Dissertation Report

HR OUTSOURCING

A Dissertation Report Submitted for The

Partial Fulfillment of
the Degree, Masters of Business
Administration

Amity University, Noida

Content

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 Acknowledgment
I extend my heartiest appreciation to my Faculty guide Dr.Jaya
Yadav Faculty –Department Of Human Resource, Amity
Business School,Noida for providing me with the conceptual
clarity and constant guidance thus continuously supporting my
initiatives. I am highly grateful and indebted to her for
guidance throughout the dissertation.

I would like to express my sincere gratitude to the Corporate

HR team for their constant support and encouragement,& for
their valuable inputs without which the project could not have
been completed.

I would also like to extend my sincere gratitude to I would also

like to thank the following companies .

 GlaxoSmithKline Consumer Healthcare Ltd.

 HCL Comnet
 STMicroelectronics
 Xerox
 Panacea Biotech
 ICI Paints
 Eli Lilly and Company
 Alcatel

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 Executive Summary
Human Resources as a function has undergone dramatic changes in last decade or so, with large scale
shifts in the Indian economy and corporate structure .In our growing global economy, human resources
functions are becoming increasingly complex and resource-intensive. For an outsourcing solution to help
your company cut costs and manage human resources, you need a partner who understands how to add
value to your company.

Priority is now being given to key areas like performance management, talent acquistion,measuring HR
performance ,leadership development and potential assessment.

Outsourcing HR can help you:

 Increase HR program alignment with business objectives

 Reduce staff and operating costs, while maintaining and even improving services
 Reduce the risk for potential non-compliance with new laws and regulations

I have taken this topic as I will be covering the HR activities which are top priorities for HR Professionals
as well as activities which can be outsourced. As this Topic will help me to study more about today
growing economy HR trends. How HR departments are operate and how do they manage to be business
partner? Other than that I will be studying all the HR functions .

Research on the outsourcing decision and identifies the key factors that companies should consider when
making important outsourcing decisions. The framework, which helps assess the pros and cons of
outsourcing, can be applied specifically to HR functions will be studied under this topic by taking
examples of few companies.

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Introduction:

This perspective underscores an important issue for 21st century human resource organizations: the need
to provide strategic support and guidance to the organization while, simultaneously, delivering high-
quality administrative services. Often,HR organizations give priority to the administrative services that are
directly visible to the employees they support (e.g., payroll, benefits administration) rather than the
strategic initiatives that can have a much more significant impact on the employees and the organization.

Chief Human Resource Officers (CHROs) are under significant pressure to deliver this entire package of
capabilities, and to drive more value to the organization through strategic HR activities (e.g., talent
management) while being forced to reduce headcount and costs.

Outsourcing HR activities is one approach that CHROs are considering to meet the demands of delivering
both strategic and administrative excellence. CHROs are attracted to the idea of being able to deliver
quality HR administration through a specialized partner, potentially at a lower cost, while focusing
internal resources on more strategic efforts.

At the same time, however, CHROs recognize that there are many challenges inherent in pursuing this
delivery strategy. For example, a recent study by the Society for Human Resources Management indicates
that 64 percent of organizations surveyed were concerned that outsourcing efforts would affect client
service, 51 percent indicated they were fearful about a loss of control and 33 percent indicated they were
worried about the effect of outsourcing on the corporate culture.

Therefore, companies need to carefully consider the range of choices and decisions that need to be made
as they consider the opportunities presented by outsourcing.

Outsourcing the human resources department is not that different from outsourcing any other function in
terms of the problems to be faced. However, there is one factor that makes it difficult for most
organizations to contemplate such action. The HR department is involved with issues that are critical to
the well-being of the entire workforce and to outsource those responsibilities will normally be seen as a
strong indication to all concerned that the management does no rate these issues highly.

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In addition, it is important to think about the effect on the employees being transferred. They should play
the caring role in the organization. Will they care as much if they are outsourced or, more importantly,
will they be perceived as caring as much? In addition, once they are outsourced, will they lose contact
with the corporate philosophy or culture? Will they adjust to their new employer’s culture.

Major organizations appear to be constantly reducing the number of employees on their payrolls – a
process that shows no sign of slowing down. Nevertheless, for most organizations their employees will
remain one of their most important assets.

When redundancies abound it becomes even more important to make sure that the organization is
perceived as being interested in the welfare of the remaining staff. It is natural in the period following
major redundancies for employees to want to check out various elements of their benefit and sadly this
often coincides with a dramatically increased workload in the HR department.

