Human resource management (HRM) is a concept that has been used for a long time as individuals and organizations try to find out some of the ways it can be maintained primarily in the workplace. Human resource managers can be used to describe all the systems that are sued to be able to manage a group of people or employees at the workplace. The department is led by a human resource manager, and he or she has the role that cuts across three major areas which are, staffing, defining work and employee compensation. The main aim is to make sure that the state of productivity among the employees is improved and takes the right direction. The business world has been changing, and that means the human resources department should also change as a way of responding to the positive aspects that it bears. In most cases, companies find themselves lacking the best mechanisms to put in place and therefore opt to outsource the Human Resource functions. When they do these, they find themselves in enhanced or undermined circumstances concerning human resource management.
Companies that decide outsource the human resource functions are always on the track when it comes to development and growth of the internal relations. Human resource has become a complex activity, but the use of consultants and other outsourced personnel has turned out to be easier (Seth & Sethi, 2011). Some organizations have been taking part in research to find out some of the reasons as to why they end up outsourcing human resource functions. One of the reasons attached to this is that many of them do so since they want to save many. The idea of saving money underpins the outsourcing of almost all parts of the human resource functions. Most companies usually want to save money so that they can be able to use in other areas that seem to be of much importance. Examples of such areas are marketing and the purchase of inputs that are needed during the production process. Therefore, they go for human resources form other firms to allocate only little sums of money for the purpose.
The idea of focusing on strategy is the other factor that underpins organizations to outsource all or part of its HR function. For a company to be able to succeed or make profits, it needs to focus on the area that seems to be productive from all angles. The idea of focusing on strategy implies that companies want to make sure that they only deal with the business and issues that are stipulated in the goals and missions (Barney, 1991). Getting officers from other companies to deal with the Human resource issues is a way of maintaining focus on the main activities of the company. The company, therefore, leaves aside the human resource department to be handled by outsiders who have skills and the capability to run the issues revolving around workers welfare. All complaints from the employees are controlled by the outsourced officials, and this enables the company to meet its goals and set others within the various financial years.
Improvement in compliance is the other factor that underpins the outsourcing of HR functions. Most organizations have been facing a challenge when it comes to maintaining compliance with the rules of work while at the same time dealing with human resource issues (Boland & Tenkasi, 1995). Some of the human resource issues that cut across staffing and recruitment take a lot of time and money. The human resource managers have to set aside some time to make sure that the employees are trained on how to be able to comply with all the rules of the organization. The organizations need to comply with the provisions on taxes, the setting of prices, the satisfaction of customers and also the regulation placed on the number of times that can be produced. All these activities need time and dedication, and that is the reason why the reason why they have to outsource the human resource functions to take care of the issues that are of less importance.
Improvement in accuracy is the other factor that makes companies outsource the human resources functions. According to the book on "it's not all about money," it is stated that when one has too much on a single platform, it is always a good idea to share it with others who have the same interests (Child & Faulkner, 1998). Having too many responsibilities to handle may make the management to lose track, and this will lead to an eventual fall when it regarding the operations. Therefore, outsourcing the human resource functions acts as a way of relieving the tasks that are at the company's proposal. The outsourced human resource personnel makes sure that they meet the goals that have set when it comes to the work environment. He or she should be able to understand that business culture and the kind of relations that are taking place in the organization before starting any work. Accuracy will be maintained if the company, therefore, minimizes its tasks and focuses on those that are of a higher demand when looked from the perspective of the employees.
The other factor that leads to outsourcing of all the parts of the human resource is lack of experience in-house. According to the book on "it's not all about the money," there is an importance that is attached to the knowledge on strengths and also on weaknesses (Brown & Duguid, 1991). Businesses are supposed to venture into the strengths that they have and find a way of making sure that the weaknesses are handled to a greater extent. Companies that go ahead to hand off the activities that they are not able to handle usually make significant decisions concerning business. The in-house weaknesses can be handled by using companies and organizations that are from external agencies since they have the expertise to do so. The human resource activity is always complicated and companies that find it difficult to handle due to the weaknesses that they have to end up looking for help from outside. This factor underpins the need to outsource all the human resource functions, and it cannot be avoided if the companies want to succeed.
