Course: BUS 311-1801 | HR Management | Professor Buckler | Spring 2021

HR in Small Firms

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    • #6277

      Brielle Buckler
      Participant

      Human Resource departments take different forms across industries and companies based on the functions necessary for an organization’s success, and its capacity and profitability to sustain a comprehensive group. In small/entrepreneurial organizations, HR functions are necessary, but often look very different.

      Whereas a large organization might have employees in many different HR roles (Learning & Development, Compensation, Benefits Administration, HR Business Partner, Talent Acquisition, etc.), small/entrepreneurial organizations might have a smaller group of generalists who manage several different aspects of HR.

      Forbes’ 2018 article titled “Benefits Of HR Outsourcing: How Even Small Businesses Can Provide Great HR” sheds some light on the pros and cons of outsourcing parts or all of an organization’s HR function.

      What are some of the reasons organizations outsource HR? What benefits and potential risks do these companies acknowledge by doing so? What does outsourcing mean for the HR industry, and future job prospects for HR professionals?

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      In order to receive full credit for this assignment, all components of this assignment are due by 11:59pm ET on Sunday, May 16, 2021. You should first contribute a thoughtful post of your own before viewing/commenting on the posts of others. Once you submit your post, you must respond meaningfully to at least two other classmates’ threads. This assignment is worth a total of ten (10) points — 6 possible points for your original post, and up to 2 points for each of the two responses to your classmates’ posts. Please reference our Discussion Rubric for more information.

    • #7877

      Sow
      Participant

      Organizations are designed to prosper over time. Their competitiveness, their need to gain market share, and protect their notoriety have meaning for them. The human resources department is one of the tools used by organizations to protect themselves from incidents and harm. Its mismanagement can lead the company to a loss of competitiveness, profitability, and law pursuits. Regardless of the size of the organization, several aspects of human resource management require special attention. Now organizations are outsourcing to avoid non-compliance with federal and local laws throughout their human resources process, from hiring, training, evaluating, and compensating employees. In addition, when organizations outsource their HR department, they reduce the volume of work to be managed to save more time to focus on running the business, being customer-centric, or developing new products. Additionally, outsourcing can be a means of protecting themselves against higher turnover, losing talented candidates, or having an intoxicated work environment (sexual harassment, discrimination, fairness issues). salary). Many of these issues lead to fines or loss of employee loyalty.

      However, outsourcing can have some downsides. For instance, the data of your organization such as its standing, health, and wealth can be known by an external entity and even some of the worker’s data. Therefore, outsourcing can increase the likelihood of data sharing and cybersecurity issues. Thus, by outsourcing, the company is taking the risk of losing control of one of the most precious organs of its firm since the HR department represents the heart, the brain, and the lungs of entities.

      The risk of being a consultant is higher nowadays with this new perspective since more founders or organizations are attracted by the outsourcing policy of their HR department. We are starting a new transition in the human resources sector. HR professionals will stay, but as outsourcing gains ground, the likelihood of an HR manager becoming an entrepreneur increases dramatically. The traditional form of human resources manager that requires working within and only for the same company takes another step where it is more opportunistic to have your firm whether it is a PEO (Professional Employer Organization) or HRIS (human resources information system). In other words, if we can call this concept working for “human resource management companies”, that is where we are heading. Instead of being direct employees of a traditional organization like Apple or Starbucks, HR managers become outsourced workers to the company.

      • #7896

        Miko Nourieli
        Participant

        Hello Sow you made a great point about how company and employee data may be at risk when outsourcing HR to other companies, because not even at fault of the companies themselves, data breaches and hacks are all too common nowadays in the modern world, so that was a great point to bring up, thank you for sharing.

        • #7917

          Robert Calaf
          Participant

          Hi Sow,

          I wanted to highlight the part about your post speaking to the likelihood of HR Managers becoming an entrepreneur. Perhaps in this case, they would become entrepreneurial by deciding to start their own HR firm so they could then bring on clients who wish to outsource their HR processes to them. I believe this would be very forward thinking of them since this seems to the early indication of where the HR industry is going in the future. These HR professionals would then operate almost like mercenaries for hire; taking care of the HR processes for multiple companies assigned to them or perhaps directly recruited.