In such an environment of distrust and fear even the introduction of interactive technology that allows
employees to update their benefits arrangement, retirement contribution and payroll deductions may
sometimes be seen as a sing that senior management does not care.

None of the above factors can be taken as proof that outsourcing the HR function is always right or always
wrong. They do, however, suggest that great care must be taken before steps that cannot easily be
corrected are put in place.

For Major organizations the ‘natural’ HR service provider’s whole be the major international
consultancies – several are actively pitching for such work. And yet over the last few decades these
consultancies must have under-performed the rest of industry in HR management by a very long way.

Excessive staff turnover in the HR department of these major consultancies has been the norm for long
time and HR management has often been a sinecure for tired or failed partners. Having said that, I have to
admit that if I were under pressure to outsource a major HR department I would be drawn to considering
these firms.

Let’s face it, these organizations employ bright people and they ought to be able to create top class HR
services using the latest technology.
Finally, it is worth remembering that in most of the developed world the client is rarely able to transfer
full responsibility for staff simply by outsourcing them and placing them on another organization’s
payroll.

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Given these factors I would not expect an enormous rush amongst established organizations to outsource
this function. I would not expect an enormous rush amongst established organizations to outsource this
function. I would, however, expect some growth in HR outsourcing companies that make most of their
income from providing specialist personnel managers on a part-time basis to small companies.

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What is HR outsourcing?

Any activity in which a company lacks internal expertise and confidentiality and requires an unbiased
opinion on human resources, can be outsourced. An important reason why various businesses turn to
outsource HR services is that they do not have the time or expertise to deal with the situation.

According to Hewitt Associates HR consulting outsourcing can be segregated into two broad categories:
Transaction and administration outsourcing and HR consultancy. Transactional outsourcing is more of
day-to-day or month-to-month requirements, and constitutes services like payroll and benefits. This kind
of service is more prevalent in the Indian market. In the value chain, it falls at the lower-end compared to
HR consultancy, although it happens to be an essential function. It is a fact that companies continue to
manage the strategic and policy functions of their HR departments in-house.

HR outsourcing can happen in various areas such as payroll, employee benefits administration, fixed
assets administration, network management, receivables management, logistics management, hardware
maintenance, telemarketing, call centres and database management. In India, the most common processes
outsourced are related to training, payroll processing, surveys, benchmark studies, and statutory

compliance. Ajay Oberoi, vice president and head of human resources and administration at Aptech,
however feels that there is ample scope available in HR outsourcing, which companies can explore.
Agrees Vikram Bhardwaj, a consultant with Stanton Chase: “There are 18 processes in HR that can be
outsourced. Worldwide, only Exult has the know-how and ability to outsource more than five processes. I
believe that Indian vendors still do not have the background and expertise in outsourcing services in the
HR vertical, probably with the exceptions of India Life Hewitt and Crossdomain Solutions.”

Differences Between HR Insourcing And HR Outsourcing:

 Outsourcing places the responsibility for the continuous improvement of a company's HR and
benefits administration in the hands of a provider whose core competency is human capital
management. In addition, the administration provider assumes the challenge of recruiting, hiring,
training, and retaining the specialized human capital management talent necessary.

 Insourcing prevents an external service provider from managing all the human capital and
processes for a company's HR and benefits administration by placing that responsibility entirely in
the hands of the company's internal human resources department.

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Points to take care of while out sourcing

It is essential in an outsourcing arrangement that key elements such as the Service Level Agreements
(SLAs) are adequately written up in the contract because they proved the legal structure by which the
provider’s performance can be measured.

Nevertheless, even where the contract documentation has been found to be watertight form the client’s
point of view, there have still been numerous cases where the provider failed miserably to reach the
desired targets.

Although some of these failures may have been due to simple incompetence, it has become apparent that
the most common reason has been that at some stage the provider has become convinced that
concentrating on other more lucrative contracts world produce better return. Once that happens, it would
appear that even the tightest of contracts could do little to safeguard the client’s position.

For that reason, it is now believed that the wise client will build an element of risk/reward motivation into
the arrangement so that there is always the opportunity that a special effort on the provider’s part will
produce an adequate reward.

Sadly, even these partnership arrangements have been known to fail and the reason put forward most often
for this situation is that yet again the provider has found other, even more locative contract.

