Outsourcing can be defined as a process in which a company delegates some of its in-house operations/processes to a third party. Thus outsourcing is a contracting transaction through which one company purchases services from another while keeping ownership and ultimate responsibility for the underlying processes. The clients inform their provider what they want and how they want the work performed. So the client can authorize the provider to operate as well as redesign basic processes in order to ensure even greater cost and efficiency benefits. In other words, outsourcing can be defined as a phenomena in which a company delegates a part of its in-house operations to a third party with the third party gaining full control over that operation/process.

Companies turn to resources outside their organizational structure usually to save money and/or make use of the skilled professionals. For instance, a company might outsource its IT management because it is cheaper to contract a third-party to do so than it would be to build its own in-house IT management team. Or a company could outsource all of its data storage needs because it is easier and cheaper than buying and maintaining its own data storage devices. A business might also outsource its human resource tasks to another enterprise instead of having its own dedicated human resources staff - Excerpts from Cyber Futuristics

Regards,

CHRM

"To win...you must stay in the game" - Claude Bristol

Dear Farouk,

HR Outsourcing Services generally fall into four categories: Professional Employer Organization, Business Process Outsourcing, Application service providers, or e-services. When you outsource HR functions, some HR Outsourcing Services go with the "all-or-nothing" approach, requiring that they handle all your HR functions or none at all.

Typical services include:

• Payroll administration: Produce checks, handle taxes, and deal with sick time and vacation time.
• Employee benefits: Health, Medical, Life, 401(k) plans, cafeteria plans, etc.
• HR management: Recruiting, hiring, and firing. Also background interviews, exit interviews, and wage reviews.
• Risk management: Workers' compensation, dispute resolution, safety inspection, office policies and handbooks.

Some steps/processes companies can take to determine if outsourcing is right for them are:

1. Identify a specific business goal that would benefit from outsourcing.
2. Identify the criteria that will determine if the business goal has been achieved.
3. Determine the cost savings from outsourcing versus using internal resources.
4. Develop metrics mutually agreed upon with the outsourcing provider to measure and benchmark progress and success.

Do check out the article on "Security concerns with HR Outsourcing"

Regards,

CHRM

"To win...you must stay in the game" - Claude Bristol

Dear Farouk,

HR outsourcing can happen in various areas such as payroll, employee benefits administration, fixed assets administration, network management, receivables management, logistics management, hardware maintenance, telemarketing, call centres and database management. In India, the most common processes outsourced are related to training, payroll processing, surveys, benchmark studies, and statutory
compliance.

Anything more that can be added alongwith the above list is welcum !!

Regards,

Sujith