      • #7909

        Richard Ledesma
        Participant

        Hey Sow, You made some really great points about companies being at their own risks when they outsource HR, I liked how you mentioned some advantages and disadvantages, especially the disadvantages. Overall great points, thanks for sharing.

      • #7924

        Sonia Gonzalez
        Participant

        Hi Sow, I like reading your post. As a management a decision-making activity is concerned with a firm’s internal resources, capabilities, and competencies, independent of the conditions in the external environment.

        Thank for Sharing

    • #7890

      Yaritza Rendon
      Participant

      Some of the reasons that companies outsource HR include more funds being available to invest in other areas of the business. Payroll, tax related services and benefits administration are an example of some HR functions that can be outsourced so a business can focus on other important tasks that cannot be automated. Advantages of using service as a software includes it being responsible for upgrades, backups and developing and offering new services as the market demands it. These services ensure that a company is staying compliant with state and federal laws. Some cons include it not being able to advise a business on how to make their benefits package more competitive. Important in-house HR functions include creating the employee handbook and other strategic HR projects that are meant to make the company better. These are requirements better done in-house because they are specific to that company. Some businesses might choose to outsource all or some of their HR department. In the future, I believe outsourcing can lead to companies providing better in-house HR functions.

      • #7902

        Sonia Gonzalez
        Participant

        Hi Yaritza, I enjoyed reading your post. I agree outsourcing can lead in providing a better in-house in the future.

      • #7914

        Jean Muy
        Participant

        I agree with your take on how in house functionality can be something good for the future of companies.

      • #7918

        Robert Calaf
        Participant

        Hi Yaritza,

        I believe as technology continues to improve with time, so will comprehensive HR software solutions that could perhaps take entire HR processes away from human responsibility and help reduce HR labor costs. But like our readings and lecture this unit explained, every company is its own unique situation and not all HR processes are one size fits all. In the end, companies will have to walk a fine line between what the unique needs are of their company in their respective industry and basic standardized HR needs that could be outsourced/automated. Those decisions will be made by senior leadership who are looking at the longer term strategic impact and will have to measure the long term results of those choices.

    • #7891

      Rayon Lambert
      Participant

      Companies outsource for many reasons. These range from not having the budget to include an HR personnel or team, not having enough employees that there is a need to have an in-house HR personnel. Some companies outsource because they do not want to take on responsibility for any HR responsibilities. A company that has only one HR personnel or must hire a part-time HR employee, is at the risk of worrying about competency level and the distrust of the staff if something goes wrong due to these factors.

      Some benefits to outsourcing are the ability to allocate the funds for salary to an HR team to be used for something else. There is the ability to spend less on software that you the company owner can just input the information yourself. Another benefit is that if an HR company is used, they have all the tools to deal with the different industry compliance and changes which you may have to pay to keep your HR employee up to date. With outsourcing, they will deal with all the different aspects of HR which you may have to hire more than one person to take care of. The downside to this is, you will have to contact the company, for any HR decisions, which may take a long period to gain. There is also the issue of how long employees may take to have HR information updated or received. Also, to begin outsourcing it can be a strenuous decision process where you may have to research and may go through trial and error before the right company to suit your company needs can be hired. In another instance, if the software is used, there is the possibility of crashes and eventually outdating software tools.

      I think that outsourcing can be both good and bad for HR professionals. The first thing to remember is that many companies like to know that there is someone in the office who can quickly answer any questions regarding HR issues. Companies that are based on HR only will need staff to be assigned to different teams to have the HR needs of their clients fulfilled. What may happen to HR personnel is that with these companies, they are focused on only one aspect of HR. This could be hiring only or without any aspect of recruiting or policy only without looking at the selection process. HR professionals may have to now specialize in specific areas instead of knowing about all the different areas. Though technology is evolving, there is the need to have someone to learn all the different aspects of the system to input the data. Knowing this I do not think that there will not be a need for HR professionals in the foreseen future.