The question of size very important. Apart form owning or taking an equity stake in the provider, the best
thing a client can do when entering into an outsourcing arrangement is to ensure that the continuation of
their arrangement is always going to be of prime importance to the provider. I appreciate that this is easier
said than done, but clearly it is much more likely to be achieved if the client is a key player with a
provider who has a small number of clients, than if it is a small player with a provider with many clients.

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Key questions associated with outsourcing human resource processes:

Six important questions that companies should focus on as they decide whether to outsource some or all of
their human resource processes:

1. What are the external forces that are driving the company to examine the opportunities
for outsourcing HR activities?
2. What are the internal drivers that make HR Outsourcing an attractive proposition?
3. How should the company identify potential processes to be outsourced?
4. Who should be involved in making the decision to outsource HR processes?
5. How should the company evaluate potential vendors?
6. How should the company begin to prepare itself for HR Outsourcing?

1. External forces:

Globalization, restructuring, increased administration complexity and cost pressures are all driving
companies to consider the use of HRO (HR Outsourcing). As companies begin to operate in more
countries, they are finding it increasingly difficult and costly to keep track of, and manage, the variety of
benefits and regulatory requirements in each area.

For example, a multinational organization that has been built over time fro m a series of acquisitions and
buyouts can find itself with a bewildering mix of compensationpackages, pension plans, human resource
management (HRM) systems, hiring guidelines and HR contact centers.

Further, as compliance directives and legal regulations change in each of the countries in which the
company operates, the company’s ability to stay current becomes more difficult and costly as extensive
resources are required to maintain and apply this knowledge. Allowing an outside
party that has already built existing capabilities in these areas to manage the process becomes an
increasingly attractive proposition.

Those interviewed also suggested that increasing numbers of spin-offs continue topropel interest in HR
Outsourcing As companies spawn new businesses, these new organizations need to rapidly establish an
HR infrastructure without raiding the talent of their parent organizations.

Outsourcing provides these newly founded companies withexisting resources, processes and technology
that they can quickly adopt as they are ramping up their new operations.

Finally, overall cost pressures are forcing companies to identify new methods for cutting administrative
expenses. A number of recent studies suggest that reducing costs is the primary benefit that companies
seek when outsourcing HR processes.

As new competitors enter the market, particularly those with lower labor costs, many companies’ profit
margins are put at risk, prompting them to examine closely all activities where cost reduction is possible.
Outsourcing provides an opportunity for companies to leverage the cost base and experience of an outside
provider, which can potentially lower the cost of delivering HR services, while maintaining or improving
service levels.

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2. Internal drivers

A number of internal drivers are also pushing firms to investigate HRO. For example, some companies see
it as a means of controlling the cost and effort associated with operating their HRM systems. After
evaluating the total cost associated with upgrading and maintaining these systems, companies are
increasingly turning to outside providers to manage their HRM systems and take responsibility for
upgrades and system availability.

Companies are also recognizing that they are unable or unwilling to bear the cost of developing employee
or managerial self-service tools; they would prefer to “rent” these applications from outsourcing providers
who have already invested in development, have the ability to keep up with the latest technology solutions
and can provide best-in-class tool sets.

Also, the level of complexity involved in administering complicated programs and processes in multiple
regulatory environments and managing data across borders often requires sophisticated expertise which
many companies may not have inhouse. Sourcing this capability from a vendor could offer lower costs
and a higherlikelihood of staying current on recent developments.

Third, companies want to reduce the risks associated with business volatility. Having gone through
numerous hiring/layoff cycles, they are looking to increase process capacity without commensurate
increases in full-time headcount.

For example, companies need to increase their ability to recruit without having to bring on a number of
full-time recruiters (because, typically, recruiters are the first people exposed to layoffs during a business
slowdown). Another example might be providing HR support for mergers and acquisitions.

At companies where mergers or acquisitions are made infrequently, it may not be feasible to maintain in-
house HR skills that can support activities such as benefit plan reconciliation, outplacement assistance and
HRM systems integration. A vendor can more efficiently maintain
these skills and provide them only when they are required by the company.

Fourth, as organizations try to shift resources from administrative to more strategic activities, outsourcing
offers one way to build a new sense of focus within HR organizations. Many HR organizations believe
being able to reengineer their internal processes and deliver strategic HR services is simply too much for
one organization to undertake at the same time.

However, by allowing a vendor to manage many of the administrative processes that take time and energy
away from HR organizations, the internal HR organization can focus its limited resources on delivering
the services that truly provide strategic benefits to the entire company. Lastly, for many organizations,
outsourcing serves as a catalyst for change.

