HR Outsourcing Case Study See how we developed solutions for our partners with 75-6,000 employees.
Our HR Outsourcing Case Study: Challenge #1
A Texas based Holding Company specializing in automotive dealerships was growing by acquisition throughout the state and initially had 18 locations with 400 employees. Their continued growth plans brought them to a decision point of either needing to hire a larger staff and train them or look at partnering with Corban OneSource.
Critical expertise needed in
- HR Support (Compliance, Overall HR issues, Training, etc.)
- Benefits Administration(Bill reconciliation, enrollment in 18 different locations, questions that need to be answered by employees)
- Payroll (Do we keep hiring more payroll people as we get bigger? Does it make sense for us to do payroll?)
- We need one technology platform and the expertise to run it efficiently for all of our locations.
- How can we maximize efficiencies using technology?
- Do we want to continue to grow a department that is not core to our business?
- Do we have the current staff to handle this new growth? / How many more people will we need to hire?
- The Executive Committee decided to focus more on growth and profitability than administration. “Let’s do what we do well and let Corban OneSource do what they do well and we will all be better off for it.”
- Corban OneSource brought in an HR, Payroll and Benefits Administration technology (web based for all locations) and supported the technology with the right people that already knew how to maximize the technology.
- A dedicated toll-free phone number was set up to create an Employee Care Center for the 18 locations to get their questions answered quickly.
- A Senior HR Manager was assigned by Corban OneSource and an HR Audit was conducted to start benchmarking compliance and an ongoing Professional HR resource was available for questions and HR issues.
- Corban OneSource took over the payroll administration, so their accounting department could focus on more acquisitions.
The Holding Company is now at 26 locations, 620 employees, and still growing profitably. Every time an acquisition is made, they just call Corban and we bring them onto the existing technology and service platform smoothly with little to no business disruption. The company has contained their costs and is focusing on running their business.
Overall Hard Cost Savings for the first year:
$102,500.00 (does not include any soft costs eliminated due to business disruption of 8 acquisitions or streamlining for efficiencies)
HR Outsourcing Case Study: Challenge #2
A Data Acquisition company with 450 employees in 18 states had been in a large PEO for the last 10 years. Though they thought they were receiving the overall value they needed, the PEO was unwilling to give them an exact breakdown of what they were being charged. They rated this PEO’s customer service as good and liked the “all-in-one” bill, but could not identify whether or not the true value was there.
Specific expertise for employer law in multiple states
- HR (Compliance, Overall HR issues, etc.)
- Benefits Administration (Multiple carriers, bill reconciliation, enrollment in 18 states, questions that need to be answered by employees)
- Payroll (They were currently doing most of the work to get the data to the PEO and entering it online themselves and it was becoming way too time consuming)
- A definite need for one technology platform that all of the employees can access all over the US and the expertise to run it efficiently for all of their locations.
- A technology platform that allowed them access to all of their own data, so they could run their own reports 24/7.
- They do not want to hire any additional staff.
The CEO provided all of the information from the PEO they were currently utilizing and Corban conducted an in-depth analysis as to what their exact costs were (Workers Comp, Benefits, Cobra, Payroll, HR, Benefits Administration, Technology, SUTA, FUTA, FICA).
- Our Employee Care Center solution was implemented for all their employees in the 18 states to get their questions answered quickly.
- An HR Manager was assigned to start benchmarking the PEO’s compliance as it relates to policies and procedures, employee manuals and all areas relating to HR.
- Corban OneSource took over the payroll administration, so they did not have to hire any additional resources.
- The Company is now able to scale both up and down during peak times without incurring fixed costs.
- They now know exactly what their costs are for each aspect of their business relating to HR (Workers Comp, Benefits, SUTA, FUTA, etc.), which allows them to budget and control their costs more accurately.
- Their health benefits are now customized for their company and not a PEO that has to take into consideration hundreds of other companies. They are now able to take advantage of government programs like Workers’ Tax Credits for protected classes of workers that should add a minimum of $25,000 to their bottom line.
- They have regained access to their own corporate data to run the necessary reports when they choose and are using Corban’s advanced technology platform to track a significant amount of different aspects of their business they couldn’t before, given the PEO technology was designed for companies that have an average of 20 employees.
- The company has contained their costs and is focusing on running their business.
$252,500.00 (does not include any soft costs or the potential Tax Credit savings of $25,000)
Schedule a convenient time that works best for you
Don't have your calendar in front of you right now, use the form below so we can reach out to you..
" * " indicates required fields
This paper is a mixture of desk and field study. The paper focused on Human Resource Outsourcing in Banking sector looking at UBA Bank of Guinea. Based on literature review and empirical evidence corrected through inter-views from UBA Bank officials, the paper defines outsourcing concept, and highlights impact of outsourcing on organization, and on employees. The re-searcher then delves in issues areas looking at Human resource models, and then highlights strategic reasons advanced for outsourcing; while discussing economic reasons for outsourcing, vendor selection and decision making in outsourcing process. The paper concludes presenting factors that may influ-ence human resource outsourcing decisions.
Human Resource , Outsourcing , Bank
Share and Cite:
1. Background of the Study
Several scholars confirm that efficiency and success of organization(s) is much premised on employing minimum resources in various sectors of organizations which is often realized through internal mechanisms such as assigning responsibilities, taking account while reflecting, weighing and evaluating decisions taken by management. To achieve success, human resource outsourcing is done placing outsourced personnel in different sections of the organization.
According to Gupta  , human resource outsourcing can be looked at in various ways, key among them being delegating human resource services to a foreign or external service provider who is assigned with responsibility of management in identified and often measured performance metric. Studies have confirmed that while outsourcing, companies look at several areas of services that bring about competitive advantages looking at services such as accounting, customer care, security, financial services, among others. According to the report of The Human Resources Association  , there has been a significant increase in human resource outsourcing. The report further explains that studies indicate in most cases firms outsource human resource of meant to support several sectors but back office services takes a lion’s share. The report further reveals that this development calls for extra carefulness or best human resources practices at places of work if firms are to realise benefits of outsourcing  .
1.1. Understanding the Concept of Outsourcing
In their 2007 book, Crafting and executing strategy: The quest for Competitive Advantage (15th Edition), authors Thompson A, Strickland A, and Gamble A, defined Outsourcing as decision taken to bypass some value chain activities that would be done internally but have such value chain activities provided from external specialists  . Firms and Organizations whose locations are surrounded by small sized firms and or independent individuals offering various similar or even auxiliary services often tempt bigger organizations and firms to outsource and use their services on contract basis.
Despite common features between subcontracting and contracting, studies have confirmed that contract often involves key aspects of organizations or companies such as the control of the Company’s ownership, operation and process which is being contracted with the major or parent company while under outsourcing, such aspects such as control of the operation and process is given to a third party other than the parent company. Indeed, the 2005 Chartered Institute of Personal Development Survey report titled; Off shoring and the role of Human Resources, equated outsourcing to delegating some tasks which would be part of in-house responsibility but its assigned or delegated to a third party that has been outsourced and given full control of operation and process involved.
In recent days, companies have embarrassed Outsourcing after realizing that it helps in reducing operational costs which helps firms to register profits and maintain operation. Most of functions companies outsource include Human Resource, Information and Technology services among others and the firm in the meantime concentrates on providing core services as non-core is left to be outsourced thereby helping in cost cutting.
1.2. Human Resource Outsourcing Concept
In his scholarly work titled Human resource management: A contemporary approach, Barney defined Human Resource Outsourcing as a combination of different model and techniques to new or non-existing forms of activities and radically reshaping and redesigning them with a purpose of creating output of value meant for end users  . It is important to note that Human Resource outsourcing gives a company a chance to have a choice to go for cost cutting as well as giving the company opportunity to release or even hold control of particular activities under HR docket. Those who support outsourcing contend that it provides the company opportunity to respond and cater for activity the company feels is/are of a core value to the department. Indeed, those who support Outsourcing contend that with option of outsourcing, the company can easily outsource employees to meet competing demands of better services and at a fair cost. Several scholars have argued that outsourcing is of greater merit to HR departments arguing that, it gives Human Resource a tool necessary for creating competitive advantage of the company. This is according to scholars such as Greer, and Gray, as discussed in their scholarly work; Human Resource Management Outsourcing: The Make or Buy decision  .
It is difficult to keep companies working properly since there are so many factors that have to be analysed at all times. Johnson and Scholes  argue that as a company gets bigger, there is a need to protect the staff and handle everything linked with human resources properly. Though often staffed by capable leaders and a well-educated workforce, most organizations lack the HR expertise to address a broad range of emerging issues, for instance, how to find and deploy skilled staff or international assignments in emerging markets or quickly absorb thousands of employees from a merger or acquisition and rapidly integrate them into a single enterprise resource planning (ERP) platform  .
