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What does the outsourcing of the HR function involve? What are pros and cons of HR Outsourcing Answer

What does the outsourcing of the HR function involve? What are pros and cons of HR Outsourcing? What do you think are three critical considerations that you must include in the implementation plan for this outsourcing transition?




Maintaining an efficient and productive workplace is critical. Outsourcing HR functions create greater efficiency within human resources systems. Advanced human resources technology utilized by outsourcing providers help streamline important HR functions, such as payroll, benefit administration and compliance management. Outsourcing helps employers and managers spend less time doing paperwork and more time dedicated to improving the efficiency and effectiveness of the workforce. There are many benefits to outsourcing HR functions. For one thing, not every business has dedicated human resources professionals. Outsourcing gives them the ability to take on this responsibility by outsourcing them to outside human resources outsourcers. We minimize risk by outsourcing HR to outside human resources outsourcers. outsourcing HR is a good idea and can save them money by not having to staff this department. Some key benefits are:


  1. Saves time


  1.    Don’t have to hassle with government forms


  1. Access to skilled personal


  1. Employees don’t have to worry about company backlash if they have any complaints


  1. Save money on training and maintain skill sets


For management the outsourcing of HR can be a cost savings and it can have the added benefit of adding a truly objective eye toward the process. By being an outside source HR can be more free from the internal office political environment. On the other hand this can be a minus in the same way. Since you are dealing with people, treating them as nothing more than units to be managed can be bad for morale. People are Relational beings and developing relationships with the people in the company can be beneficial and allow for the “human” element to be represented.

Another plus is that HR can be more free to hold management accountable. When HR is in-house the HR person has to worry that they could step on the wrong toes and find themselves in trouble with senior management. While it is poossible for an outsourced HR to make a major blunder and thus lose the account, there is still that degree of insulation by being an outside source.


Here are three things that a manager would need to consider in the implementation plan for this outsourcing transition:

  1. determining who stays and goes. This was outlined in the text under a detailed list making process. Pretty much a pro and con scenario.
  2. legal considerations in separating the employees from the company. Union/state laws/ERISA/WARN and federal laws. Not to mention public opinion from the announcements and when to mention them.
  3. compensation or severance packages. Truly here is where the difficulty must be from an employer. They are trying to save and limit costs but also are trying to maintain fairness and good public opinion. What can they afford to do? Here I would be dealing with the CFO and accountants and lawyers to determine what we can offer.