Implementing and maintaining a client service orientation and metrics-driven approach are difficult for
most HR functions to achieve on their own. In an outsourced environment, these skills are critical in
determining the success or failure of the arrangement. Therefore, outsourcing efforts can be used as
motivation to move HR service delivery toward a more accountable, results-oriented focus.

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3. Selecting the right processes

Determining the scope of the outsourcing effort is among the most important and difficult decisions
companies make. Recently, several studies have indicated that the processes most likely to be outsourced
are retirement program administration (including defined benefit, defined contribution and retiree
services) and health and welfare administration (including flexible spending and COBRA administration
in the U.S.).3 Further, these studies found that HR processes closely associated with employee evaluation
and communication are the least likely to be outsourced.

To make the right decisions on which processes to outsource at a particular company, it is helpful to
establish a formal set of evaluation criteria. Paul Adler, a management professor at the University of
Southern California, suggests six dimensions an organization can use to evaluate HR processes when
identifying their potential for outsourcing:

a) Dependency – are there specific assets that require dedicated facilities,

equipment, capacity, training or investments?

b) Spillover – is there confidential information or sources of advantage that could be

leaked to competitors?

c) Trust – is there a positive relationship between the two organizations that could
reduce transaction costs associated with contracting and monitoring?

d) Competence – can greater vendor capability in process execution lead to

improved results?

e) Core capability – is this process viewed as a differentiator for the organization in

the marketplace?

f) Commitment/flexibility – is the process stable enough so that changes in capacity/

technology are not required on a frequent basis?

In addition to the criteria that Adler has developed, our discussions with outsourcing
practitioners suggest a seventh dimension that should also be considered:

g) Need for physical presence – does the process require regular assistance from a
local onsite presence (i.e., it cannot be provided remotely)?

Further, organizations should examine the potential synergies associated with outsourcing multiple
processes. For example, payroll administration, employee data management and benefits administration
processes are often tied together through the use of a common master employee record.

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Outsourcing these processes as a group can reduce complexity and cost of independently managing the
processes and associated systems through multiple vendors. Although many of the companies that we
spoke with had not gone through a systemic analysis of their processes in this fashion, we believe that
companies can benefit from applying these criteria to all of their HR activities.

Formal evaluation criteria can also be useful in assessing the viewpoints of multiple stakeholders and
serving as the basis of discussion during the early planning stages of an outsourcing arrangement.

4. Getting the right people involved

During our research, we asked about the key individuals who need to be involved in the HRO decision.
Three sets of participants became apparent during these discussions:

• Decision-makers. Our interviewees viewed four individuals from three different functional units as
integral in making the decision to outsource an HR process. Within the HR organization, the CHRO (or
equivalent title in the organization) usually plays an active role in making the outsourcing decision.
Ultimately, it is the CHRO’s responsibility to determine whether the outsourcing arrangement will enable
the HR organization to provide cost-effective, quality service to its internal clients, while, at the same
time, support the organization’s larger strategic
objectives.

In addition to the CHRO, the HR Operations Leader (usually a direct report to the CHRO) is often
involved in developing the specifications of the outsourcing arrangement. While the HR function clearly
has primary responsibility in this area, two other individuals play important roles in the outsourcing
decision.

The Chief Financial Officer often participates in the decision-making process, as entering into a long-term
contract with an outsourcing vendor can have potentially significant financial ramifications for the
corporation. In addition, the Procurement Manager assumes a prominent role during the vendor selection,
negotiation and contracting process, leveraging experience in developing terms and conditions that are
favorable to the organization.

 Influencers. Two groups of individuals were seen as influencing, if not directly participating in, the
HRO decision. Given the importance of integrating HRM systems with various vendor-driven
applications, the Information Technology (IT) organization should have input in the HRO decision
process.

IT must determine how the outsourcing arrangement will impact current and future technology
investments and plans. Also, the leaders of the various business units supported by HR usually provide
input into the decision, as their employees are the ones most likely to be impacted by changes in processes
and service levels.

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 Approvers. Typically, the CEO and the Board of Directors are responsible for final approval of the
decision to outsource HR processes. This is particularly true if a significant number of processes are
involved, if the outsourcing arrangement will impact a large number of jobs throughout the organization
or if the arrangement will require communication with important external stakeholders such as industry
analysts and financial markets.

