Impact Of Outsourcing Staffing Function On Organizations In Australia

Project Aims and Objectives

Discuss about the Human Resource Management for Institutions and Technologies.
 

This paper is a project proposal on the impact of outsourcing the staffing function has on business organizations. Outsourcing is a practice in the corporate world where a business organization delegates non core functions of the organization to another company under an agreed criteria and terms. Business organizations are made up of many functions which are coordinated together to help the organization become successful (Australia, 2015). In the recent past, however, business organization have seen it more beneficial and efficient to delegate functions such as staffing, cleaning services and transport and logistics to companies that specialize in this functions for various reasons. This research project proposal aims at identifying the reasons why organizations outsource the staffing function and the impact that outsourcing has on organizations in Australia. The research proposal begins with the identification of the aims and objectives of the project and identification of the scope of the project. Literature is reviewed to help identify gaps that exist in the research and to compare the findings of different researchers to give a deeper understanding of the subject being researched. This will also help in deciding on the research questions to be asked during the study. This study will be carried out using both qualitative and quantitative research design.

This project aims at investigating the impact that outsourcing has had on organizations across Australia.

The research project seeks to identify if outsourcing is beneficial to the organizations and what are the specific benefits of outsourcing.

Establish the shortcomings of outsourcing to organizations in Australia.

The scope of this project is very wide. The project seeks to examine the impact of outsourcing the staffing function. The project is wide in scope because the project seeks to investigate both positive and negative effects that outsourcing staffing function may have on an organization. This, therefore, means that a lot of data from various organizations in different industries needs to be collected to help meet the research objectives. The project does not discuss the outsourcing of other functions such as security and its scope is limited to staffing function of an organization(Caruth, Caruth &Pane, 2009).

Outsourcing of human resource functions is becoming popular for many organizations in Australia and globally. The outsourcing of the HR function which includes recruitment and managing the workforce is being outsourced by many organizations. Due to this reason, the researcher finds the need to identify the impact that outsourcing of staffing function has had on organizations. This study is justified further by the fact that most researchers have studied outsourcing as a whole and therefore very little information is available on the effects of outsourcing the HR function (Sople, 2011).

Scope of the Project

Most organizations in the 21st century are so focused on minimizing cost and will take whatever actions to cut on their costs. Organizations are also focused on achieving high levels of work flow and efficiency at the workplace and for all employees (Leimeister, 2010). Outsourcing is the only way that all these can be achieved since it assists in delegating work and functions to people or organizations outside the company. Bucki (2017) defines outsourcing as the process of delegating work to other people who are not related to the firm to carry out agreed tasks under the agreed terms of a contract.

Normally, companies outsource tasks or functions that are not core functions of the organization and therefore can be undertaken by another party more effectively and efficiently. Some of the common tasks that organizations outsource include IT services, security services, manufacturing of some units as well as other services such as transportation and law (Kirk, 2010). The delegation of staffing function which involves hiring and recruiting employees is also common.

This literature review helps to identify the findings of other researchers concerning reasons for outsourcing staffing function. The review also helps to establish the negative and positive impact that outsourcing of HR function has on organizations.

Organizations outsource the HR function for various reasons. One of the reasons why organizations outsource is to save on cost. Most organizations find that they incur a lot of costs in managing their workforce. The cost of running the HR function in most organizations is more than one-third of the organization’s entire expenses on labor/salaries. This, therefore, means that it represents a significant expense for the companies. To reduce this costs, organizations find it appropriate to delegate the HR function to a third party(Sparrow,2009). The third party should have experience and expertise in the management of employees and be performing other HR functions as might have been agreed between the organization and the third party. Organizations have many options of outsourcing the HR function. An organization can decide to either outsource the entire HR function or to delegate specific aspects of the human resource function.

The common types of agreements in outsourcing HR function include Software-as-a-service(SAAS) where software is licensed and delivered to an organization with applications that help the organization to reduce the function of the HR function and hence reducing costs. Other arrangements include business process outsourcing, single-source outsourcing as well as shared services and shared service centers(Van Tiem,  Moseley, Dessinger, Van Tiem & van Tiem, 2012).

Justification of the Project

There are many benefits that accrue from an organization outsourcing the HR function. One of the major benefits of outsourcing the HR function is that it helps to reduce costs for an organization. Most organizations spend a lot of money on organizing the HR function in their organizations. Most of the staff employed in the HR department are also permanent and pensionable, and therefore they cost an organization a lot of resources. Since human resource is not the core function of the organization, the management might find it more appropriate to delegate this role to a third party at a cost. The company agrees with the third party on the terms of the deal and the HR functions that the third party is expected to perform. In his research M,(2013) observed that by outsourcing the HR function, organizations could save up to 40% of the cost of the HR function.

