsf) Managing health & welfare functionsg) Managing employee contracts (legal advice)h) Employee Communicationsi) Strategic Consultation


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ANNEXURE-II

Outsourcing:A transfer (or delegation) to an external service provider the operationand day-to-day management of a business process that is long-term in nature and results-oriented.

Near shoring:Restructuring a company's workforce by moving jobs to a nearbyforeign country.

Offshore outsourcing (off shoring): The outsourcing of any operation to a firmwith a principal base of operation outside the country.

Total HR outsourcing: Outsourcing all or most of the internal HR function to asingle, external service provider. Typically, internal HR then shifts to a role of providing

human capital strategy within the organization, while also managing the relationship withthe outsourcing firm and evaluating the services it provides.

"X"-sourcing:There is an extensive list of words used in conjunction with the wordsourcing that suggests a specific approach. Strategic outsourcing, Tactical outsourcing,

HRO and HR-BPO are just a few. Each has a slightly different meaning intended by theperson using it to connote a slightly different approach to outsourcing.

Zero-based sourcing:When the sourcing decision for each aspect of a businesssoperation is re-justified every planning cycle from an assumed base of zero. Thisapproach ensures that the organization is consistently and objectively re-testing itsinternal operations against the best available external solutions.

Administrative services organization (ASO): An organization that providesoutsourced solutions to meet the administrative and HR needs of the client with the clientretaining all employment-related risks and liabilities. An example of this would be aprofessional employer organization (PEO) unbundling its services and only providingtransactional processing services.

E-sourcing: Internet-based outsourcing that takes advantage of the application serviceprovider (ASP) delivery model.

Full service Human Resource Outsourcing:Outsourcing the full employee lifecycle that includes both processes and transactions orchestrated by a single provider (alsocalled single sourcing). Related to Total HR outsourcing.


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Home sourcing:As a substitute for outsourcing customer service to offshore callcenters, more companies are turning to service providers that specialize in providinghome sourcing services, using home-based agents to answer calls.

Market-driven sourcing:A market-driven approach to sourcing means that theorganizations sourcing decisions is in direct response to the capabilities of the

marketplace of available providers. Where the organizations internal capabilities aresuperior to the marketplace of providers, the activity is performed internally; where theyare not, the activity is performed externally.

Service provider:A company that provides outsourcing services. Terms such as"provider," "vendor" and "partner" are often used interchangeably.

Governance:The oversight and management of all aspects of an outsourcingrelationship. Areas of focus include change management, communications management,performance management, operational management, risk management, strategicmanagement and others.

Date post:	03-Apr-2018
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Human Resource Outsourcing, Relevance & Scope

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