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What Are the Different Methods of Outsourcing Human Resources Functions?

By Jan Fletcher
Updated Feb 08, 2024
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One method of outsourcing human resources functions is to bundle various aspects of outsourced tasks to an off-site provider. Instituting a complete hand-off of human resource functions is another strategy some companies pursue. Still other firms may elect to outsource by instituting a partial hand-off of human resource responsibilities. Companies with global outsourcing initiatives that span multiple locations often require an outsourcing solution that can be tailored to managing a company's globally distributed workforce. High-touch engagement is yet another strategy that may be used in outsourcing human resources functions.

Bundling human resources management tasks into various configurations is a relatively common strategy pursued by outsourcing firms. A company's directors may make a decision to outsource some managerial and housekeeping tasks, while retaining others. Sometimes a company employing this strategy will outsource tasks that are time-consuming, require less training and certifications, or are tasks that can be done remotely. The other end of the spectrum, in terms of partially outsourcing human resources functions, is to outsource various managerial tasks to consulting firms, in order to tap outside expertise and talent. A company may decide corporate goals are better served by retaining performance evaluations in house, for example.

In choosing among the various options for outsourcing human resources functions, a company may choose to pursue a course of either a partial or total hand-off. A partial hand-off may range from an outsourcing strategy that maintains limited control over one or two human resources functions, to a near complete hand-off of human resource management tasks. Often, a variety of factors are considered by companies that look at these outsourcing options. These factors may include how much sophistication the outsourced task requires, the opportunities and challenges of doing the work remotely, and how much control the firm's management decides is appropriate. For example, work that requires a national security clearance may not be suitable for outsourcing to overseas workers.

High-touch management is another strategy that may be undertaken when outsourcing human resources functions. This is when the outsourcing firm continues to engage in a significant level of involvement in managing human resource responsibilities. Such a strategic solution often involves the firm's managerial staff touching base with the outsourced firm's managers on a frequent basis. This may involve regularly conversing with the outsourcing firm's managerial staff, or advising the outsourcing manager when particular situations arise, such as in handling the claim of a worker alleging abuse.

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