After customer care services and medical transcription, outsourcing of human resource services or HR BPO is emerging as next big opportunity for Indian BPOs with the global market in this segment estimated at $40-60 billion per annum, experts said.

"HR BPO comes to about 33 per cent of the outsourcing pie. India has immense potential as more than 80 per cent of Fortune 1000 companies will discuss offshore BPO as a way to cut costs and increase productivity," said V Chandrasekaran, co-founder of Secova eServices, the first Indian HR BPO.

Sensing the potential, global BPO players including Fidelity, Exult and Hewitt have begun setting up operations in India.

However, most HR BPO players have not leveraged the offshore advantage as yet, he told PTI.

The rest of the article can be read at http://infotech.indiatimes.com/articleshow/932152.cms

Regards
Jigar

Dear friends,

Following are the views on the raised question :

1. The question is like will robots replace human-beings? The answer is always 'since it is man who creates robots, he will always remain superior. Likewise as long as there are humanbeings in an organization there will be HR person in an organization.

2. What is being outsourced are mechanical processes of HR. Time-keeping, Security, House-keeping, Canteen, Welfare activities, Transportation, General Administration, Safety, Medical facilities, Initial screening of candidates for recruitment, imparting of training, testing (i.e. psychometric tests, etc.).

3. Another area which is being outsourced are expertises. Legal, technical (psychological counselling, domestic enquiries, Surveys, interviews, etc.) where internal HR person lacks in upgrading himself.

Outsourcing was always there in other functions, it came to HR late:

Outsourcing was always there. Cost cutting lead to outsourcing.

1. Production processes were outsourced long back.
2. Marketing was outsourced - dealer net work, agents, etc. were common thing long bnack.
3. Non-HR legal was also outsourced long back.
4. Specialized maintenance was also outsourced.

Following areas, I feel, can not be outsourced:

1. Co-ordination on behalf of Organization still remains with HR.

2. Compilation of available data, getting it discussed and facilitating decision making within the organization still remains to be an HR activity.

3. Designing basic HR frame-work still remains to be an HR activity.

4. Emergency handling of HR on site still remains to be in-house job for difficulty of logistics.

HR has to gear-up to sustain its existance:

1. If HR person is multi-disciplinary (which is a recent trend now, i.e. Engineer-HR, etc.) his value addition will be much more richer compared to only HR specialist.

2. Lack of our knowledge or ability to understand and appreciate data from other functions, at least in more than general sense, is of disadvantage to us. We need to have more than working knowledge of other functions.

3. HR is effective when there is variety of knowledge. HR's strength is his ability of having handled a situation under different circumstances. It is like doctor having performed many operations. Many a times HR personnel lacks that exposure and hence the confidence in him in the minds of the Management.

HR needs to assert itself or respect its fundamentals:

Sometimes, in fact many a times, HR is its own enemy. In the process of managing things, we ourselves try to outsmart our clan. "See, how I managed it...my colleague my predecessor could not manage it...?". It is like current Government putting down all that is done by the previous government. This is because we deal with a dynamics which can not be same in any given two situations.

We should not compromise on our fundamentals as a professional body.

However, I repeat, HR can not be outsourced to the extent that it is eliminated from Organizational scene.

Regards,

Jagadish

Dear colleagues,

The benefits of outsourcing can become easily overshadowed by its downside - loss of knowledge. This means that organizations can become anorexic, instead of lean and mean.

Outsourcing has emerged as a worldwide business megatrend. According to the Outsourcing Institute, the recent global outsourcing market totaled roughly $150 billion, and is expected to reach $318 billion by the year 2004.

Sure, outsourcing is appealing - and seductive. It allows companies to shift directions quickly, to make faster decisions, and to adopt a just-in-time-payroll. Sounds too good to be true? Perhaps. Outsourcing can do all that the proponents claim - at a price. Outsourcing robs organizations of "knowledge.

For example, look at HR, which is a major target of outsourcing - accounting for 16 percent of all outsourcing expenditures (Outsourcing Institute, 2004).

Outsourcing HR functions may work fine for the daily filling out of forms. But without HR professionals in-house, who is left to pay attention to human concerns? Who will see rumblings among employees that could turn into costly turnover in coming months? Turnover data gives us information after the horse has left the bar. HR, when it is working at its best, is able to pick up early warning signals. HR can tell which benefits package is likely to be met with acceptance. Internal HR can provide savvy in organizational development projects such as restructuring and team development. Outsiders have difficulty understanding the subtleties of culture until they bump up against it.

Because of the downside, here`s some advice for HR professionals - or for any other department that runs the risk of outsourcing:

(1) Distinguish where your presence could be of strategic importance to the company and where work could easily be outsourced. Fight to hang onto those strategic roles - and concede on those services that could be done easier and cheaper by vendors.

(2) Once you`ve determined what`s of strategic importance, assess your department. Does the COO, CEO, CFO, and CIO agree that your work has strategic importance?
If not, you must begin to shift what you do in order to beef up skill and visibility in strategic importance.

(3) When assisting the organization in outsourcing, identify potential risks. Don`t let leaders be seduced by numbers. Show human impact if outsourcing equals downsizing. The impact on productivity and morale could be devastating across the organization. Demand that leaders look at possible unintended consequences of outsourcing.

Regards,

Tracy