Outsourcing the human resource functions has both its positive and negative sides. This can be looked from the fact that it can either enhance or undermine the HR's strategic influence. Outsourcing improves the human resource strategic influence when looked from the perspective of efficiency (Purcell, 1996). There is a lot of importance that is connected to the maintenance of the dynamic aspects of the workplace. Outsourcing is a good way to make sure that the efficiency of an organization is maintained since it helps in the accomplishment of all the programs in the strategic plan. Efficiency in the human resources will be experienced from activities that cut across the payroll, compliance with the management and also in the benefits of administration. In the long run, the strategic influence will be maintained by all the people who have a significant impact on the organization.
Employee development is the other factor that can be used to understand the extent to which outsourcing enhances the HR's strategic influence (Roberts, 2001). Employee's performance can be easily managed by outsourcing the HR functions. The outsourced human resource managers make sure that they implement all the plans that are built on performance and also make sure that all the policies and processes in the firms are followed strictly by the employees. The firms that have been assigned to the role of outsourcing make sure that they assess the employees and later on avail a report that illustrates the findings based on performance. In most cases, the outcomes usually are positive if the outsourced firm has completely taken over the human resource activities. Therefore, the strategic influence that is connected to the firm is maintained for a better future.
Outsourcing may also undermine the HR's strategic influence in that it is likely to lead to poor performance. Most of the companies opt to outsource to reduce the cost of production and also the cost of purchasing raw materials (Rippin, 2001). However, a reduction in cost makes the firms that have been outsourced to provide poor quality services when it comes to performance. The day to day operations of the company are handled by the human resource, and if at all the outsourced firm displays poor performance, the effects will trickle down to the whole company. The adverse effects of the human resources will be felt by the entire company in that the quality of products and services offered will go down. Vetting is supposed to be done to make sure the outsourced personnel is credible and reliable. If at all this is not done in the right way, the HR's strategic influence will be undermined.
Outsourcing may also undermine the influence of the HR as it leads to recruitment problems. The outsourced firms might not be able to understand the culture of the regular employees, and therefore they might make mistakes on the way they are carrying out the recruitment process (Roberts, 2001). The lack of awareness may lead to the transfer of employees to departments where they are not well conversant. They can also be taken to areas that they do not know how to make things move in the right way. The outsourced firm may even end up employing people who are not qualified for the particular positions, and this will undermine the kind of influence that exists in the HR. Recruiting employees who are not the right fit undermines the success of the company when looked from the perspective of independence and winning of the customers. Therefore, the outsourcing of the HR function needs to be done keenly lest it undermines the strategic influence of the sector.
Dependency and loss of control is the other issue that can be used to get a clear understanding of the fact that outsourcing can undermine the HR's strategic influence. Most companies rush into outsourcing to provide the human resource services and later on give up all forms of control that are attached to that department (Rubery, Cooke, Marchington & Earnshaw, 2003). In some cases, the company ends up depending too much on the provider, and this means that he or she might now start operating as the owner or the firm. Loss of successful operation can be caused poor control over the business of the firm. The provider is not supposed to change any terms of operation so that all the issues can be handled as per the agreement. Otherwise, relying more on the outsourced human resource firms than the internal managers will lead to underperformance in the long run. Management of a firm is best done by people who are chosen from within since they already have a clue of every area that needs improvement and also the measures that are supposed to be taken according to the priority standards
In conclusion, all firms should be in the front to make sure that the human resource issues are handled as per the set rules. The employees are the primary determiners of the way a company will perform both internally and externally. The employees are the ones who have direct contact with the customers, and they are therefore supposed to be treated well so that they can facilitate development and improved stability of the firm. Firms usually outsource the human resource functions when they want to save and also when they realize that they do not have the internal potential of supporting themselves. A competitive advantage will be achieved after all the measures shave been put in place about the human resource department.
Seth, M., & Sethi, D. (2011). "Human Resource Outsourcing: Analysis Based On Literature Review." International Journal of Innovation, Management and Technology, Vol. 2, No. 2,
Barney, J. (1991). "Firm resources and sustained competitive advantage." Journal of Management, 17, 99-120.
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