Master Thesis On Outsourcing

Master Thesis On Outsourcing-67
However, Huselid (1995) argues that outsourcing some HR functions may reduce competitive advantage.

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In today global business environment, firms are facing the increasing of the competitiveness, new technology and corporate restructuring, such factors force firms to seek and sustain competitive advantages by emphasizing on profitability and productivity of each department.

For this reason, today some firms embrace outsourcing concept through outsourcing all or part of HR functions could reduce cost and increase the effectiveness of HR department.

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As the authors state, firms can gain competitive advantage through outsourcing which could provide better, faster and cheaper the best-in-world HR services (Jeffay, Bohannon and Laspisa 1997, p.42).

Switser (1997) also has similar point of view, he pointed out that outsourcing the transaction-based HR activates can free HR managers and other managers to struggle with strategic business issues (Switser 1997).From a strategic perspective, recruiting and selection are important activities in the firms in order to select talents.If outsourcing these firm-specific skills may hinder the ability of the firms to develop unique competencies within their workforce.Therefore, it was found that arguments are raised in many strategic HR literatures.In this paper, we will examine a prescriptive article “Beyond Benefits: The Changing Face of HR Outsourcing” and discuss different perspectives on the related issues which are provided by other authors in other SHRM literatures.For example, agencies may increase price at contract renewal, charging more for adjustments or add-on during the contract period.(Klass, Clendon and Gainey 1999) On the other hand, extra costs may be added to the firms such as managing the relationship between HR department and the agencies (Teems 2003).Besides, if the firms use sole supplier, monitoring costs are added to retain sufficient expertise to supervise and monitor the performance of the supplier in order to avoid the supplier perform inadequately (Siegel 2000).As a result, costs for outsourcing may be greater than the costs if the firm handles HR functions internally.Indeed, these are not only the benefits to the firms.Another benefit does not mention in the article including free sources for other purpose.

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