A significant outsourcing deal can signal changes not only in overall strategy and approach to managing
human capital, but also efforts to cut costs, focus on core competencies and mitigate risks. Further, a
decision to outsource components of the human resources organization may be perceived by the others in
the organization as the first step toward outsourcing other non-core processes. Given the impact of these
types of arrangements, the CEO and Board of Directors need to understand and articulate the rationale for
the decision.

5. Selecting the right vendor

Once the right individuals have been identified to make the outsourcing decision, the next major step in
the process involves selecting an appropriate vendor. A number of recent studies have highlighted three
primary criteria that companies use to evaluate vendors

These include: the vendor’s track record for delivering service, the costs associated with the outsourcing
service and the willingness of the vendor to guarantee service levels. Other criteria highlighted by these
studies included: the vendor’s technological capability and competence, process expertise, flexible
contracting, recommendations from other companies, relevant industry experience, the ability to manage
transition risk and client experience. To evaluate vendor capabilities in these areas, we found companies
undertaking a host of activities including:

• Distributing experience questionnaires. As part of this activity, a company develops a standard

experience questionnaire that it sends to multiple vendors early in the evaluation process to obtain initial
insights and compare vendors’ capabilities.

Information that is usually collected as part of this process includes understanding the vendors’ areas of
expertise, client experience, approach to contract development, service level creation and how they
address changes in project scope. There are a number of third-party consultants who, having participated
in many vendor selection efforts, have developed and refined these types of questionnaires to quickly
ascertain a vendor’s particular level of experience.
• Conducting a financial and credit review of the vendor. Companies undertake this activity to determine
whether the vendor has the financial resources to maintain appropriate service levels throughout the
lifespan of the contract. During this review, the potential client examines the vendor’s history of fiscal
responsibility and regulatory compliance, its credit rating and analysts’ predictions of ongoing viability.

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Companies are also looking for signs that the vendor is a potential takeover candidate, as an acquisition
can often redirect senior management attention and increase the complexity of the ongoing relationship.

• Conducting a security and compliance review. Given the sensitivity of the employee data associated
with an HRO relationship, and the governmental/ industry regulations and standards associated with the
privacy of employee data, companies should conduct a review of the vendor’s security and compliance
policies and procedures. As part of this assessment, companies
should investigate whether a vendor has a demonstrated knowledge of, and is in compliance with, the
regulatory requirements of each of the countries in which it operates. They also should determine if the
vendor has been fined as a result of noncompliance and if the vendor has access to regulatory and legal
specialists on staff or on retainer.

• Conducting reference checks/site visits to other clients. Organizations considering outsourcing often
speak with or visit current clients of vendors under consideration. This allows them the opportunity to
validate other clients’ experiences and identify potential issues in working with the vendor. During these
meetings, evaluators can get a sense from their counterparts at those other firms as to the vendor’s
flexibility, willingness to support new client programs, ease of partnership and whether the vendor has met
the client’s overall expectations.

• Visiting processing/contact centers. Many companies find it quite useful to visit the actual locations
where the vendor is answering employee calls and processing documents. This gives the prospective client
a sense for how the vendor is organized and what technology is being used.

This first-hand view can be coupled with assessments of the attrition rates at the center and how service
center staff are trained, evaluated and given feedback to continually improve their
Performance. These visits also provide potential clients a glimpse at the level of professionalism and
service that their internal clients will likely receive and the level of investment the vendor is putting into
its own staff and operations.

• Meeting potential delivery team leaders. Given the importance of personal relationships
between client and vendor, potential clients should meet the individuals who will be responsible for both
service delivery and the overall account relationship. These face-to-face meetings can help potential
clients understand the managerial style of their counterparts and the extent to which specific individuals
have authorityto act on behalf of the vendor in addressing client concerns.

Further, should the potential client decide to engage the vendor, these initial face-to-face meetings can
begin to lay the groundwork for the type of trust building that is critical during the
transition phase and subsequent ongoing operations.In some situations, we found organizations that were
willing to undertake the overall vendor evaluation process on their own. However, several companies that
we talked with engaged third-party consultants to help them during the vendor evaluation and selection
process.

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According to one study, 53 percent of companies who outsourced a component of HR used consulting
help during the decision-making process.6 Activities performed by a third-party consultant typically
include:

• Determining requirements
• Developing bid process and evaluation criteria
• Developing the request for proposal
• Determining which vendors will receive the request for proposal
• Evaluating submissions and determining the short list of potential candidates
• Conducting screening interviews and site visits
• Assisting in the due diligence process
• Developing service level agreements
• Assisting with contract development and negotiation

Individuals we interviewed reported a number of advantages in working with a thirdparty

consultant. Outsourcing consultants can provide a clearly defined process and methodology for evaluating
vendors that has been used with multiple companies. Their knowledge of vendors can help ensure that
only the appropriate organizations are asked to provide bids for service, saving evaluation time later in the
process.

