Outsouring of HR Functions coursework

The following is part of the coursework I did for my diploma course in human resource management. This particular coursework is on outsourcing of HR functions. It is basically supporting outsourcing, with time and cost savings cited as reasons for outsourcing.

Proposal for outsourcing of HR functions

What is Outsourcing?

Outsourcing means to pay others to do the work that we used to do.

Why Outsource?

Human Resource professionals are involved in the long term business planning, and can be a major factor in the company’s success (or failure). Especially so when the GuangDong manufacturing plant in China will be fully operational in 3 years time. As a result of this demand, there may not always be time to implement every project internally.

What to Outsource?

The 3 HR functions that identified to be outsourced are:
1. Training (Development & Implementation of Training Programme)
2. Recruitment (includes all temporary staff affairs)
3. HRIS

Training (Development & Implementation of Training Programme)

Feedback from the following groups of people has revealed the disadvantages of developing and conducting internal training:
1. Developers - As the developers are managers, engineers etc already burdened with their current workload. They treated development of training materials as extra burden to be offload as soon as possible. Thus the quality of the training programme suffers.
2. Trainers – As the trainers are in fact our employees, such as managers and supervisors, they are not professional-trained to be trainers. They feel that conducting training takes up a lot of their precious time, and they need to work overtime to clear their current workload.
3. Participants – They feel that the quality of internal training programme is inferior to external programme. And the fact that all the participants are in fact their colleagues, increase the risk of inbreeding. They want to network with other professionals in the same industry and to learn the latest technology adopted by other companies.

Due to the above reasons, I recommend to outsource training:
- quality of training programme is better
- reduce the workload of our managers, engineers, supervisors, let them concentrate on their current workload
- enable networking, when our employees train with others- our employees can learn from professional trainers
- variety of training methods
- Trainers with experience in doing business in China can share valuable experiences.

Training Needs Analysis and Evaluation of training programme will remain the duties of HR department.

Recruitment (includes all temporary staff affairs)

Recommend that recruitment (including hiring of temporary staff) of all levels to be outsourced to an employment agency.
The advantages include:
1. Reduced administration work. A lot of time saved if the recruitment is taken over by an employment agency.
2. Free replacement service. When the employee resigns or found not suitable during the first month of employment, the agency will offer a free replacement.
3. When temporary employees are under the agency’s payroll, the agency is responsible for payroll, benefits administration and insurance (if for example, the temporary employee damages company equipment or property).
4. Employment agency with an international network is able to help us tremendously when our China (GuangDong) plant opens.

On the surface, it may seem that outsourcing of recruitment function is more costly, but the savings in time and effort (which translate to cost savings) outweigh the actual monetary costs.

HRIS

The current Human Resource Information System is designed for handling a maximum of 500 employees. The company currently has a workforce of 1100. In 3 years time, when the GuangDong branch is fully operated, the workforce strength will increase to 3500.

In view of this, a new web-based HRIS is critically in need. I recommend to outsource the design and maintenance of HRIS for the following reasons:
1. Our IT department will be outsourced next year.
2. The designer of the system is the best person to maintain it.
3. When the GuangDong branch opens in 5 years’ time, we need the expertise of the software company to implement the system and train the staff to use it.
4. The software company offers a backup system.
5. Higher quality when system is designed by HRIS specialists rather than our IT personnel.

Conclusion

Outsourcing of the 3 functions will enable our HR personnel to concentrate on long term business planning, especially so with the expansion of business to China.