    • #7892

      Robert Calaf
      Participant

      As the requirements of the modern-day business continue to evolve and expand due to employee needs and regulatory/legal requirements (government laws); HR is becoming an increasingly difficult strategic business component to manage, often with disastrous effects if not done properly. This challenge is even greater for small business owners who often do not have the depth in budget or personnel to have an HR shop. They are left to wear multiple hats in their company and while it may be sufficient to survive day to day; could cost them in employee retention or financial penalties should they not navigate HR issues properly. Financial harm could also come from litigation (lawsuits) brought on by former employees who perhaps were mishandled from an HR perspective; those types of issues are becoming more and more common as managers initiating termination may not be properly trained or fully aware on what they can do or say when terminating an employee. Should the company have a unionized workforce, this challenge is amplified even further since company management would have to strictly adhere to the collective bargaining agreement signed with the union. In an effort to properly mitigate this risk and have the proper HR expertise available, organizations are turning to outsourcing their required HR functions to companies who specialize in HR management.

      The primary reasons for outsourcing HR is to ensure the organization has proper compliance with state and federal laws/regulations so they can avoid fines and government punitive action; to have proper recordkeeping systems of HR essential documents (medical enrollment forms, tax documents, onboarding paperwork, performance reviews etc), and maintain/increase employee loyalty by having proper HR practices, competitive benefits packages, and standardized employee training procedures. These are all HR functions that a business may find it more advantageous to outsource should the price point and benefits be right for their company; this would free those who handled these tasks prior to focus on other areas of development for the business and reduce risk of mishandling. Also by outsourcing the benefits package management to a large HR firm who manages numerous companies; that HR firm has more buying power or leverage in negotiations to get better rates/benefits for its clients because of how many companies it represents. The larger its client pool, the larger its collective bargaining power.

      Outsourcing may have an effect on what the HR industry looks like and operates like in the future should there be widespread adoption of the concept of outsourcing HR; and to what degree it is outsourced. Perhaps in the future, the traditional HR manager/director at a company and their inhouse team does not exist; the entire department could be outsourced or maybe one full time HR person on company payroll to represent the company to the outsourced HR company, deal with the day-to-day operations, and participate in strategic level planning. It would be a minimalist approach to inhouse HR. In this case, future job prospects for HR professionals may see jobs centralized to large HR powerhouse firms that represent a majority of American businesses in various industries. These HR professionals would then have a portfolio of several companies that they manage HR for rather then the traditional inhouse HR rep who just takes care of their own shop. HR professionals would be expected to be well-versed in HR practices for a broad spectrum of company types, industries, and labor situations. I presume a role like this would require a certain percentage of time mandated for travel as well as the HR professional would visit their various companies, they are responsible for in order to carry out the outsourced services; in addition to what would be done remotely. Time will tell what the future looks like for HR but like any role or position in a company; it must evolve to meet the challenges and needs of the future.

       

      • #7895

        Miko Nourieli
        Participant

        Hello Robert, great post. I too was thinking that in the future that there might be large firms of just HR professionals that deal with HR needs of a bunch of different companies and that it would provide a lot of opportunities to HR professionals for more work, but like you said time will tell and maybe it wont be as much of a need as we think.

      • #7903

        Sow
        Participant

        Hello Robert,

        I appreciate the fact that you pointed out the future at the end. The world is changing, and the pandemic has shown examples of many alterations coming up with the remote work for instance. The work environment and the employment strategies are evolving accordingly to the new realities. As future HR professionals, we need to start already scrutinizing the new changes, developing adequate approaches to them, and determining how will find our paths.
        Thanks for having shared your thoughts.

      • #7923

        Zoila Cedeno
        Participant

        Hi Robert.

