Human Resource Outsourcing Research Articles

Why HR outsourcing continues to expand

PurposeTo highlight that human‐resource outsourcing (HRO) arrangements have proved to be strategic partnerships that help to put people matters at the top of corporate strategic decision‐making.Design/methodology/approachOn the basis of a survey by The Conference Board, produced in partnership with Accenture HR Services, the article demonstrates the key motivating factors in the decision to outsource. The article presents a case study of a mid‐size American chemical producer that, because of human resource outsourcing (HRO), can now more effectively perform financial analyses because of better HR reporting. Additionally, the company now pays 99 percent of employee claims within two weeks and manages every service request within 48 hours.FindingsThe article demonstrates that HRO is about the best use of company resources, not a means for cost savings or job cutting. By fully understanding the economics and opportunities of HRO, executives can help their companies to achieve new heights of performance.Practical implicationsThe article demonstrates that the key advantages of HRO include lower costs, better insights, greater control over the HR function and improved customer services.Originality/valueThe article contains plenty to interest top managers who are considering outsourcing their HR functions.

Professional Employer Organizations and Their Impact on Client Satisfaction With Human Resource Outcomes: A Field Study of Human Resource Outsourcing in Small and Medium Enterprises

Increasingly, small and medium enterprises are outsourcing human resource (HR) activities to professional employer organizations (PEOs). The authors draw on social network theory, transaction cost economics, and social exchange theory to examine how PEO and client characteristics moderate the impact associated with outsourcing human capital-enhancing HR services. Results from a study suggest that using a PEO for human capital-enhancing services was positively related to HR outcomes and that this relationship was stronger when a weak-ties service delivery model was used, client receptivity was high, and the PEO contract was more detailed.

Firm Size and Internet Recruiting in Canada: A Preliminary Investigation

Introduction Firm size is an important variable in organizational research. There is support for the impact of firm size on human resource (HR) activities such as executive compensation (Kostiuk 1989), employee absenteeism (Barmby and Gesine 2000), training (Black, Noel, and Wang 1999; Snell 1992), staffing (Snell 1992), working conditions (Belfield 1999), and HR outsourcing (Marquis and Long 2000; Occhiogrosso 1998). In addition to the research just cited, firm size has been shown to impact on recruitment practices (Barber et al. 1999). Research has found that recruitment among large firms tends to be more formal, bureaucratic, and resource intensive than for small ones. In contrast, small firms are more likely to use internal recruitment sources, such as employee referrals and networking (Barber et al. 1999; Bartram et al. 1995; Marsden 1994). Three important differences between small and large firms provide a partial explanation as to why their recruitment practices differ. First of all, large firms typically have more job openings then small firms and therefore hire larger numbers of candidates. Second, large firms have to contend with a greater number of candidates because of their brand recognition in the marketplace. Third, large firms have more money for recruitment. Despite the different recruitment practices between small and large organizations, both types of firms have started to utilize the Internet as a recruitment source. Internet recruitment involves the use of the Internet as a channel through which jobs are posted and information is provided with respect to the application process. Internet recruitment can be implemented from a company website, through the use of an Internet recruiter (for example, Monster), or through some combination of the two. Therefore, this study focuses on both channels (company website and use of Internet recruiters) as both are important in the assessment of recruitment differences across firm size. Although there is a dearth of research on Internet recruiting, this recent technology quickly has become a growing practice for many businesses and has become a popular tool for job seekers to search and to apply for jobs (iLogos Research 2000, 1998; Nesbeitt 1999). A survey by Statistics Canada (2001) found that approximately 30 percent of Internet users used the Internet (within the month prior to the survey) to search for information on work and employment. Useem (1999) reported that positions advertised on the Internet represent a wide range of occupations from senior executives to religious ministers. Relative to the newspaper, Internet recruiting has three major benefits, namely lower costs, faster posting and candidate response times, and the potential to reach a broader audience of active and passive job seekers (iLogos Research 1998; Nesbeitt 1999). For example, a 30-day job posting on an Internet based job board can be as little as 10 percent of the cost of a three-day advertisement in a national newspaper. This study will address the extent to which small and large firms differ on several key aspects of Internet recruiting, namely the existence of company website, use of the website in recruitment, awareness of Internet recruiters, usage of Internet recruiters, and differences across functions and management levels. Hypotheses Large and small firms differ in many ways that relate to Internet recruiting. In addition to greater technical resources, large organizations are more likely to have greater financial resources to support a website (Kowtha and Choon 2001). Moreover, since large firms tend to have multinational or multidivisional organizational structures compared to small companies (which tend to have more basic organizational structures), their websites are more likely to be operated from another division or country. Therefore, the following hypotheses are proposed: H1: A greater percentage of large organizations will have their own website versus small organizations. …

People processing systems and human resource strategy

This paper analyses, through a detailed case study, how the development of human resource (HR) systems and outsourcing decisions influence the strategic choices about the kind of HR function available. The paper describes the various interactions through which an HR system moves to become e-HRM. In doing so, the interdependent relationship between HR processes, HR systems and the outsourcing options are explored to show how the transactional elements of HRM underpin the strategic elements, adding flexibility and value.

Human resource outsourcing and organizational performance in manufacturing firms

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.

Human resource outsourcing in high technology companies in Taiwan

This paper discusses the developments and practices of human resource outsourcing in high technology companies in Taiwan. It is found that human resource outsourcing will be a clear trend when the high technology industries are well developed in Taiwan. There are several different kinds of outsourcing strategy and patterns for different types of work in the companies. Some challenges for future developments of human resource outsourcing are discussed.

Human resource management outsourcing: The make or buy decision

Executive Overview Just-in-time human resource (HR) management, sell and lease-back human resource programs, and do-it-yourself HR—all of these phrases characterize how companies manage outsourced HR functions. This article reports results of interviews conducted with senior HR executives and professionals in 25 organizations to identify outsourcing rationales and consequences. Companies were found to use HR outsourcing for both operational and strategic reasons. Based on these findings, we present guidelines for selecting vendors, managing the outsourcing transition, managing vendor relations, and monitoring vendor performance. HR outsourcing is not a fad, and it can enhance the HR value chain as well as support the development of HR as a business partner and strategic contributor to the organization's goals.

Outsourcing The Human Resource Function: Environmental and Organizational Characteristics That Affect HR Performance

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, March, 2003,and received the 2003 Irwin/McGraw-Hill Distinguished Paper Award.