Outsourcing in general is deemed to considerably impact a firm’s performance. It is often regarded as a potential source of gaining competitive advantage and a possible strategic opportunity to increase an organisation’s competitiveness. In today’s dynamic and globalised business environment, HR offers several options to enhance gains and opportunities to positively contribute to the overall business performance. Therefore, it seems rational to contend that outsourcing HR- related tasks plays a significant role within organisations and represents an important aspect of companies’ operations.

Source: Patel, C., Budhwar, P., Witzemann, A., & Katou, A. (2019). HR outsourcing: The impact on HR’s strategic role and remaining in-house HR function. Journal of Business Research, 103, 397-406.

You are a Human Resources consultant recently employed by Chermol Private Company to help organise its HR function. The organisation is considering whether to outsource or retain an in-house function and has called on your expertise to assist senior management with insights into the issue.

In essay format:

• Based on relevant consideration in the business, argue to / advise senior management on whether the company should outsource or use an in-house HR function.
• Provide examples to illustrate situations when outsourcing is desirable and when not.

Answers to Above Question on Outsourcing

Answer 1: Human resource is an important function in an organisation but it is evident that many organisations are using the strategy of outsourcing its HR function in order to concentrate on other important areas. In the given case scenario of Chermol private company, the decision to retain its in-house HR function or outsource it needs to be based on various factors after assessing their advantages and disadvantages.

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