Impact on Human Resource Functions Outsourcing

Abstract

Outsourcing, contracting-out and the use of labour hire all have potentially dramatic consequences for HRM and human resource development in particular. Outsourcing is promoted as one of the most powerful trends in human resources management. The rationale for outsourcing HR functions includes financial savings, an increased ability to focus on strategic issues, access to technology and specialized expertise, and an ability to demand measurable and improved service levels. Advocates of outsourcing have traditionally warned that outsourcing and related strategies should not be seen as simply cost-cutting exercises. Nevertheless, cost reduction continues to be a major motivation for many employers.