        As always your posts are always informative and introspective.  Many experts agree with your opinion that the future HR manager/director may not exist and that outsourcing HR duties may become the norm.   As with all other trades and professions, HR managers/directors will have to adapt and evolve in order to remain relevant in their field.

    • #7893

      Sonia Gonzalez
      Participant

      Human resources management is an essential but complex function for any company, and many opt to outsource. Most companies that outsource human resources functions do so by joining a professional employer organization that handles everything from hiring and onboarding employees and managing benefits, developing training programs, and overseeing compliance with employment rules and regulations. Although outsourcing HR might not be suitable for all businesses, there is some significant advantage to doing so, especially when saving time and money. One of the essential advantages of outsourcing HR functions is that it can save your company money. In addition, when running a small company with little time and resources, the last thing you want to do is  to focus your attention on the core business that’s your bread and butter.
      One of the advantages is potential savings for the company because it could help other areas of the organization free up HR staff to focus more on complex projects that will benefit the company at a higher level. For example, many workforces used the staff employees to cover an area such as benefits, record keeping, and health and safety issues. In addition, they are allowing head-hunter groups to do the company’s recruiting for staffing. With a more specialized HR staff, better concentration can be direct to detailed tasks and better project outcomes. In addition, freeing yourself from things such as payroll this familiar place and straight-forward can free up staff cost.
      The disadvantages are that outsourcing may not save the company as much revenue as expected and disconnection between your HR staff and the company’s employees. In addition, in loss and the respect and trust in the company due to employees not having a direct in-house source to bring questions or problems, the outsourced company may not know the in and out of the company’s fiber. Finally, outsourcing can cause complex tasks for management staff within the company when it comes to records; having to go thru a company outside will cause more time-consuming tasks than if the company kept the documents on the campus in-house. Outsourcing of records can become a security issue when kept on a home on-site data source, and it’s safer than having electronic traces to other facilities for outsourcing.
      In some of the research I saw online, I see mixed reviews on this issue. Most indicate that companies outsource to save money, but I find that this is misleading. Research shows that in some instances, outsourcing is not cost-effective at all. If the HR outsourcing isn’t intimately familiar with the company’s culture or the industry, offloading too much of the HR function can lead to problems down the road. The lack of personal ability could cause anxiety and distrust within an organization’s intimate relations with its workforce. As a company grows, many professionals feel that anything that has to do with employee relations, such as performance evaluations or management conflicts, is better left to internal people to handle the situations. Also mentioned is that if HR is a strategic asset for a firm, it’s best to keep its functions in-house. On the positive side, most feel that it does provide a much more cost-efficient service to have a dedicated outside company handle the simple task within the HR realm such as recruiting, payroll, and outside testing for the job requirement. There are many tasks that HR personnel handle that most feel takes away from more significant issues and projects, so an outside source could free up and let highly trained HR personnel handle issues that are bigger to the company.

      • #7900

        Sow
        Participant

        Hello Sonia,

        It is interesting to see how you pointed out the psychological effect of outsourcing on the workers. Being directly engage within an organization and being just a kind of service provider are two different things. Workers recruited directly within a firm, in my opinion, are more productive and loyal. That is a psychological fact. Therefore, by outsourcing, instead of building a workforce, organizations may end up with weak and unreliable personnel.
        Thanks for sharing.

      • #7922

        Zoila Cedeno
        Participant

        Hi Sonia.

        I enjoyed reading your post.  I think you make a valid point about outsourcing creating time-consuming tasks when attempting to locate documents.  Having to rely on someone else to provide paperwork or information adds an additional layer of difficulty.  Since the person you are speaking to at this HR company probably has a whole catalogue of customers that they have to service, your request may not be as high on their priority list as it is on yours.  I also agree that employees may not feel as comfortable speaking with someone who they have absolutely no rapport with and this could cause a lot of anxiety.