1.3. Guinea’s Banking Industry
Guinea’s banking industry is made of 15 banks; among others they include; Bank of Nigeria which is also known as International Commercial Bank (ICB), Banque Islamique de Guinée (BIG), Société Générale de Banques en Guinée (SGBG), Banque Internationale pour le Commerce et I’lndustrie de Guinée (BICIGUI), Sociéte Générale de Banques en Guinée (SGBG), Banque Populaire Maroco-Guineénne (BPMG), Ecobank Guinée (EBG), Banque de Development de Guinée (BDG), UBA Guinée (UBA) and FIBank Guinée (FIBANK) etc. Guinea’s Banking system is regulated by Central Bank of Guinea, and over 95% of Guinea’s commercial bank are foreign owned (Central Bank of Guinea, 2018). The Central Bank of Guinea has tried to embrace and encourage financial liberalization which in many ways has contributed to competition in the banking sector bettering services offered to customers which signifies possibility of profits and improved.
However, studies suggest that there is complex and high competition environment for banking sector which calls for new ways such as changing in strategies  . This is not a surprise considering high number of applications received by Guinea’s central banks with many applicants applying to join the banking sector. UBA Guinea’s. UBA Guinea has also come up with several strategies among others outsourcing, rebranding which the bank hopes will help it realise its vision of growing bigger with better services.
UBA bank has over the years been improving its services to Guineans―changing their roles to include other services such as foreign exchange, trade, advisory, training employees’ customer care which are all different from the onset idea of just banking services such as handling deposits.
As of now, the bank―UBA Guinée has three branches across Guinea with over 200 employees and the bank has done several outsourcing strategies from outside focusing on services which are deemed core to the bank survival. Such activities include among others cleaning services, training security, and transport. All this is a right track considering Johnson and Scholes’s definition of outsourcing  .
2. Literature Review
This part highlights the debate fronted by various scholars about human resource outsourcing presenting empirical evidence in regard to the topic, facts on human resource outsourcing from a historical perspective, the effects of human resource outsourcing in an organization, diversity of activities/functions outsourced, challenges organizations face as a result of human resource outsourcing, outcomes of human resource outsourcing particularly to the employees and a sneak pick of human resource outsourcing models presented by different scholars.
2.1. Reasons for Preferring Outsourcing Management
Thompson explains that, there are several reasons human resource departments prefer outsourcing which include the following: Many companies and firms aim at accessing first class capabilities which maybe more costly to obtain staffers on long term contract basis, but cheap when outsourced, the need for specific expertise for activities which may require more time or are out of control, sharing costs with a partner. Thompson further contends that outsourcing gained fame in late 1990s with several firms and companies striving at creating and increasing more profits  .
Outsourcing human rescore services enables companies to deal with human resource functions. This is attributed to the fact that human resource outsourcing is believed to be cost effective compared to contracting in-house employees to solve Human Resource problems. Companies which are faced with time constraint that they cannot manage to train their employees to address human resource needs often embrace the option of human resource outsourcing.
2.2. Literature on Outsourced Functions
Scholars Ulrich and Bettis et al., in their scholarly works notes that over the years, Human Resource has been evolving with a major purpose to produce deliverables which has resulted into re-examining of HR activities, functions and departments to understand and assess how best they can be provided  .
Advocates for human resource outsourcing contend that companies recruiting employees must give priority to activities deemed essential for their (companies) survival then take leverage on activities which are considered to be peripheral. This will help the company to seek for other cost effective ways such as corroborations, pattering and where possible substitution of in-house capabilities. Coupled with good management, this in long run can help the company to thrive despite the above noted cost effective avenues the company may have opted to practice.
Indeed, in his scholarly article titled “The Perceived impact of outsourcing on organizational performance” Elmuti highlights several activities the twenty first century companies continue to outsource since many of them were thought to be having almost similar functions which left such companies doing without them in favour of outsourcing or downsizing them. Elmuti gives example of such activities as payroll, administration of retirement plans and benefits awarded for administration  .
Elmuti’s argument resonates well with other scholars such as Brown who contend that common outsourced functions include the Human Resource Management process (which includes hiring and firing employees/experts, and or recruitment process) background interviews, risk management services (which may include compensation to compensation, solving misunderstandings, office/administration policies), training, development, payroll, record keeping, performance appraisals among others  . In their 1996 article, scholars Greer, C. and Gray, D. Human Resource Management Outsourcing: The Make or Buy decision, the two scholars contended that advantages of human resource outsourcing by far outweigh the costs and if a proper process is followed, it is more of a sure deal that the results will result into a performing Human resource team  .
In today’s world, Human resource outsourcing has proved to be a great strategy in terms of costs cutting and also performance of organizations hence, the functions it performs are largely human resource programs. Services of third party staffers or employee also known as Employee Assistance Program are formally established and known. Employee Assistance Programs help employees in awareness programs such as when one are/is in need of legal advice, counsellors, or when they are faced by personal challenges be financial or family related. A case in point is in United States’ California, state laws bar and restrict personal challenges such as testing drugs it is restricted to do so while at work. In this case, background check is always considered focusing on criminal searches, employment and checking the authenticity of education the candidate is claiming to have etc. This way, it is a common practice that the company’s Human Resource department will be required to identify and outsource suppliers of benefits intended to benefit company employees, such benefits may include, medical insurance, work man’s compensation, and retirement plans among others  .
While there are several factors that should be considered before making decisions in process of human resource outsourcing in banking sector, there are questions that should not miss. The two questions are; if outsourced, will such service have impact on organization and lastly will it have impact on the firm’s employees?
2.3. Impact of Outsourcing on the Organization
Often, the driving goal companies embrace human resource outsourcing is majorly to gain access of competitive market through realizing and achieving higher returns which is/are often enabled as a result of limited capital commitment as well as their ability to adjust to the changing environment while using less commitment to in-house resources.
In their scholarly work titled; Firm’s Use of Outside Contractors: Theory and Evidence published in Journal of Labour Economics, authors, Abraham, K. G. and Taylor, S. K., argue that banking sector is a very busy and competitive sector, where competitors are widely awake and looking at avenues of how they can edge others  .
The two authors further argue that outsourcing can help firms and companies to reduce operating costs within the firm Abraham, and Taylor, stressing that here the firm gives more attention to three areas namely, capital investment, fixed cost and shape as well as operating expenses  .
When non-core services of the firm(s) are/is outsourced, in most cases funds that would be spent in such noncore activities are saved and maybe re-invested in core operation(s) of the firm thereby helping boasting the operation, hence more profits and success of the business. Such funds saved as a result of outsourcing may also be used in other avenues such as conducting research and initiatives meant to create or find new market, which is also vital for the success of any business.
As Arnold noted in his scholarly article New dimension of outsourcing: a combination of transaction cost economics and the core competencies concept; when outsourcing is being done or considered, the expectation often are/is that it will result into cost cutting which scholars argue is in line with the so-called strategic management view as far as resource mobilization and allocation are concerned. Scholars who support this idea contend that, in such circumstances (when non-core services are outsourced), activities and services that are not core competencies to the firm when outsourced, it is of great advantage to the firm’s performance since it would allow economies of scale―giving away to have venders with high skilled services yet at an affordable and relatively lower cost Arnold  .
2.4. Challenges of Outsourcing on the Side of Organization
In their 1992 book, Outsourcing and Industrial Decline, Bettis, et al., argued that outsourcing should not be seen as a solution to every challenge in human resource department stressing that, it can despite numerous merits associated with outsourcing, it can easily disrupt the company’s tradition especially if the vendor is seen as a third-party other than being portrayed and seen as a Meer extension of the company’s human resource functions. The authors, Bettis, et al., further contend that because there is always much reliance to secure services from the outsourced vendor, it is very easy and possible a firm to under use its employees skills and competencies which in the long run results into overdependence on the vendor Bettis, et al.
In their 2005 scholarly article, Top 10 mistakes when outsourcing benefits, authors 1 Grauman, and Paul, argues that one of most challenges that maybe hard to avoid when a firm embraces outsourcing is that, the firm is vulnerable to losing confidential information such as audit reports, employee’s personal information which may be used inappropriately and exposed to the firm’s competitors  . In the same way, in his 1998 scholarly work, The Contracting organization: A strategic guide to outsourcing, Domberger explains that outsourcing is one of major ways how in-house skills and knowledge is lost. The scholar adds that such loss is not just limited to loss of knowledge and skills but also the firm can easily backslide in innovation part as it will opt to rely more on outsourcing. This resonates well with other scientific studies done by different researchers. A case in point is according to a 2005 study by Berry, M. entitled European employees more upbeat about outsourcing, as firms embrace outsourcing, it comes with disadvantages such as reduction in production which can be attributed to the loss of skills and knowledge among employees as firm tend to rely more on skills of outsourced HR  .
Relatedly, other scholars argue in support of the need firms to have their information kept jealously since some of information maybe sensitive. When conducting search for example for executive, because of the positions sensitivity some firms only consider research that maybe needed to identify names of candidates deemed potential. Bettis advises that to hide such sensitive information, names of vendors names sometimes are altered and the company is left with responsibility of searching or recruiting candidates  . The author further explains that though some firms outsource job evaluations, salary and wage surveys, in most cases they tightly keep a secret their in-house wage and salary changes, incentives as well as other payment or compensation related information.
