Review of literature on payroll outsourcing

These risks principally arise from information deficiency; if information was freely available and all transactions were enforceable at no cost, then the network form would be very attractive. The author cautions companies not to jump into the outsourcing bandwagon without first study the HR processes already in place and the potential benefits and costs from the outsourcing arrangement.

Also, the organizational structure was the major challenge in adopting these practices along with monitoring the outsourcing activities, lack of communication and inefficient HR practices notes that clients are concerned about losing skills, becoming overly dependent on the supplier, loss of responsiveness possible with internal units, leaking of sensitive information, and the backlash from retained staff who fear further outsourcing.

For some companies, outsourcing the bulk of their transactional human resource functions like recruiting, hiring, benefits administration, and labor relations to a single provider may be the best solution. Managing networks—scarce management skills are needed to foster the collaborative relationships, sharing responsibilities and developing trust.

outsourcing literature review

Along with the success factors of the organization such as the strategic planning, the core competitors, the decision making process as well as the customer satisfaction the organization are even considering the HR outsourcing as the important and major aspect to their organization.

Nevertheless, determining which human resource functions should be outsourced can be challenging to most, if not all, companies. Unifying these themes, the review covers extant research on human resource outsourcing, noting that much of the work to-date has been on outsourcing the information technology function rather than the full range of processes that fall within the scope of human resource management.

Literature review of payroll system

He also highlights that it is difficult for domestic practitioners to exercise due process in performing their services because such services are subcontracted overseas. Display both vertical and horizontal relationships between network members, various types of strategic alliances and other inter-organizational collaboration are put into effect — with an associated integration of functions within the firms. From a nationwide survey, they identified that recruitment and selection; training, occupational health and safety, payroll and employee benefits are the top five outsourced HR functions. To understand this, one should briefly outline the fundamental differences between outsourcing and conventional HR. Employee satisfaction level must also be monitored so as to gauge the effectiveness of the outsourcing arrangement. The problem is compounded when clients insist in specified practices and try to manage the know-how of the service delivery. The findings indicate that HR outsourcing stymies HR role transformation.

From the pertinent literatures that have been reviewed, the three major outsourcing problems are identified as follows: No specific guidelines are available on how to select which human resource functions to be outsourced; There is lack of literature on how performance management are carried under business process outsourcing environment; and There are no readymade course of action on how to negotiate HR outsourcing contract and maintain sound relationship with service vendors.

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HR Outsourcing Literature Review