Human Resource Outsourcing: Is The HR Function Losing Its Relevance in Organizations?

Abstract

Human resource outsourcing (HRO) is one of the emerging practices in the Business Process Outsourcing market. Available research shows that most organisations are increasingly outsourcing most of their human resource functions. Given these developments, a pertinent question arises whether the continued retention of the human resource function in organisations is justifiable. Why should organizations continue to have the human resource function if that function can be outsourced? In this paper, we examine the nature of human resource outsourcing and argue that that HR functions are even more important than ever but with HR outsourcing, there is need to shift focus from traditional human resource activities such as recruiting, payroll, and pension’s administration to outcome-oriented activities that enrich the organisation’s value to customers, investors, and employees.

Key words: Outsourcing, HR outsourcing, HR function, Organisations.