2.5. The Likely Impact of Outsourcing on Firm’s Employees
Several scholars contend that studies have proven how employee viewpoints such as behaviour and attitude play a vital role when it comes to time organizations to make decision whether to or not to embrace outsourcing, Kessler  . In their scholarly article 2 Outsourcing Transitions and the Employment Relationship Implications, Ivan and James, argues that to determine if it’s good to outsource Human resource functions, the answer or decision will be informed in relation to employees attitude and the authors stress that it should be considered, Ivan and James  . The two authors further argue that human resource outsourcing can easily cause lack of morale among firm’s remaining in-house employees which the authors say that such feelings among employees can negatively affect the organizations culture. Other scholars such as Kakabadse A and Kakabadse N, hold the same views as expressed in their article, Critical review―Outsourcing: a paradigm shift  .
Further, the above view is held by other scholars who contend that outsourcing human resource is not a magic bullet. Grauman and Paul argues that as a result of human resource outsourcing, the firm may be engulfed by endless conflicts between outsourced (external) and internal employees if not given attention  . The other demerit of human resource outsourcing is that in-house employees can easily feel insecure at jobs which results into lack of morale, increases cases of absenteeism which all result into low production.
Mitchell and James, explains that there are some key factors which are credited for the successful outsourcing of human resource activities as discussed below; there’s need to critically considered organizational decision making taking into consideration organizations core ability. The decision should be taken into account knowing that it is very important to increase budget for firm’s core competences than putting more funds in other activities. The other crucial factor that should be considered while making a decision to outsource is to consider the views of the organization’s employees by involving the representatives of the employees in decision making. This makes the employees involved to develop a sense of ownership which is good for the success of the firm since employees will give their best to deliver knowing they are considered to be important in the firm. Lastly is to ensure that the firm’s employees are satisfied with the process of outsourcing human resource activities. Some scholars argue that where in-house employees are fully involved in outsourcing activities, such leaves employees within good relations and may ease routine transactional human resource activities which in long run may lead to the firs success as employees give more attention to any challenging activity at the firm as opposed to in incidences where employees are not involved in decision making prior to outsourcing thereby negative sentiments.
3. Human Resource Outsourcing Models
Scholars contend that there are there are three major models employed while outsourcing human resource namely; Professional Employer Organization (PEO), Administrative Service Outsourcing (ASO) and Huma Resource Navigator model which are commonly known and have been used world over to meet the needs of firms and organizations.
If a firm or organization is in need of service payroll services, in this case first-class staffers or workers best benefits the programs, while supplementary HR skills and knowhow/expertise, PEO model is widely recommended as the right Human Resource Outsourcing model that should be considered. Also Administrative Services Outsourcing or (ASO) which is said to be the most flexible model since it is said to best offers businesses several related services and benefits to organizations or firm sometimes without necessarily requiring a co-employment agreement is also mentioned as one of models that can be thought of often   .
The other model―Human Resource Navigator, the Human Resource provider assumes and is expected to prepare activities which often are purely administrative. Often, the main aim here is to ensure cost reduction in the running of the business. Under human resource navigator model, the third party provider often works with an aim of realizing economies of scale with focus across several clients. In this model, professional employer organization often combine together forming a firm which works for the interests of the employer and become the manager of record for the employees. In this case, the relationship formed aides Professional Employer Organization to assume responsivity for HR functions ranging from payroll to benefits.
Some scholars have argued that, Professional Employer Organization model is popular when it comes to small and mid-sized business where outsourcing is used as a way of ensuring agreement in the business to bypass costly internal human resource department. Since other functions such as administrative function is already catered for, it is possible for small sized business to direct bigger portions of their resources to core competencies and production to ensure success of the firm. This way, if the firm already has payroll process, HR department(s) can come in and enhance its Human Resource capabilities.
Authors such as, Mehlman, and Heineman, argue that under the specialist model which is also known as designer model, human resource outsourcing provider often will serve as an expert or consultant by troubleshooting given human resource issues or can or will be required to overhaul the entire human resource program design. It is important to note that, though the provider will not be required to assume control of HR transactions, he will be required to give skills and knowledge which can be used to modernise internal process in HR department  .
3.1. Strategic Reasons for Outsourcing
In their 2003 scholarly article Outsourcing IIR Functions: When and When Not-To Go Outside, authors Stroh and Treehuboff argues that, it is important to note that while several organizations often outsource various Human Resource activities, this much depends on how relevant to the organizations interests and strategies. In the same way, there are several reasons why Bank of Africa (Guinea) engages in outsourcing certain human resource activities  .
Many firms prefer to outsource human resource service largely because of the need to access expert and quality services which often are readily available from external venders, such as HSBC. Though the common view is that, it is important to note that cost efficiency is not a driving factor why firms chose to go for outsourcing and hence, one can argue that, singly, low cost effectiveness in a competitive market cannot be a major factor to choose a vendor from those available offering almost similar functions but at a different cost. In same way, Outsourcing has made UBA Bank (Guinea) able to engage to focus on its core functions, leaving the bank with liberty to continuously outsource some functions it deems necessary but not very much of importance in the operation of the bank which arguably allows manager(s) opportunity to concentrate on offering better services on core functions other than concentrating on minor sectors of the issues which may be required but not vital to the smooth running of the bank. This is in line with views expressed by Shrim, in his 2002 article Just Right Outsourcing: Understanding and Managing Risk, where the author contends that outsourcing often is seen as a way to assist Human resource professionals to involve in functions which are deemed more core to the organizations vision  .
According to a 2002, scholarly article by scholars Kakabadse and Kakabadse entitled Critical review―Outsourcing: a paradigm shift, firms that aimed at finding competitive via outsourcing often created an opportunity of expanding career opportunities as other unemployed HR would get chance to be employed when outsourced. The two authors argue that as a result of the need to stay with control over outsourced activities, in-house employees found themselves being given responsibility to take charge of the outsourced activities which in the long run left firms in-house employees gaining skills and expertise in day-to-day running of activities they were given responsibility to overlook or supervise which helps(ed) them to gain knowledge and skills which is a factor as far as creating competitive advantage is concerned  .
3.2. Economical Reasons Advanced for Outsourcing
According to Elmuti’s 2003 scholarly article entitled; The Perceived impact of outsourcing on organizational performance, there are several reasons why firms outsource among others being the need to save operation costs. Indeed, during this study, UBA Bank (Guinea) employees the author interviewed indicated that one of major reasons why the bank has/had embraced outsourcing is the bank’s desire to ensure cost-cutting in the bank’s operation. Indeed, according to KPMG International, their 2006 report indicated that, 78% of the people their interviewed indicated that cost cutting was the main reason behind banks’ decision to embrace cost cutting. Human Resource outsourcing is important to affirm considering the fact that it gives firms opportunity to put funds where they are most needed while using services of obtained from cost effective Human Resource providers. Example of such services outsourced on other than investing in them is outsourcing security services 3  . The above resonates well with scholars such as Elmuti who contends that many firms prefer to outsource services such as security activities, human resource and payroll activities largely because they can help the firm get a good quality labour providing first class services yet at a reasonable cost  .
Another reason why UBA Bank (Guinea) embraced outsourcing is the bank’s wish and need to have experts’ services. Considering the ever growing competition in banking sector, to compete favourably, banks must have better and competitive services and innovations which can only be best provided by experts. It is also important to note that growing and developing such expertise and skills internally, it takes time and a lot of resources while there are options such as getting such services from an outside provider often is cheap in terms of costs (personal Interview, 2018). The above narrative is no different from the findings of a study conducted by KPMG which shows that of their interviewees, 72% of them contended that the need for experts with excellent innovative skills encouraged them to embrace to outsource Human Resource functions  .
Another reason advanced by UBA Bank (Guinea) explaining their love for human resource outsourcing is that the practice offers a quick solution when there’s need for argent change in service, yet to have and train in-house staff for such employees would consume time and a lot of money. Some of the interviewees observed that, some functions would require bug budget to kick start yet their functions can easily be got and at a low cost since there are many vendors with such services on market which leaves some offering same services at a very low cost despite having quality services.
3.3. Highlights on Some of Human Resource Outsourced Functions
Following interviews conducted with officials of UBA bank (Guinea), the author authoritatively concludes that UBA Bank (Guinea) has embraced human resource outsourcing. The author contends that most of outsourced services by the bank include Information and Technology activities, Cleaning, Security, catering services, Security, transport, Insurance services, Training and development, and network and telephone(telecommunications) among others.
It is important to note that the high enthusiasm in outsourcing HR by banks can be attributed to the availability of external trainers who have expertise to deliver well packaged training programs aimed at imparting such expertise to bank managers which leaves banks enticed as they are looking for the best, hence outsource such services to have their bankers trained well.
