Outsourcing is when a firm contracts an independent contractor to perform certain tasks or activities. Common outsourced activities include IT, HR, manufacturing, and R&D. HR outsourcing involves an outside party performing some or all HR functions. While outsourcing can reduce costs and preserve culture, it can also result in loss of control and institutional knowledge. Managers generally outsource interactions and information gathering but not decision making. The type of outsourcing relationship depends on factors like asset specificity and uncertainty. HR outsourcing commonly includes payroll, benefits, workforce administration, and talent services like recruiting and training. Trust, confidentiality, commitment and flexibility are important factors in outsourcing relationships.

1. GROUP 2

2. Outsourcing is a strategic decision to give a task or activity to
an independent contractor who determines how best to do the
task or activity.
The firm and the independent contractor become partners and
may establish a long-term relationship.
Examples of outsourced activities: IT, HR, Legal
services, Manufacturing, R & D.
Outsourcing transactions are done in the market.

3. Human resources outsourcing is when a company gets an
outside party to perform some or all of their HR functions.
In the SHRM study, 33 percent of HR professionals who
participated believe their company will increase their use of
outsourcing within the next five years.

4. ☻Better quality.
☻Reduction in administrative costs.
☻Preserving a strong culture or employee morale.

5. ☻Loss of control
☻Loss of the opportunity to gain knowledge and information

6. Three things that managers do (Henry Mintzberg’s Nature of
Manager’s Job)
Interaction (outsource)
Information gathering/processing
(outsource)
Decision-making and problem solving (do
not outsource)

7.  The task is a core activity critical to strategy or technology.
 Task is highly interdependent with core activity due to
technology or work design.
 Task requires great deal of firm specific human capital or
access to proprietary information.
 Tasks where the employees work in close proximity to
regular, core employees and are similar socially to them.

8.  Determine the best type of relationship.
 The properties of the transaction determine the governance
structure:
 High asset specificity and uncertainty.
 Medium asset specificity.
 Low asset specificity.

9. Core HR Outsourcing Services
Payroll Administration
Benefits Administration
Workforce Administration
Leave Administration
Talent Administration HR Outsourcing Services
Relocation and Handling Assignments
Performance Management and Training
Recruiting Administration
Compensation Administration

11. Beyond cost control.
Specialization and expertise.
Focus on quality, technology and service delivery.
Outsourcing to best of class, best of industry.
Problems with technology.

12. Recruitment
Training
Performance management
Compensation
Safety
welfare
Labour contract

13.  Integration with over all strategy.
 Fragmented and piecemeal approach.
 Absence of formal outsourcing process.
 Limited cost analysis.
 Work flow, supply chain and logistics management critical to
outsourcing process.

14. a) Trust
b) Confidentiality
c) Dependency
d) Spillover risks
e) Relative proficiency
f) Strategic capability
g) Commitment
h) Flexibility

15. Provides specific knowledge and innovations.
HR outsourcing has become a core part of several organizations.
Source of business for many service providers.