    • #7894

      Miko Nourieli
      Participant

      What are some of the reasons organizations outsource HR? What benefits and potential risks do these companies acknowledge by doing so? What does outsourcing mean for the HR industry, and future job prospects for HR professionals?

      With the high cost of hiring multiple full time professionals to handle HR at an organization, smaller companies who may not have the funds to afford full-time experts, but still want to provide their employees with good HR support and benefits, may look to outsource their HR to other professionals or even software to assist with their HR needs, whatever they may be. There are plenty of different software out there that can be found and used to take the stress off of small business owners when it comes to handling payroll and benefits, and they usually take care of upgrades themselves. However they wouldn’t be able to tell you whether or not your company has a competitive benefit package, or if you are complying with law. That’s where human experts would be able to help a company because they can actually analyze your company thoroughly and be able to tell you where you can make changes or improvements, and would be able to help you with designing those plans, however would most likely cost more than just a software program. Outsourcing HR will likely become more and more common since almost all employees want good benefits and stable payroll and every company big or small would hopefully want to provide those benefits to stay competitive and make people want to work for them, so that would mean for small businesses, most likely they would want to outsource their HR to a professional to help make sure their employees are happy and stay happy. This would greatly increase the available jobs for HR professionals because as the need for them grows, more opportunities will be available. Furthermore, not only big companies will be looking for HR professionals, if small businesses start outsourcing their HR more, then HR companies that solely focus on outsourced HR, will be a great place for HR professionals to find work. Now that I think about it, HR professionals are probably going to be more and more sought after as the workforce and companies try to provide more and better benefits.

      • #7904

        Sonia Gonzalez
        Participant

        Hi Miko, I agree. Nowadays, outsourcing is a well-grown and booming business trend. So now a day companies are outsourcing their various activities and functions to other entities.

        Thank for sharing.

      • #7908

        Richard Ledesma
        Participant

        Hey Miko, I also agree with your take, outsourcing is a big business trend and maybe the way to go. Like Sonia said companies are now outsourcing their activities and that is very true but it is the way to go for a business.

      • #7913

        Jean Muy
        Participant

        I agree with your statement towards outsourcing. Most employees should see how it can be good for them by bringing the best possible benefits, catching attention to other people to work for the company.

    • #7897

      amadou bah
      Participant

      some of the reasons companies outsource HR allow companies to cut costs while focusing on their core business and customer responsibilities. in addition, outsource HR, you can put your trust in HR knowing that even some rules change. And you can be ensured that your company minimizing exposure to legal risk. Again, access to technology and the latest in the best practices is a huge reason to outsource HR. By outsourcing HR you can take advantage of these benefits of having advanced technology. As well, payroll service it involved paying proper wages to all the employee correctly calculating hours worked, withdraw the proper tax from the wage and all the payroll are the responsibility of HR. Finally, to make sure that the workplace is a safe and comfortable environment for every signal employee. And they must take the sexual harassment training.

      • #7901

        Shane russell
        Participant

        I agree with your statement that outsourcing HR will let companies focus more on the core of their company instead of other things that will cost the company but, I don’t agree with the costumer responsibilities. When a company outsource HR, their basically letting them deal with things that they can’t do because  of, people in the field, money and other things that they can’t provide that will cost them.

      • #7927

        Justin Campos
        Participant

        Hi amadou, I agree with you that outsourcing will help the companies save money because using and getting your thing from foreign locations is cheaper, so that a good thing for small businesses since saving money is a must. Good Work.