Another finding observed by this study is that like other banks, UBA Bank (Guinea) has embraced outsourcing of training functions which the banks deem related with the bank’s core needs and capabilities. This finding resonates well with findings of other scholars such as  . This study further confirms that at UBA Bank (Guinea), HR functions such as payroll is one of those which is hardly outsourced by UBA Bank (Guinea), whereas the same bank often outsource activities which often are thought not so central or core. They include for example training of employees, and payroll administration  .
Another notable finding at UBA Bank is that, the bank does not outsource key or strategic human resource functions such as research on Human resource management, or planning. The above finding resonates well with findings of scholars such as Gainey and Klaas  ; Oza, and Hill  .
3.4. Vendor’s Selection during Outsourcing Process
UBA Bank (Guinea) has a written policy frame work that details all steps that must be followed while the bank is outsourcing services. Through competitive bidding, the bank identifies the vendor to offer the functions needed.
It is important that before a contract between the company and the vendor to offer outsourcing services is signed, the management should be careful and avoid any unnecessary ambiguity in order to make the right choice and decision Grauman, and Paul  . It is also important to note that outsourcing decisions are at times affected by the selection committee’s emotions and manipulation sometimes on side of committee or the firm’s internal politics.
A company or firm also set up time frame which was followed to review and analyse the way how the outsourced vendor is implementing the activities the bank outsourced him/her to offer. At this point, the company can as well assign an executive which can be tasked with responsibility of ensuring that the outsourced vendor does not deviate from offering the services or activities asked and more importantly ensuring quality service(s). UBA Bank (Guinea) followed this practice to dot, (personal Interview, 2018).
It is also important to note that, other than the above, it is vital and of great benefit to the firm to ensure there is training in vendor management technics. This is vital since it helps the firm to be able to address unforeseen challenges that may arise as a result of risks and challenges related with outsourcing  .
3.5. Outsourcing Decision Making at UBA Bank (Guinea)
Outsourcing decisions at UBA Bank (Guinea) are largely a responsibility of the bank’s decision making organ and is made through a rigorous and process which with more focus on the Bank’s vision, aspirations and objectives of the bank’s shareholders. Though it should be the work of Human Resource Department, the exercise (the process of outsourcing human resource activities) is always supervised by the bank’s board, and once discussions are done and decisions made, the board communicates to the board communicates to bank to have the decisions implemented at regional and branch levels depending on the decisions reached.
Scholars like Williamson observed that, decisions to decide whether or not to outsource Human resource functions from external service provider/vendor often is handled by
The decision to outsource HR functions to external vendors or perform it internally is done by Transaction Cost Economics (TCE). In same way, during this research, the author found that UBA bank (Guinea) use TCE frame work and the reasons advanced for this was that Transaction Cost Economics framework best explains the question helping one to understand what conditions can a firm in this case UBA bank gain from outsourcing. Put differently, instead of building internal mechanisms and resources while performing functions of human resource, the firm can easily choose to use external vendor at a fair price/cost.
This strategy, (Transaction Cost Economics) can be combined or used along Arnold’s 2000 outsourcing model described in his scholarly work New dimension of outsourcing: a combination of transaction cost economics and the core competencies concept, where he explains the four different factors that should be taken into consideration when a firm is considering making outsourcing decision  . Arnold describes the four components which should be considered as; the design to be outsourced, the partner being considered to be outsourced, the subject the firm or bank considering to outsource and the object 4 the bank (firm) is considering to outsource. In this case, UBA Bank (Guinea) normally focuses on the subject under consideration for outsourcing a process that involves issues like decision making process which assess whether the idea of the bank is considering (to outsource) is viable or otherwise, the next step is often considering which internal activity the firm in this case the bank may consider for outsourcing.
Once the above is considered, the next step the firm or bank should consider is a suitable outsourcing partner from the pool of the available options that offer the services the firm is interested in outsourcing. The last step the firm or bank in this case should consider is formulating an outsourcing design the firm may consider most suitable. The assumption is that, when the bank uses the two models as discussed above and ensure periodic assessment on the benefits of this process (outsourcing), there are greater chances that the bank’s plans will and objectives (for outsourcing) will be realised.
Another observation of focus is the need UBA Bank (Guinea) to give attention three key structures areas while making outsourcing decisions. They are; control of management, cost of external services and strategic alliances 5 .
For firms considering outsourcing to be successful in their business, another key factor to consider while outsourcing should be to look at services offered and ensure that they are not very common. Put differently, in event that as a result of say tradable nature of outsourced provisions have less market advantage, in this case an outsourcing strategy that aims at improving market provision can be vital bringing in success. Considering findings of this study, the author authoritatively narrates that for outsourcing to be successful, it must meet the needs and goals set by the department ( Figure 1 ).
3.6. Factors Influencing HR Outsourcing Decisions
The Like other firms, UBA Bank (Guinea)’s outsourcing decisions are guided by the banks business structure. During this study, both respondents and employees of the bank noted that the bank has services and products offered in its structures. Arguably, it is the biggest bank in Guinea hence, to be able to offer services in the best way leading to success, it has to focused more on offering services for it is the bank’s man core activity. In the structure of UBA Bank
Figure 1 . UBA bank (Guinea) decision making tree.
(Guinea), implementing of Human Resource outsourcing often is done with a clear guidelines starting from top level management to the least. The process is that several units in principle are expected to pass on information to other team members. If such is not given focus, embraced by the team and done well can as well make the efforts unsuccessful. As a result of poor communication, outsourced services such as Printer services and also Card Production (Automated Machine Cards) at UBA Bank (Guinea) experienced several hiccups and challenges which the author contends can be traced from the bank’s arguably poor governance and failure to have a constant review to take stock of the progress  .
Another factor that is ably influencing human resource outsourcing at UBA Bank (Guinea) is the banks size as well as its capacity to raise funds needed for such activities makes the bank yearn for more innovations success thereby prompting them to for outsourcing. UBA Bank is one of Guinea’s largest banks with enough funds and assets which gives the bank capacity to go out and outsource functions since it can easily clear the vendors’ costs involved  .
Another factor that can influence Human Resource Outsourcing decision is operating costs involved. As Arbaugh (2003) noted in his scholarly article entitled; “Outsourcing Intensity, Strategy, and Growth in Entrepreneurial Firms” It is important for organizations to consider factors such as the management needed, costs to be involved and communication related issues. If the size of the organization is big, indeed, as Arbaugh (2003) notes organizations must be very careful while outsourcing human resource since failure to do so may result into outsourcing activities that are of no great importance to the firm and at worst undermine the firm’s performance  .
UBA Bank (Guinea) is a tested firm in terms of maturity considering the fact that it is not only with big in Guinea where it has several branches 6 but also mature on African continent where the bank has several services in various countries. UBA Bank Guinea in particular being one of the biggest banks in Guinea, outsourcing human resource functions at the bank is paramount since it helps the bank to gain access to skills and knowledge that maybe hard to produce in-house yet very important towards the bank’s survival and competing for market. It is however important to note that, though maturity of level of the firm maybe important, not all scholars believe it should play a key role(s) when it comes to decision making during outsourcing decision making process. Although Arbaugh (2003) in his scholarly article; “Outsourcing Intensity, Strategy, and Growth in Entrepreneurial Firms” argued for maturity of the firm/organization(s) is a prerequisite while Delmotte and Sels (2008) argues otherwise   .
Another factor is the firm considering quality of services to be offered. In most cases, the firm’s major objective or goal to go for outsourcing is to procure services that the firm cannot produce from within (in-house). It is natural that every firm would want to spend on services that are/is of high quality so as to bring a positive contribution or change. With UBA Bank Guinea, during the study, the researcher observed that the bank had not come up with precious and clearways how to grade and or quantify the kind of services the to give a hint on which service will be acceptable in the future should the bank decide to continue outsourcing. This certainly makes it hard the bank to conduct performance evaluation  . It should be noted that quantifying the goals of outsourcing is a very vital when it comes to making a framework. Further, it can be argued that it will be/can be hard to quantify what the current results are and also can be hard to tell and decide the kind and grade of services that maybe required in near future especially where the firm lacks a clear measurable goals.
It is in interest of a firm to outsource good and quality service(s) and therefore, it should be the firm’s management wish and view on competitive advantage of outsourced human resource functions that should be considered and taken as a priority when discussing and considering outsourcing. In case of UBA Bank (Guinea), the bank’s management tasks the bank to ensure there are competitive training opportunities for the bank’s employees which helps to maintain an advantage as far as completion is concerned in the banking sector  . In outsourcing process, it is important for management to be in line with expectations of organizations and do guide the process to ensure so as get best compared to what in-house activities have been producing. Put differently, some scholars have argued that to rate it as a successful strategy, as a result of outsourcing, the firm should at least enjoy competitive advantage. Indeed, studies indicate that competitive advantage issues are considered key when firms are going into outsourcing. They include for example, the flexibility of workforce, costs and time efficiency involved as well as implication in relation to work load. The best way for firms to easily identify the likely benefits and threats that may arise from outsourcing process, it is vital for firms to consider giving a closer attention to management methods 7 before concrete decisions are made.
