19 October 2017

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Outsourcing: Smart Way of Doing Business

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We are living in smart times where the order of the day is smart living, smart thinking and last but not the least smart working as well. Smart working is again a very concrete resultant of smart thinking. Outsourcing is just one of those miracles of smart thinking in recent times that has delivered results like never before.

Outsourcing has its existence from the ancient times and the only thing that has changed is that with the technological developments and continual increment of work pressure had made organisation to look at it from a different and from a point of view of indispensable importance.
 
Before we delve deep into the concept of Human resource outsourcing, it is necessary to explain what the term “outsourcing” actually stands for. Outsourcing can be stated to be a process of subcontracting a service to a third party company. This decision of whether outsourcing the particular work or doing it in-house is based upon factors like lower production cost, utilisation of resources, information technology and land resources.

Outsourcing if viewed  in the traditional light of the concept of division of  labor it would in every way be a right evaluation .Outsourcing as stated previously is done on a contractual basis and defines the transfer subjects. Under the agreement the transferor acquires in the form of a transfer of people, assets, and resources from the client. The typically outsourced aspects of a business organisation are information technology, human resource, facilities, real estate management and accounting.

Human resource department, to begin with is probably the most important department in any business organisation. Employees are always the most essential feature of a company because no matter how technologically predominant the present day working scenarios might be, it’s the human resource of an organisation that still remains indispensable.

Like any other forms of outsourcing human resource is also outsourced following the basic laws and natures of the conception. But there are some businesses that are resourcefully and financially less than capable of dealing with the nitty gritties of Human Resource management. In such cases these organisations plan to offload certain aspects of their work to a different unit.

These departments will be monitored by the administration team or can be outsourced to a third party company. Having said that, it must also be mentioned that what particular aspects to outsource and to whom to outsource is a major decision in itself.

In most cases the human resource functions include 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 (workers’ compensation, dispute resolution, safety inspection, office policies and handbooks) and others. To be simple, every aspect that is related to the employee will be outsourced in most conditions. The companies used to outsource it fully because, outsourcing only one or two activities will lead to confusion in administration. Hence, it is always the best to outsource the entire functionality to have a clear process running in successfully.

HR outsourcing Services generally fall into any one of the four categories PEOs, BPOs, ASPs, or e-services.

A professional employer organisation or the PEO happens to take particular legal responsibilities for the employees. In most scenarios the business units and the Professional Employer Organisations are partners with the PEO handling Human Resource and the business handling all other aspects .A business process outsourcing refers to all fields but for HR a BPO would have access to the latest of all technologies. To name some of these technological facilities, they would include Application service providers, Human Resource software on the Web and rent it to the users. There must be options of E-Human resource services .These services are the ones that are Web-based.

Having discussed the above ,there are a few other things that deserve a discussion out there .What exactly have led to this surge of human resource outsourcing in the present day world. Experts are of opinion that rapidly changing market dynamics and global competitive dynamics have led to focusing of business organisation on their core business more than anything else. But doing that had brought in a relative negligence towards their manpower resource, something that couldn’t have been allowed under any possible circumstance. Thus the leading industries have decided at what they are good at focusing on their core competency and leaving the rest on outsourcing.

 

Last Updated ( Monday, 05 July 2010 17:05 )  

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