    • #7899

      Shane russell
      Participant

      <p class=”p1″><span class=”s1″>The main reason for outsourcing to encourage other companies to use their service is the expertise they have on the work for which they are asking the company to outsource to them. Whether it is technical knowledge or experience on the field, the HR outsourcing solutions companies have an edge over other companies in terms of knowledge,skills and abilities, resources which help them in performing the given task better than the given which are outsourcing.<span class=”Apple-converted-space”>  </span>Also, sometimes, the company needs to perform some tasks for a limited period. For this purpose, it would be a waste of resources to hire and train someone new for the job. They can give the same tasks to an outsourcing solutions company which would help the business organization to concentrate on more important matters while saving time time and energy which would have been spent on hiring and training someone. I think it saves time, precious resources and manpower to outsource task which any business organization feels they cannot perform. Giving to the professionals and experienced people from the outsourcing solutions companies, not only helps in increasing the efficiency and productivity of the whole business operations but it ensures the work is done perfectly and without any errors. Five benefits or potential risk that this companies receive by outsourcing HR are, cost- effective services, easy risk management, increases efficiency, management of employee performance and organizational development and flexibility. </span></p>

      • #7916

        Rayon Lambert
        Participant

        Hello Shane,

        You gave a good argument regarding the benefits of outsourcing HR. One thing I will say is that nothing is without errors. Though I understand the benefits of outsourcing, I think that the disadvantages are just as strong. Having that person who can resolve HR-related issues right away is very important. But every company needs to priorities what is important to them and structure their employee as such.

    • #7907

      Richard Ledesma
      Participant

      What are some of the reasons organizations outsource HR? What benefits and potential risks do these companies acknowledge by doing so? What does outsourcing mean for the HR industry, and future job prospects for HR professionals?

      There are many reasons why companies outsource HR. Although HR is a key and very essential, it can be complicated for any company. This is a big reason why most companies outsource HR like I mentioned previously. Outsourcing HR isn’t the proper way to do things in all businesses when it comes to saving money and time. There are also advantages of outsourcing HR like for example it can save your company money even when running a small company, easy risk management, it can increase efficiency, as well as organizational development and flexibility. Another big advantage would be the potential savings for the company, this helps the other areas of the organization free up a bunch of HR staff to work on big projects that will benefit the company or business. Outsourcing HR will somehow become more common every year little by little. This is because of employees would want good benefits and most importantly a more stable or even bigger payroll, with that being known every company or business would want to provide that whether it is a small or big company just because they would want to stay competitive and make people want to work for them and not for another company, as well as keeping their employees satisfied which is more important. This sounds good and all but this also means that not only big companies will be looking for HR professionals, both small and big businesses have potential at HR professionals knowing small business might start outsourcing the HR more. This gives a reason why HR professionals are going to be more persuaded after this goes down because it will benefit both of them. I honestly believe that this saves businesses time, and resources to outsource any tasks or duties the organization can’t carry out or do. Some businesses will always choose to not outsource or source the HR department but that is up to you and the direction you want your company to go on. Personally, I believe that outsourcing can lead to companies doing better in the future and will help them out a lot but who knows what may happen in the future.

      • #7915

        Rayon Lambert
        Participant

        Hello Richard,

        You made some excellent points regarding the benefits of outsourcing and also the disadvantages as well. Though it may be beneficial for a small company to outsource, I think it is much harder for a large corporation to do the same. Small businesses have to find effective ways to allocate money to make and maintain their profit margin. If outsourcing the HR team is helping them in gaining hirer profit, I think that they should do what is best for the company.

    • #7912

      Jean Muy
      Participant

      The many reasons that organizations outsource HR is because it can lead them to not be so dependent on them which doesn’t bring focus to that respective department and brings less money to pay for especially if you are running a smaller company compared to any big companies who would prefer having HR in their company. With hiring a team for the HR department, costs come within organizing a proper team that can handle a lot that deal with efficiency and making sure that everything around the company is stable. The main concern that comes with HR is being able to bring any productive things for the employees that would want to gain good benefits. It eliminates bringing attention to other parts of the company so that it can run at a proper rate for the company to keep on growing at the way that it should be. With outsourcing HR, it can bring other goods and bring services that can be changing the aspect of the company massively since it can come for other parts of the world that can bring a different image. From what I see, the functionality of HR can possibly bring big changes to a company, having it’s pros and cons, can set proper sides for people to see how it can be flexible towards them as well.