Closely to the above, it can be argued that firms making decisions which are considered or said to be good alone may not mean there is guarantee of positive outcome. In an incidence where skills and knowhow of provider, and the attitude especially on the side of remaining employees where they are not given attention and managed well, the process maybe considered to be negative and to have failed. Scholars Kaplan and Norton hold the same view. Therefore, key among other factors firms should consider while making outsourcing decisions should be their (firm/organization’s) major characteristics such as size, budget implications, environment as well as culture after all, it is true that since organizations structure, culture and climates are not identical similar, the likelihood is that also the type of outsourcing organization will  .
During the study, the author learnt and observed that for firms in this case UBA Bank to effectively carry on with their human resource outsourcing activities well, it is important all the bank’s stake holders to be involved. This reduces chances of corruption and favouritism which may affect the search for most qualifying vendor quality services. The author also observes that there is need to improve and or call for better services―a case in point is general cleaning as well as catering services  .
According to responses from interviewees of UBA Bank Guinea, the bank considers greatly considers human resource hence, the bank often considers technical skills or expertise a major factor while deciding to outsource or otherwise human resource functions/activities. Indeed, the bank considers outsourcing most employees who have longer and demonstrable experience which UBA Bank often does with two key questions 8 which the bank management outlined as a tool to help them outsource the best quality in regard to the needs of the bank. The above resonates well with other scholar’s views who argue that outsourcing should be based on bringing on board members who will bring expertise to the firm   .
In conclusion, since 1990’s human resource outsourcing has become common with organizations and firms embracing the strategy for various reasons. In banking sector, as a result of high competition for market, several banks have resorted to outsourcing as a strategy to keep them in business. Among other reasons advanced for human resource outsourcing, there is the following: many organizations opt to do outsourcing to get experts to perform their activities yet it would be expensive to get such experts from in-house. Advocates of outsourcing also argue that the strategy is cost effective as it enables firms or organizations to cut costs for non-core activities among others.
It is however important to note that, outsourcing process if not handled careful and done while considering the goals and objectives of organization’s human resource department can be of no impact or unsuccessful since this may result into failure to achieve the organization’s HR goals and objectives. It is however important to note that, several studies contend that when right decisions are made before outsourcing decision is done, the benefits of human resource outsourcing outweigh the negatives   .
1 Grauman, K. and Paul, (2005). Top 10 mistakes when outsourcing benefits. Employee Benefit News 1. Employee Benefit Advisor: http://eba.benefitnews.com).
2 Ivan Mitchell and Phil James, Outsourcing transitions and the employment relationship implications, Human Resource Management Journal, 27, 4, (614-629), (2017).
3 Personal Interview with UBA Bank (Guinea), 16 July 2018.
4 Outsourcing object(s) can be defined as any activity that is under consideration for outsourcing. Such activities may include but not limited to; core distinct, core and core close activities.
5 Strategic alliances include for example contracts.
6 BA Bank Guinea has over Ten branches of Banks in different parts of Guinea. Broadly, UBA Bank has more than 7 million customers and 750 branches all-over Africa and currently is operating in 19 countries on the continent.
7 Management methods may include the so-called SWOT analysis.
8 According to response from UBA Bank manager Guinea Conakry, whenever they are to go for outsourcing, the team responsible with outsourcing process is at the back of their mind guided by two questions answering; 1) Of what impact will outsourced human resource activity be to the success of UBA bank? 2) What will be the impact to the Bank’s activities and the bank’s employees that are not considered in the process.
Conflicts of Interest
The authors declare no conflicts of interest regarding the publication of this paper.
- Aims & Scope
- Editorial Board
- For Authors
- Publication Fees
- Open Special Issues
- Published Special Issues
- Special Issues Guideline
- E-Mail Alert
- OJBM Subscription
- Publication Ethics & OA Statement
- Frequently Asked Questions
- Recommend to Peers
- Recommend to Library
- History Issue
Copyright © 2023 by authors and Scientific Research Publishing Inc.
This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License .
- Journals A-Z
- Publication Fees
- For Authors
- Peer-Review Issues
- Special Issues
- Manuscript Tracking System
- Translation & Proofreading
- Volume & Issue
- Open Access
- Publication Ethics
- Finance & Accounting
- Customer Service
- Human Resources
- Infrastructure Management
- Application Development
- Robotic Process Automation
- Accounts Payable
- Accounts Receivable
- General Accounting
- AWS Cloud Services
- Azure Cloud Services
- Video Testimonials
- Case Studies
Peak Performance Blog
Subscribe to receive real-world perspectives on today’s business operations and IT challenges
HR Outsourcing Case Study: Service Desk Achieves 99.6% Customer Satisfaction
Our client is a leading, publicly-traded, global consumer goods corporation that has operations on six continents, with more than 55,000 employees and over $34 billion in revenue. Our client’s division provides a range of shared services functions from Costa Rica for the corporation’s business units in the Americas, including North, South, and Central America and the Caribbean. A key area of service is the Human Resources (HR) Service Desk, which includes support for the company’s current and past employees.
The client had set up a centralized team to support HR administration activities. However, the volume of requests from the more than 7,000 employees across the Americas was overwhelming the current team structure. Without formal processes, customer service was poor and inconsistent – often lacking follow-up and visibility into the status of issues and how they were being handled.
To help manage the volume and improve overall customer satisfaction levels, the client wanted to create a Level 1 HR Help Desk function to triage initial contacts, resolve more basic requests, and escalate issues that required more detailed responses. With no experience establishing an inbound contact center-type function, they decided to outsource the service to a third party.
A key criterion was finding an outsourcing partner based in Costa Rica, where the client’s shared services center is located. The client prioritized choosing a provider located near its current center to make it easier to facilitate the transition, collaboration, and communication between the two parties.
SOLUTION & APPROACH
Auxis was selected as the ideal partner because of its deep expertise in designing business processes and operating IT Service Desks and Customer Service Centers for dozens of other clients for more than 10 years.
Key steps of the transition included:
With no formal processes previously in place, Auxis built a High-Performance HR Service Desk from the ground up. Auxis’team defined the scope the help desk would support with the client’s executive team and established protocols to address those issues and escalate them appropriately .
Since 2014, Auxis has provided Level 1 HR Support Services via phone, email, and employee portal to the company’s past and current employees in 16 countries across the Americas , including the U.S., Canada, Brazil, and the Caribbean. Auxis’ team also handles inquiries from related third parties , such as banks seeking employment verifications.
Specific support services include:
- HR Help Desk
- HR Administration
- Benefits Administration
- HR Compliance and Administrative Reporting
The Auxis team provides multilingual support to the diverse Americas region, with resources fluent in Spanish, English, French, and Portuguese .
Auxis created a leveled team structure to support more complex service requests . Junior Agents are supplemented by Senior Agents and a Team Leads to increase the level of support from Level 1 to essentially Level 1.5, with defined protocols on service requests that needed escalation and follow-up.
Auxis provided the operating platform for Level 1 Support, using the Five9 Contact Center System for inbound calls and self-service portal access . However, since the client utilizes the same HR processes at three shared services centers globally, Auxis also customized its solution to incorporate other systems that the client already had in place . After the program started, Auxis further adapted its services to accommodate the client’s transition to cloud-based computing – for instance, moving from managing SAP files electronically to training its teams to become experts in cloud-based Success Factors software.
To maximize security and manage complexity, Auxis accessed the client’s systems through a special connection tunnel that was only available to select users from the Auxis Global Delivery Center in Costa Rica.
With an outsourcing model focused on functioning as an extension of the client’s team, Auxis created formal processes for handoffs, escalations, and interactions between internal and outsourced teams that center around daily communication. For instance, the Auxis team is tasked with managing employee absences, which includes inputting vacations and sick leaves. While the client’s internal team handles the more complex payroll process, the two teams work together seamlessly to ensure payroll is calculated correctly based on absences and issues are resolved quickly.
Auxis provided a Quality Assurance (QA) program through its Customer Support Center of Excellence (CoE) to measure team member performance against established company standards, report on results, and proactively address any performance concerns with additional coaching and training.
Auxis was able to quickly establish a fully functioning Human Resources Help Desk, working with the client to define specific service level metrics as well as service-level reporting. While the program initially supported employees in Latin America and the Caribbean, excluding Brazil, the client recognized its effectiveness early on and increased the geographic scope to include Brazil and North America.
Some of the key benefits the client has been able to achieve through its HR outsourcing relationship with Auxis include:
99.6% Customer Satisfaction Score
With structured processes, best practices, best-in-class technology solutions, and proven talent, Auxis delivered a higher level of service to employees that quickly achieved near-perfect results in customer satisfaction surveys.
