HR outsourcing is often viewed as involving the contracting out of a business function to an external provider.  Two organisations may enter a contractual agreement invloving an exchange of services and payments.

Reasons for Outsourcing -

Cost Saving, Focus on core business, Cost restructuring, Improve quality, Capacity management, Operational expertise, Tax benefit, Risk Mangement, Reduce time to market etc.

There are situations when a firm may consider outsourcing some of its R&D work to a contract research organisations.  In this context two most populous countries in the world - India & China, provide huge pools from which to find talent.  BOth countries produce over 2 lac engineers and science graduates each year.