Outsourcing HR function also helps an organization to focus on its core function and hence making processes and tasks more efficient. When an organization delegates its HR function, it can remove the burden of managing the workforce and hence all the companies efforts and resources are focused on achieving the primary objective of the organization (Hossain and Abdullah, 2017). This is important in achieving increased efficiency and productivity which in turn leads to better profit margins for the organization. In addition to this outsourcing, some HR function may contribute to more motivated employees and better-organized HR function (Chiang, Chow and Birtch, 2010). This is because the third party had specialized in the management of human resources and will use their experience to manage the employees better than when the function was under the company itself.

Outsourcing also helps an organization to recruit highly qualified and experienced workforce with skills that fit the job profile. This is because the third party specializing in human resource management has wider networks that assist in the recruitment process (Weissman, 2015).

Some of the negative impacts of outsourcing the HR function is that the person or company to whom the role is delegated may fail to undertake their responsibility appropriately and hence leading to failure of the entire organizations. Outsourcing some HR functions may also lead to staff becoming lacking motivation and hence affecting their performance.

Does the outsourcing of human resource function lead to increased efficiency in the organization?

Does outsourcing HR function help an organization to reduce cost?

Literature Review

Does outsourcing result to loss of control and unmotivated employees?

This study will be carried out using a combination of both qualitative research design and quantitative research technique. The qualitative research results in descriptive data that is not in numerical form. The descriptive data collected in this research will be analyzed to help uncover hidden phenomenon that will help in making conclusions related to this study. The major secondary information for this study will be collected by analyzing various journal articles, thesis, and dissertations as well as books written recently concerning the study. The data resulting from this study will be analyzed and characterized so that it those aspects that are closely related can be ranked in the same group. The classified data will be given codes for easier identification and interpretation.  Ethnography is another form of qualitative data analysis that will be used for this research. This method helps to study people and organizations in naturally occurring settings (Truss, Mankin &Kelliher, 2012). It results to summarizing observed activities and patterns which helps in making conclusions about the subject matter. The impact of outsourcing will be analyzed by mainly comparing the current performance of the HR function with previous performance when the functions had not been outsourced (Kavanagh, Thite, &Johnson,2014). Data collected through this method will be presented using reports with findings and recommendation.

The quantitative research design is used in this research to collect numerical data on the impact that outsourcing has had on the performance of organizations. The data will be mainly from the financial reports of various organizations chosen to undertake this study. The financial performance after outsourcing can be compared to that before outsourcing, and hence conclusions can be made. The data on the performance of employees can also be compared at the time when the organization had not outsourced and the current performance (Mitchell and James, 2017). The data analysis for quantitative data will be done using SPSS applications and Excel spreadsheet (Mba, 2011). The correlation and regression between the variables under study will be determined to help measure the relationship between the variables. The data will be presented using graphs and tables.

This research is expected to face some challenges and limitations. The first limitation is the time allocated to do this research may make it difficult to collect enough information and analyze it to increase the confidence level in the research. The data available on the research subject may not be accurate in some situations since some organizations may tend to exaggerate their performance.

Task/Activity	Time schedule
Preparation for the study	2nd Oct 2017-5/10/2017
Data collection from various secondary sources	6/10/2017-15/10/2017
Data analysis	16/10/2017-20/10/2017
Writing of report	21/10/2017-22/10/2017
Presentation	26/10/2017

Conclusion

This research proposal on the impact of outsourcing the HR function on organization in Australia presents the aims and objectives of the research that will help to guide the researcher during the whole research process. This paper also contains the research questions that will be addressed by the study as well as a justification of the research. The paper also contains a summarized literature review as well as the limitations of the study. The research design and methodology to be used in this study is also clearly discussed.

References

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Chiang, F., Chow, I. and Birtch, T. (2010). Examining human resource management outsourcing in Hong Kong. The International Journal of Human Resource Management, 21(15), pp.2762-2777.

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Hossain, M. and Abdullah, A. (2017). Challenges and Impacts of Human Resource Outsourcing (HRO) in Bangladesh. International Journal of Human Resource Studies, 7(3), p.63.

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M, F. (2013). Towards Successful Outsourcing of Human Resource Functions. International Journal of Human Resource Studies, 3(3), p.39.

Mitchell, I. and James, P. (2017). Outsourcing transitions and the employment relationship implications. Human Resource Management Journal.

Rothwell, w. J., prescott, r. K., & taylor, m. W. (2008). Human resource transformation: Demonstrating strategic leadership in the face of future trends. Mountain view, calif, davies-black pub.

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Sparrow, p. (2009). Handbook of international human resource management: Integrating people, process, and context. Chichester, john wiley & sons. Http://www.books24x7.com/marc.asp?Bookid=29466.

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Weissman, r. L. (2015). Mechanical trading systems: Pairing trader psychology with technical analysis. Hoboken, nj, john wiley & sons. Http://www.books24x7.com/marc.asp?Bookid=11306.