HR Support that Significantly Beat Client Targets
From the start, the Auxis team delivered overall performance metrics that significantly surpassed the high targets the client set:
- 98+% QA scores (97% target)
- 99+% Process Accuracy (98% target)
- Average Handle Time of 4:37 minutes (6:00 minute target)
- Average Speed to Answer of 15 seconds (45-second target)
- Abandonment Rate of 2% (4% target)
Flexibility to Scale Up or Down as Business Evolves
The Auxis team handles approximately 1.2 tickets per employee per month for the client across all channels – averaging more than 8,000 tickets per month for the more than 7,000 current and past employees it supports. Auxis also provides the ability to scale resources up and down as demand changes .
Improved Visibility and Structure Around Ticket Status
Auxis provides detailed reporting on the various service requests , including a breakdown by location, category, employee type, and more. As a result, the client gains visibility and insight into where tickets sit and how they are handled.
Simplified Talent Management & Access To Best Practices
By outsourcing this function to Auxis, the client does not have to deal anymore with the ongoing effort of hiring, training, and retaining a Help Desk Operation that typically experiences high turnover and service issues if not managed properly.
The client was also able to get access to help desk best practices and systems for a fraction of the cost.
Internal Staff Freed to Focus on Higher-Value HR Functions
Under the old structure, a lack of formal processes meant any HR employee could be tasked with any service request that came in. By creating a formalized, outsourced HR Service Desk, in-house employees can stay focused on more important HR tasks like payroll and employee retention.
Follow us on LinkedIn to stay updated on our latest thought leadership & insights published daily
Enjoying our content? Follow us on LinkedIn and stay updated!
Auxis Marketing Team
Still Running Your Help Desk In-House? Maybe It’s Time to Consider Outsourcing
Online Sep 22nd, 2021 - 12pm ET
Step-by-Step Guide to Successfully Outsourcing Your Help Desk
Sign up to receive our newsletter with insights and thought leadership to achieve peak performance.
- NEARSHORE OUTSOURCING
- FINANCE & ACCOUNTING
- INFORMATION TECHNOLOGY
8151 Peters Road, 3rd Floor Fort Lauderdale, FL 33324 PH: 954-236-4000
North East Office
500 7th Avenue New York, NY 10018
NEARSHORE DELIVERY CENTERS
America Free Zone, Building C8, 5th-6th Floor Heredia, Costa Rica PH: 506-4000-1585
Barranquilla, Colombia Medellin, Colombia Mexico City, Mexico
Academia.edu no longer supports Internet Explorer.
To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to upgrade your browser .
Enter the email address you signed up with and we'll email you a reset link.
- We're Hiring!
- Help Center
Outsourcing of Human Resource Functions: An Exploratory Case Study
by Ng Kim-Soon
In this era of rapid economic growth, HR department plays an important role in a company. HR function outsourcing is important to help industries to be more efficient and cost effective. Outsourcing is the delegation of the non-core tasks by an industry to the outsourcing company due to the substantial amount of time and resource required by employee management. HR is growing continuously and is transforming from operational nature to strategic function. This research explores the theories, the current issues and challenges of HR management, factors influencing HRO and the benefits of HRO in manufacturing industries. In this qualitative study, data were collected from six manufacturing industries. Purposive sampling and semi-structured interview was used to collect the relevant data. Manpower management and security management are the common tasks that have been outsourced. The common issues and challenges faced by industries are high employee turnover rate and employee's problems faced. As such, manpower and effectiveness of management are the main themes for adopting the outsourcing. It was found that manufacturing industries that HRO are able to elevate their effectiveness in managing manpower, its focus not purely on cost reduction, but on manpower and its effectiveness in management in enhancing industries performance and to support its growth.
Free Related PDFs
Purpos:The present paper focuses on different types of HR outsourcing and the factors which need to be considered before a company goes for outsourcing of Human resource Functions. Design/methodology/approach:A review of available literature was done in order to understand how today's HR firms offer a wide variety of services to companies that need to focus on their core business activities and still establish and maintain good HR policies and to explore the factors that affect the HR outsourcing decision with special emphasis on a proper cost benefit analysis of HR outsourcing. Findings:The findings of the paper implicitly point out that the decision of HR outsourcing is contingent upon factors like flexibility, availability of adequate resources, affordability, and acceptability (openness to information-sharing) etc. The paper also suggests a systematic process and certain pre-requisites to successfully execute HR outsourcing. Originality/value:Based on literature review, the ...
In today’s rising competition, the benefit generated by the development of high organizational quality is becoming more important. The role of human resource tasks and the culture of organizations can impact the achievement of substantial organizational effectiveness, which in return draw much more attention from both theoreticians and practitioners. Outsourcing is deemed one of the tools which companies use to reinforce their core competencies to assign their resources effectively. The rise of globalization has transformed outsourcing into one of the broadly adopted business plans towards supplying exceptional services to consumers. As can be seen by the ever-increasing trends in outsourcing, the literature on how outsourcing activities affect manufacturing companies’ results is insufficient. The main aim of this research was to investigate the impact on the performance of the outsourcing of human resources functions. Therefore, the results revealed that outsourcing HR functions pl...
Strategies for the Effective Management of Human Resources Outsourcing and Performance by Dee Thi Thuy Hoang MBA, Concordia University, 2011 MA, Concordia University, 2008 BA, University of Minnesota, 2004 Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration Walden University December 2018 Abstract Human resources (HR) outsourcing has become a norm that organizational leaders leverage as a strategic tool to achieve various business objectives. However, the outsourcing of specific HR functions generates unintended consequences and impacts the performance of internal staff. The purpose of this qualitative, descriptive multiple case study was to explore the strategies used by HR managers to mitigate the negative effects outsourcing has on HR staff performance. The conceptual framework underpinning this research was transaction cost theory. Data were collected from 6 HR executives with experience leading HR outsourcing i...
Fang Cooke , Anne McBride
2005, Human Resource Management
Journal of Business Research
Gervas Mbwga Sinsakala
2005, … Institute of Management Research Paper No. …
Abstract. Human resource is the basis of all processes. It is an instrument that must be accepted despite all technological advances in a rapidly changing environment. The approach to this issue has begun to become more professional with the other processes followed. Thus, the problem is to understand the relationship between the decisions of the companies’ Human Resources department managers and HR consulting companies regarding their expectations from each other. Focusing on whether or not fundamental decision – making problem will be outsourced and also to obtain insight that would lead the way for all kinds of communication activities to be conducted towards the target population in the forthcoming days. A qualitative section of the study was conducted to thoroughly understand all the needs, expectations and experiences of HR professionals from various organizations composed a sample of 15 companies. The data were collected through in-depth interview method. A questionnaire was ...
2007, … International Review of …
This paper develops a comprehensive explanatory approach to the outsourcing of Human Resource (HR) functions and the resulting demand or non-demand for personnel services by companies (eg, interim management, outplacement services, consulting in the field of ...
FREE RELATED PAPERS
Md. Nazmus Sakib
This study aims to comprehensively review the literature on human resource outsourcing (HRO) published from 2001 to 2021. The study begins with metadata analysis on 69 papers and presents insights into 32 papers on HRO identified from the Scopus and ISI Web of Science databases. The literature is classified based on content analysis, which comprises conceptual understanding, drivers and barriers, functions outsourced, and firm performance. The study reveals that cost advantage, organisational learning, and the opportunity to concentrate on core business functions motivate the organisation to practice HRO. However, the lack of psychological contact among current employees, the risk of opportunism in the freelancing organisation, lack of management legislation, and prior experience are the common barriers to HRO adoption. Despite thesedrawbacks and barriers, recruitment, payroll processing, and technology-centric human resource (HR) activities are standard HR functions outsourced by organisations. The contributions of this study are to offer an integrated and conclusive definition of HRO and provide a simple, easy-tounderstand, yet comprehensive framework for understanding HRO practices in any organisation. Researchers and academicians can utilize this paper to explore future research directions while gaining a thorough understanding of the HRO concept.
The emergence of globalization has made outsourcing to become one of the widely embraced business strategies for delivering outstanding services to consumers in the manufacturing sector. However, in spite of the increasing trend in outsourcing arrangements, there are inadequate literature underpinnings on how outsourcing human resource activities affect performance of manufacturing firms. The main objective of this study was to investigate the effects of outsourcing human resource activities on performance of manufacturing firms in Kenya. Methodology: The study adopted case study research design. The study targeted employees in the rank of senior staff and middle staff in Capwell Industries Limited. A target population of 480 employees from which a sample of 145 respondents was taken was used. Purposive and stratified sampling technique was used in selecting the respondents. Significance: The study covered the effect of outsourcing human resource functions on performance of manufacturing firms at Capwell Industries Ltd in Kenya. The study focused on human resource functions which are; recruitment, training, payroll and Human Resource Management Information Systems and how outsourcing of these activities affect the performance at CIL. Findings: Findings of the study indicated that the practice of outsourcing employee recruitment services was found to result to a negative slope on firm performance. Respondents felt that outsourcing employee training was positively associated with employee competence, hence improving firm performance. The study also established that outsourcing employee payroll was viewed by respondents with skeptism and that it had significant negative effect on firm performance. Findings have shown that outsourcing HRMIS was negatively but insignificantly associated with firm performance. From the study findings, the researcher recommends the manufacturing firms to consider assigning recruitment functions to insider management or involve them fully in case of outsourcing..