      • #7926

        Justin Campos
        Participant

        Hi Jean, I agree with your first point on how it doesn’t helps because it would take the focus away like you stated not depending on them, therefore the company will slow down. Good Work.

    • #7920

      Justin Campos
      Participant

      According to the article “Benefits of HR Outsourcing: How Even Small Businesses Can Provide Great HR” some of the reason’s organizations outsource HR are the general cost of goods because since production out of the United State is cheaper. Another benefit from HR outsourcing is that expertise effective HR weakness can be solved and worked on by outsourcing. Based on the article payroll, employee training and applicant tracking are some of the other benefits that outsourcing can provide. Depending on the markets demands outsourcing can help come up with new services for that specific market. The bigger the SaaS packages the better and the more benefits it comes with. The highest tier of SaaS Package comes with phone apps for the users of the company. The System has its flaws because the employees have issues that can’t be solve that easy and need to be taken to union to be handle. The future of the HR is going in a okay path and things are becoming easier from them but that doesn’t mean that they will not run into some issues when it comes to Outsourcing and providing great HR.

    • #7921

      Zoila Cedeno
      Participant

      What are some of the reasons organizations outsource HR?
      Smaller companies can sometimes lack the resources to support an in-house human resource department. In addition, even if you have an HR manager, in a small firm their exposure to complicated HR issues may be limited and lead to flawed decisions that can result in fines, damage the employer’s credibility, and hurt employee loyalty. By outsourcing HR, these complicated issues will be handled by a someone who is specialized and has proficiency in the area of HR. In addition, outsourcing helps small businesses stay competitive providing sophisticated HR services at a reduced cost, leaving additional funds available for investment or other activities to improve customer value and increase profits.

      What benefits and potential risks do these companies acknowledge by doing so?
      Benefits:
      – HR outsourcing reduces the fixed cost of managing employees.
      – HR firms can be more efficient because the talent and infrastructure are already in place.
      – They are responsible for staying on top of changes in laws and regulations and developing or offering new services to keep you in compliance.
      – They can help you design benefit packages to attract the best qualified candidates
      – They can help you design a work culture that helps keep your employees engaged and reduce turnover.
      – More growth for the company
      – More savings for the company

      Risks:
      – Since the HR company is not on-site, it can lead to poor internal communication because they are unable to get an accurate vision of the company’s culture.
      – Employees can’t just drop into the HR office to discuss concerns because it’s off-site.
      – Can hinder organizational learning. Offsite they are unable to adequately facilitate organizational learning by providing a continuing thread that supports corporate identity.
      – Can lead to mistrust of management, employees can wonder if their jobs will be outsourced too.
      – Could result in leaking of sensitive information and loss of confidentiality.
      – Company could go bankrupt and leave you without HR services.

      What does outsourcing mean for the HR industry, and future job prospects for HR professionals?
      There is no way to know exactly how much the HR industry will be affected by outsourcing. However, outsourcing is not the only threat. Like many other positions which have become defunct because of the advancement of technology, some experts believe that future HR managers will need to embrace AI and become data-savvy. They predict that AI-powered tools will be doing most of the HR analytics which means that in-house HR departments will be reducing in size not just because of outsourcing but because of automation of processes. Other experts predict that since HR outsourcing is done to reduce expenses, some HR functions may end up being sent offshore to countries where labor is cheaper leading to a decrease of HR jobs in the U.S. Still others feel that HR positions may change and become short-term or freelance contracts as opposed to long term jobs or develop into consultant positions with greater HR specialization.
      Sources:
      https://www.thebalance.com/human-resources-outsourcing-effect-on-economy-3306256
      https://www.shrm.org/hr-today/news/hr-magazine/pages/0704schramm.aspx

      • #7925

        Sonia Gonzalez
        Participant

        Hi, Zoila, I enjoyed reading your post. I agree when a company outsources, it implies that the company is experiencing a system failure in its organizational structure. While businesses can affect decisions or activities, they can also affect other parties’ behavioral changes within the industry.

        Thank for Sharing.

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