The impact of outsourcing on employees a guide to organisations

The Impact of Outsourcing on Employees: a Guide to Organisations.

In some cases, outsourced employees lack the understanding of the company culture that a regular employee has. As the human resource department recruits employees, this lack of understanding may transfer to new employees during the recruitment process. The outsourced provider may also recruit employees who do not fit with the overall culture of the company.

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The success of a business heavily relies on the performance of its employees, if the employees are not the right fit; the success of the company suffers. Outsourcing human resources functions may lead to the release of sensitive company information. Whether deliberate or not, when providing an outside company with sensitive information, there is always a possibility for an information leak.

Dependency and loss of control create the risk of the business not being able to operate successfully if outsourcing is no longer an option for the company or if the provider changes the terms of the contract.

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Skip to main content. There are other options that can work either as an alternative to, or in conjunction with, outsourcing. Two distinctive features of HR shared services are:. They offer a common service provision of routine administration and sometimes additional HR services. They are service-focused, enabling the customers of the shared service to specify the level and nature of the service, and are therefore flexible to the needs of the business.

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Currently, more organisations appear to favour the setting up of internal shared service centres rather than the adoption of a full-scale outsourcing approach. The practice of offshoring may sometimes relate to outsourcing, although the two terms are often incorrectly used interchangeably. In other words, offshoring does not necessarily involve the services of an external provider. The adoption of such arrangements is likely to be driven by cost considerations, although some commentators believe that offshoring may be best considered for process transactions rather than for more personal services such as call centres.

Increasingly some organisations are looking to put in place comprehensive HR information systems that enable non-HR employees and managers to undertake a number of HR-related activities themselves via a portal or intranet, without the need for any external intervention. For example, in an ESS system, individuals may be able to update their own personal details when their circumstances alter, while in an MSS system, managers might review absence records for all their staff.

This is one example of how HR can harness technology to deliver services. The services of external consultants might be used to advise on specific HR issues or on the implementation of HR processes for example, the introduction of flexible benefits.

The Impact of Outsourcing on Employees: a Guide to Organisations.

Typically, consultants do not manage or deliver these services once implemented — this is taken on by the internal HR team. Creating a business case for HR outsourcing is an important initial step for any organisation considering such a move. An organisation needs to ask at the outset why it needs to change the way the HR function operates at present. In other words, what aspects of the existing HR provision are unsatisfactory or would benefit from improvements?

By probing such issues, HR can focus on the scale and type of changes that may be required, to help decide whether HR outsourcing might be an appropriate response as opposed to the types of alternatives detailed above. When organisations put forward a business case for HR outsourcing, a number of potential benefits are frequently cited. In practice, these benefits are not necessarily mutually exclusive while conversely a number could be achieved through some alternative solution rather than via outsourcing. Commonly mentioned benefits include:.

There are also a number of potential challenges and considerations that it is useful to bear in mind when considering outsourcing, including the following:. Outsourcing does not absolve the organisation of good people management practices nor of overall responsibility for the provision of HR services. Increasingly, outsourcing arrangements are long term five to ten year contracts are not unusual.

This helps to avoid being tied into unfavourable contractual arrangements.

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Standardisation of processes in line with the preferences of the outsourcing provider rather than the organisation. Fragmentation of the service provided meaning that day-to-day operations are split from strategy and policy direction. The need to constantly review the success of the outsourcing arrangement against specified metrics. The rationale for outsourcing services may change as the business environment changes, and there are instances of services being brought back in-house.

An organisation should structure its HR function based upon its organisational strategy, wider organisational structure and current business needs.

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A number of actions and decisions must be taken when selecting a suitable HR outsourcing provider — many of which will be similar to those undertaken when entering into any contractual arrangement with a third party. Understanding the existing HR service provision including the cost base, responsibilities and level of service - as these will all provide useful baseline information when comparing provider offerings and costs. Communicating with other organisations with which the outsourcing providers currently have contracts, to establish how satisfied they are with the providers.

Staying involved in the contracting process. Particularly in some larger organisations there might be a procurement or other function that normally takes responsibility for all contracts. It is important not to abdicate everything to such a function as it is unlikely to have the necessary expertise in HR matters. Identify each web page that allegedly contains infringing material. This requires you to provide the URL for each allegedly infringing result, document or item.

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