Mohd Fitri Mansor
MATEC Web of Conferences
The phenomenon of outsourcing has spawned a rich body scholarly reseach in sveral decades. However, the answer to one of the pertinent question has remained elusive: Does cost reduction and business strategy really matters to the human resource outsourcing impacts. Looking at this question it is important for the organization to embark on the practice of human resource outsourcing to save operating cost and remain competitive. Therefore, the objective of this study is to investigate the effects of cost reduction and business starategy towards human resource outsourcing impacts. Both quantitative and qualitative methods were employed and the top management in Malaysian Government Link Companies (GLC’) is the unit of analysis. The findings revelaved that, both variables are significant statistically and non statically i.e from the experts opinion. Finally, the study also provides useful directions for future research, HR Practitioners and policy maker particularly in managing and orga...
Journal of Applied Social Science
This paper attempts to scrutinise the challenges that the corporate domains in Bangladesh may face and to explore the prospects that these domains can manage to have derive while pursuing an effective HR outsourcing strategy in the management level. The major objectives of this study have therefore been set to examine the likely correlations between the HR outsourcing and networking activities, to identify the types of industry(ies) that is/are very likely to seek the HR outsourcing service as well as to check the length of time of obtaining the outsourcing service. This study observes that networking activities do play a big role in HR outsourcing activities for about a couple of years usually. The findings of this research can be treated very useful in the sense that it can enable strategic apex managers to redesign their work methods towards effective HR outsourcing, resulting in positive effects on their work performances, thus creating a possibility of moving upward on the corp...
International Journal of Human Resource Studies
By HRO we mean using a third party to undertake HR functions for an organization. In Bangladesh, from the last ten to twelve years many private organizations (non-govt.) are getting accustomed with the practice. Cost and time reduction, touch of expert work etc. are the various reasons for which the practice is getting significance day by day. But the organizations that are providing services are facing some challenges. The purpose of the study is to work with these challenges in depth. As it is a very new practice the numbers of service providers are very limited (not more than 30) in the country. For data collection a questionnaire including both open-ended and close-ended questions was designed. Situational cases were also used. From the study it is found that govt. rules-regulations, service quality of providers and mismatch with organizational culture firms are the main sources of challenges in this sector.
Global Outsourcing and Offshoring
2004, Journal of Business Research
Considerable anecdotal evidence suggests that an organization's use of outsourcing will have an influence on its performance. However, few empirical examinations of the outsourcing–performance relationship have been conducted. In this study, we analyze the relationship between the outsourcing of human resource (HR) activities, namely training and payroll, and firm performance. In addition, we hypothesize that the outsourcing–performance relationship is not the same for all firms. As a result, we test for the potential moderating effects of firm size. Our sample consists of 94 manufacturing firms representing 16 two-digit SIC code industries. Results indicate that both training and payroll outsourcing have implications for firm performance. However, findings regarding a moderating effect of firm size were inconclusive.
1970, Journal of Business Strategies
A theoretical model is presented that identifies environmental and organizationalcharacteristics that affect human resource (HR) performance in an organization.Specifically, we address the issue of when and under what circumstancesdoes HR outsourcing contribute value to the firm by attempting to identify environmentaland organizational characteristics that affect HR department performanceand how HR outsourcing mediates that relationship. We propose that suppliercompetition in the HR provider market has a direct effect on the amount of HRoutsourcing which in turn has a direct effect on HR performance. Environmentaluncertainty (primary, competitive, and supplier) is proposed to moderate the relationshipbetween amount of HR outsourcing and HR performance while assetspecificity is proposed to moderate the relationship between supplier competitionand amount of HR outsourcing. An earlier version of this paper was presented atthe Southwest Academy of Management meeting in Houston, Texas, M...
2012, International Journal of Human Resource Studies
This article reviews developments in human resource outsourcing (HRO) in recent years, particularly in light of the severe economic recession prevailing since 2007. It establishes that companies are increasingly outsourcing routine HR processes, and in some cases, critical HR processes in view to cut costs. The article takes the view that while such a strategy could be viable in the short term, its long-term strategic effectiveness is questionable. This view is founded on widely accepted assumptions that people are critical assets in organizations, thus, commanding that companies maintain a strong hold on vital employee commitment processes. Outsourcing may not be the only valid framework for the future; companies must consider alternatives. Key words: Outsourcing; HRO; economic recession; cost saving; globalization; transaction cost.
The automobile industry has seen phenomenal growth during last two decades or so. It was observed that there was a tremendous pressure on the giants in this field to produce vehicles and fulfill the production processes carried out by these companies. These changes are distinct from the changes forced by the technological development. Further, these changes have added different dimensions to the traditional approaches in almost every function of the business. Certain new concepts have emerged, such as, Vendor Development, Supply Chain Management, Forward and Backward Integration of the production processes, Outsourcing etc. while introducing each of such new concepts, it has been stated that these concepts will lead to reduction of cost with high quality and greater speed in the production processes. This has led to increase in the number of SSI units supplying materials to these giants. Even the giants have shown interest in starting such a venture. The work load was such heavy that these vendors (i.e. SSI units) have further proceeded for subvendor ship. This has led to the creation of multi-layer production process for the production of one unit/part of the unit. The multi-layer, hierarchical process leads to decrease in margin of profit at each such level of process as also reduction in quality, delay in supply and increase in the number of rejections. As Employment generation has been one of the important objectives of development planning in India. This multi layer outsourcing has increased the level of employment as this tier–II and tier-III suppliers do not install high tech machines and hence employees large number of work force. Interest in measuring human capital has also been apparent in India. While the other forms of capital, including material, equipment, tools and technology, only represent inert potentialities, it is the human capital that converts this potential and energizes the creation of wealth.”
Abstract: The present paper focuses on different types of HR functions outsourcing and the factors which need to be considered before public sector go for outsourcing of HR Functions. A review of available literature was done in order to understand the risk and benefits of outsourcing HR Functions that need to focus on their core business activities and still establish and maintain good HR policies and to explore the factors that affect the HR outsourcing decision with special emphasis on a proper cost benefit analysis of HR functions outsourcing. The findings of the paper implicitly point out that the decision of HR outsourcing is contingent upon factors like availability of adequate resources, flexibility, affordability and acceptability. The paper also suggests a systematic process & certain pre-requisite to successfully execute HR Functions outsourcing. Keywords: Human Resource Functions, Outsourcing, Public sector, availability of adequate resources, flexibility, affordability and acceptability.
2000, SSRN Electronic Journal
Dr Sudhinder Singh Chowhan
Human Resources outsourcing has become a way for businesses to save money, but has also become a problem in keeping organizational environments the same (Cook, 2000; Cobb2009; Mol, 2007). Outsourcing includes work that can be done by employees, but services can also be provided by an outside vendor for a lower price (Cook,2000), and can affect an organizations performance (Mol, 2007). There are parts of Human Resources functions such as staffing, recruiting, training, succession planning and organizational development, and benefit planning that can be outsourced (Cook, 2000). Studies have looked at the difference between organizations that have outsourced functions, and businesses that have not outsourced Human Resources functions and found that personal and organizational growth was inhibited by outsourcing (Glaiser, 2014). There are studies that focus on the performance of an organization after the decision to outsource functions is implemented (Mol, 2007) but until recently studies have neglected to look at organizational culture and the change after outsourcing is implemented. Outsourcing has primarily been used to save a company money, but organizations have never considered the cultural shift that can happen when Human Resources functions are outsourced.
Bonfring International Journal
Globalization has set the benchmark for the organizations in terms of productivity, quality, cost, delivery, safety, morale and environment. Any organization which is required to compete globally and to sustain in the market, has to invariably adhere to international standards so that the stability of the market share and the survival of the business will be ensured. All the functions are required to focus on critical parameters to meet the business objectives of the organization at the end of the day. The function of Human Resources also keeps its plate full pertaining to all the functional parameters which are critical to the business. The stand alone elements of HR function like Talent Acquisition, Performance Management System, Capability Development, Succession Planning and Employee Engagement are now very well connected, aligned and integrated with the overall of business objectives of the organization. Attrition is the key challenge for the HR function in the contemporary business environment which has got direct impact on the performance of the business both positively and negatively. Though HR takes various initiatives to reduce the percentage of attrition, developing the covers and bringing them on the board or replacing the vacant positions by formal recruitment method, be it critical or non critical, in the shortest possible turnaround time is a key performance indicator of HR function. In this context, this article attempts to explore that how attrition of critical positions is being managed strategically through a structured Succession Planning and the allied elements like Competency Assessment and Capability Development and also the unique method applied even to manage the attrition of junior level and operating level employees in the manufacturing industries.
