HRO

B.Rajkiran
PGP/09-11/SS/HR/05
Evolving Role of HR
 Strategic management decisions
 Value-added services
 Achieve a competitive edge
 Primary functions are based on frameworks:
competency-based
structural
process-oriented
profit centers
HRO?
 Any activity in which a company lacks
internal expertise and confidentiality and
requires an unbiased opinion on human
resources, can be outsourced.
 HR outsourcing services:
PEOs(professional employment
organization), BPOs, ASPs, or e-services.
Professional employer
organization (PEO)
 Assumes full responsibility of company's
HR administration
 Takes full legal responsibility of your
employees
Business process outsourcing
(BPO)
 Referring to outsourcing in all fields, not
just HR
 Putting in new technology or applying
existing technology in a new way to
improve a process
 Self-access and HR data warehousing
Application service providers
(ASPs)
 host software on the Web and rent it to
users
 packaged applications (People Soft) or
customized HR software
E-services
 HR services that are Web-based
 Includes BPOs & ASPs

HR outsouring categories:
Transaction & Administration outsourcing
and HR consultancy
Why are organizations
outsourcing?
Preference for HRO
 Outsourcing of BOP instead of BPO
 Saves key people’s time
 Concentration on core competency
 Enhancing profitability
 Mid-sized cos - >87% of funds towards
routine processing transactions
 Best systems, most experienced minds
 Some Statistics
 U.S. - >2/3rds of the corporations have
outsourced 5 or more HR functions
 98% are ready to further outsource
 HR personnel shrunk by 16%
 Survey on “Outsourcing in the Asia-Pacific”
confirms lack of momentum(5%)
 Outsourcing market in APAC region - $1.14
billion in 1999 to $2.56 billion in 2004
 Advantages of HRO
 Reducing or eliminating fines and penalties by keeping pace
with changing government regulations.
 Achieving measurable, bottom-line results by increasing
efficiency and leveraging outsourcee’s economies of scale.
 Lowering infrastructure and facility costs by having the HR
function administered off-site.
 Sharpening your business focus by eliminating interruptions
caused by employer obligations, risks and liability.
 Improving employee retention and morale by providing
timely answers to payroll and benefits questions.
 Advantages (contd..)
 Expanding scope and level of service. Your HR
department can’t be subject experts in all areas – our staff
of more than 65 HR professionals can.
 Implementing organizational initiatives that link to your
overall business plan: HR becomes strategic, not tactical.
 Overall, companies tend to outsource to alleviate
administrative burdens and focus on strategic areas
Factors hampering HRO
 Cost factor & Confidentiality
 The fear of losing jobs
 Loss of sensitive information to
public/competition
 Ethics and quality of outsourcing vendors
 Possibility of security breaches
 Cost-benefit equation not clear
 Lack of psychological acceptance
 Outsource
activities that
 Have high volumes
 Are repetitive and routine
 Reflect consistent customer needs
 Have opportunities to leverage
 Are service and efficiency driven
 Are easily measurable in terms of
performance
Retain activities
that
 Support key business processes
 Get influenced by external forces
 Require high content expertise
 Are ad-hoc, periodic future
oriented projects
 Are difficult to measure
 Have high impact on
organization as a result of non
performance, failure or mistake
Areas where HRO will work
 Relocation  HR Information
 Recruiting/Staffing Systems
 Competence  Disciplinary Issues
Development  HR Surveys
 Salary Administration  HR Research
 Consulting and  Staff Loans and Perks
Training  Manpower and
Career Planning
THANK YOU FOR LISTENING 