Question

More and more these days, companies are outsourcing their HR activities. Do you agree or disagree with this practice? Why? What are some of the advantages of outsourcing HR functions? What are some of the advantages of retaining HR functions within the company?

Answer 1

Yes now a days more and more companies are outsourcing their HR activities. Some of the prominent reasons for the same can be as follows:

1. Focus on core competencies: Most firms like o focus on there core competencies to gain competitive advantage in the market and by outsourcing secondary activities like that of HR they can dedicate more resources in building there own advantage.

2. Cost and quality: With increase in the workload of HR department it becomes difficult for organisations to provide quality support. HR is no longer about hiring and firing of employees, it includes learning, development and retention of employees as well. Thus to ensure quality and optimization of cost, some companies outsource HR activities

3. Access to better technological capabilities when outsourcing activities

4. Corporate Restructuring

5. Downsizing

6. Be more responsive to customer needs, both internally and externally.

Advantages of Outsourcing:

1. Saves time and money

2. Improves efficiency

3. Employee Satisfaction

4. Helps to focus energy on core activities

Disadvantages of Outsourcing:

1. Maintaining quality check becomes difficult

2. Data breach is also one of the risk factor

3. Employees loose training and career development opportunities.