The emergence of globalization has made outsourcing to become one of the widely embraced business strategies for delivering outstanding services to consumers in the manufacturing sector. However, in spite of the increasing trend in outsourcing arrangements, there are inadequate literature underpinnings on how outsourcing human resource activities affect performance of manufacturing firms. The main objective of this study was to investigate the effects of outsourcing human resource activities on performance of manufacturing firms in Kenya. Guiding Theories: Four theories guided the study; Transaction Cost Economic (TCE) Theory, Resource Based View (RBV) Theory, Core competency theory and Contractual Theory. Methodology: The study adopted case study research design. The study targeted employees in the rank of senior staff and middle staff in Capwell Industries Limited. A target population of 480 employees from which a sample of 145 respondents was taken was used. Purposive and stratif...
Radha R. Sharma
Outsourcing of non core activities has been adopted as a strategic tool by global firms which has resulted in globally distributed work. Several macro and micro HR issues have surfaced in organizations engaged in globally distributed work which impact not only the work and organizational productivity but also the people delivering that work. These need to be addressed adequately for the benefit of all the stakeholders. Paucity of empirical work in this emerging field has provided impetus to undertake this research which includes study of motivational factors in these organizations.
2010, Journal of Applied Business Research (JABR)
Human resource (HR) outsourcing research has primarily focused on the client with little attention paid to the service provider. As an initial step in understanding this important stakeholder in the HR outsourcing relationship, this study focuses on the financial performance of HR service firms that publicly announce outsourcing contracts. From the provider’s perspective, we investigate firm performance changes subsequent to outsourcing contract announcements, using a sample of 94 publicly available press releases. Our tests show that in the long term, small HR service providers contracted by large client firms experience improvements in operating profitability and margins.
2017, International Journal of Research in Commerce and Management
2015, 2015 International Symposium on Technology Management and Emerging Technologies (ISTMET)
2011, International Journal of Manpower
2005, International Journal of Manpower
2020, Development and Learning in Organizations: An International Journal
Purpose The construct of Organizational Learning has been studied through various perspectives but still there is a dearth of literature on how the organization’s outsourcing activities impact the learning process, specifically human resource outsourcing. This paper intends to link these two concepts. Design/methodology/approach Several research articles related to Organizational learning and outsourcing have been read and reviewed. Based on the understanding from the literature the insights are summarised and discussed. Findings This paper demonstrates linkage between organizational learning and human resource outsourcing by putting forth the impact human resource outsourcing can have on organizational learning from both positive and negative lenses. Originality/value Not many studies have established the linkage between two important constructs- Organizational Learning and Human Resource Outsourcing. This paper intends to bridge this gap in the literature by highlighting both posi...
George Isivie Esther
2020, World Journal of Innovative Research
Vijay Pereira , Valerie Anderson
2011, Journal of World Business
Abstract Human resources offshoring (HRO) forms a significant part of the Indian business process offshoring (BPO) market. This paper assesses HRM in the emergent HRO sector. Longitudinal case-study research enables an in-depth examination of the development of HRM practices in an HRO organization where offshored HR services are delivered from two different cities in India. The paper highlights the development of HR activities focused on extrinsic incentives, rewards and penalties to influence employee behaviour. These practices are mediated by indigenous traditions, the nature of the service offering; management style and an aspiration to ‘role model’ systematic HR practices. Keywords India; Human resource management; Human resource outsourcing; Human resource offshoring; Business process outsourcing
2015, Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis
In order for the companies to maintain their positions in the current market, they are forced to find new opportunities and ways to streamline their operations. One of such options for the company is outsourcing, which is the subject of this paper. Given the increasing trend of outsourcing in human resource management, the article deals specifically with the issue of outsourcing of selected human resource (HR) activity – the recruitment and selection process (R & S). The main goal of the research study is to establish a set of determinants of the success of implementation of R & S outsourcing. The research was carried out by using a questionnaire survey from February 2013 as the primary data source. Questionnaires were distributed to a sample of organizations operating in Slovakia. In order to achieve the research objective, six hypotheses have been contested by correlation analysis and Mann Whitney U test, while in five cases statistically significant correlation between selected d...
- We're Hiring!
- Help Center
- Find new research papers in:
- Health Sciences
- Earth Sciences
- Cognitive Science
- Computer Science
- Academia ©2023
HR CASE STUDIES
REDUCE COSTS AND FREE UP TIME WITH CBR’S EMPLOYEE MANAGEMENT SERVICES
HR Case Studies on Human Resources Outsourcing
Here are some real-life examples of how CBR has helped current clients:
Legal Arizona Workers Act Case Study
The efforts made by CBR to educate the public about the Legal Arizona Workers Act demonstrated the company’s commitment to providing clients with the highest standards of customer service while improving the public’s view of the PEO industry.
Customer Service Case Study
A local manufacturer relies on CBR’s human resources expertise to assist a key employee facing challenges with the E-Verify system.
PEO Case Study
A small Phoenix real estate company utilizes PEO’s full scope of services to improve their bottom line, saving $120,000 in payroll taxes and benefits expense.
A Satisfied Client
My wife and I have been using CBR for many years and both feel it’s a great value for the efficiency and security we get for our companies. Having had some negative experiences with employees in the past, they provide a great layer of protection and comfort going the extra mile for us. They offer tremendous value and it goes unsaid that I would recommend them.
Scott T., CBR Client
THE ULTIMATE HR GUIDE
REQUEST A PROPOSAL OR SPEAK WITH AN HR CONSULTANT
Call us at (602) 200-8500 or request a proposal and an HR Consultant will contact you to discuss customized HR services for your business.
- Our Philosophy
- Our History
- Why Outsource with HR Strategies?
Get My Free HR Consultation Today
If you're a current customer, click here
- Human Resources Administration
- Human Resources Consulting & Support
- Payroll Administration
- Employee Benefits
- Employment Regulatory Compliance
- Human Resources Information System
- Customized Training Strategies Program
- Workers Compensation Administration
- Employee Assistance Program
- Employment Practices Liability Insurance
HR Strategies Assists in OSHA Compliance and Reduction of Penalties
Challenges: HR Strategies provides aid and counsel on a variety of government regulatory compliance issues. One of the biggest issues which HR Strategies aids…
HR Strategies Relieves Client of Employee Benefits Administration Hassles
Challenges: HR Strategies supplies its clients with a variety of human resource administration solutions. One of the biggest time relief solutions that HR Strategies…
HR Strategies Improves Client Satisfaction with Web Access
Challenges: HR Strategies supplies a multitude of human resource solutions in a variety of ways to clients. Through each method, HR Strategies is striving…
HR Strategies Advances Employee Retirement Funds by Offering Clients 401(k)
Challenges: HR Strategies is a Human Resource company, which supplies human resource solutions to many different client companies. One of the most sought after…
HR Strategies Aids in DOL Audit
DOL Audit Challenges: HR Strategies supplies a variety of human resource solutions to many different client companies, including HR consulting and regulatory compliance. For…
HR Strategies Delivers All Payroll On Time During Week Long Ice Storm
Ice Storm Payroll Delivery Challenges: With HR Strategies powerful integrated on-site support and personal service, clients can rest assured that the responsibilities of payroll…
HR Strategies Provides Swift Assistance in Workers’ Compensation Injury
Workers’ Compensation Injury Case Challenges: HR Strategies offers a variety of human resource solutions to their clients. One of the most sought after solutions…
The Keys to Running an Ethical Organization
What do Hewlett Packard’s spy operations, Wells Fargo’s fake customer accounts, and Mylan Pharmaceutical’s price-gouging all have in common? A lapse in Business Ethics….
6 Critical Leadership Skills That Will Take Your Career To The Next Level
All these skills apply regardless of your current job status, role, title, or position. It doesn’t matter if you’re just starting an entry-level position,…
HR Strategies Payroll Case Study
HR Strategies Delivers All Payroll On Time During Week-Long Ice Storm Challenge: With HR Strategies powerful integrated on-site support and personal service, clients can…
HR Strategies Regulatory Compliance Case Study
HR Strategies Assists in OSHA Compliance and Reduction of Penalties Challenges: HR Strategies provides aid and counsel on a variety of government regulatory compliance…
HR Strategies HR Consulting Case Study
HR Strategies Aids in DOL Audit Challenges: HR Strategies supplies a variety of human resource solutions to many different client companies, including HR consulting…
HR Strategies Workers’ Comp Case Study
HR Strategies Provides Swift Assistance in Workers’ Compensation Injury Challenges: HR Strategies offers a variety of human resource solutions to their clients. One of…
HR Strategies Employee Benefits Case Study
HR Strategies Relieves Client of Employee Benefits Administration Hassles Challenges: HR Strategies supplies its clients with a variety of human resource administration solutions. One…