Outsourcing vs insourcing in the human resource supply chain: a comparison of five generic models

Abstract

PurposeThe purpose of this paper is to develop a typology of human resource supply chain (HRSC) models that enable comparison of different models for making more informed strategic HR outsourcing decisions.Design/methodology/approachIn the paper interviews and company documents were used to construct multiple comparative case studies.FindingsThe paper finds that five generic HRSC models were identified in two broad categories – two in‐sourcing models (local contracting and HR centralizing) and three outsourcing models (purchasing HR, non‐staffing HR, and staffing HR). Additional findings relate to the redistribution of power and competencies for managing HR within and between organizations.Research limitations/implicationsThe paper shows that future research should account for different HRSC models to address various dependent variables, especially distribution of power and HR competencies in managing HR supply chains and contribution to firm performance. Future studies on strategic alliances can benefit from building on the HRSC models in building different types of partnerships.Practical implicationsIn this paper it is found that managers have a means for comparison of different HRSC models to make more fully informed strategic outsourcing decisions and to develop related HR competencies related to each one of the generic models.Originality/valueThis paper clarifies critical differences in five different generic HRSC models that must be accounted for in research on strategic HR and outsourcing. Without understanding the differences in HRSCs, managers often unwittingly relinquish power and control over critical HR functions to other organizational units or vendor organizations.