They can also help standardize vendor responses, making it easier to evaluate and compare different
vendor options and also making the process fair, especially when there are conflicting views within the
organization. Given the variety of demands placed on today’s executives, outside consultants can also help
ensure that the selection process obtains the focus and momentum needed to be successful.

However, companies also reported a number of challenges in working with these third-party consultants.
First is the short-term expense, which can run over US$1 million for large-scale, integrated, multiyear,
outsourcing arrangements. While this may represent only a fraction of the total amount of the outsourcing
contract, this up-front cost is a substantial initial investment and commitment. Second, some individuals
that we spoke with indicated that the structured processes employed by these providers increased the time
and labor effort needed for the evaluation process.

Finally, they noted that using a third-party consultant can limit the level of interaction between the
prospective client and the vendor, making it difficult to develop a strong, up-front relationship early in the
process.

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6. Preparing the organization

As executives get closer to making the decision to outsource HR processes, they need to pay special
attention to preparing the organization for the eventual transfer of people, processes and/or technologies to
the vendor.

• Assembling the team that will lead the outsourcing effort. Once the decision to outsource as been
agreed upon, the organization needs to identify and select individuals to lead the transition and ongoing
management of the outsourcing arrangement. Initially, the organization needs to identify the roles and
skills that will be required to transfer the outsourced activities to the vendor and oversee the vendor
relationship.

Finding these individuals can be a time-consuming effort, as they often have other significant
responsibilities and need to be made available to work on the outsourcing effort. Therefore, it is beneficial
for the organization to obtain the time and commitment of these individuals and their managers early in
the process, rather than waiting for the final contract to be signed.

• Communicating the effort throughout the HR organization and the lines of business. Many
organizations fall into the trap of developing their communication strategy after the outsourcing agreement
is put into action. However, effective companies start executing a tailored communication plan far earlier
in the process, as they recognize that rumors will likely surface long before any formal discussions are in
process.

Organizations need to develop formal mechanisms for communicating to HR leaders and staff during the
early stages of an outsourcing effort since these individuals may be called upon to provide data or
reallocate their time to work on outsourcing related tasks. Further, organizations need to listen closely to
informal influencers within the HR organization and business units, as they may have insight into
potential areas of resistance and concern that can have a negative impact on the outsourcing effort.

• Gathering data on the current state of the HR organization. To develop a compelling business case for
HR BTO, organizations often need to obtain a clearer understanding of their current spending for HR
activities and measure levels of operational effectiveness. Also, many organizations do not have a strong
sense for the industry and competitive benchmarks that are useful in comparing HR cost and performance
across companies.

Collecting this data can be a timeand labor-intensive process that often must be accomplished in a
relatively short amount of time. While outside resources can be used to facilitate this collection, both
internal HR process experts and individuals with experience in obtaining information from HRM systems
need to be involved. Dedicating these scarce resources is well worth the effort, as it can help ensure that
the organization is entering into a financially beneficial arrangement.

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What can be achieved by outsourcing HR functions?
Reducing operating costs is often the main reason to consider HR outsourcing. The financial benefits are
two-fold. In the first place, savings are made by capitalising on the economies of scale that only a
dedicated outsourcing provider can deliver. Secondly, profit and productivity can be improved when the
very best HR policies are adopted.

But organisations are now often looking for additional benefits that outsourcing can bring:

 You can ensure best practice by working with specialist HR experts

Best practice in staff benefits, health & safety, welfare, employee relations, training, recruitment
and administration can be hard to achieve, especially with an under-resourced, over-stretched HR
function.

 HR managers and directors can spend more time on strategic issues

The senior HR team can get bogged down in managing the administration of standard processes.
By outsourcing this task, they can concentrate on contributing to their organisation’s success
Organisations of all sizes entrust HR functions to us. Some are SMEs employing a few hundred
people, some are blue chip companies with thousands of employees. They might ask us to provide
individual HR services such as the review and development of job evaluation, recruitment and
selection policies, or to run every administrative aspect of their HR function.

Supply a great breadth of services. Clients look to us for the full range of HR services, from developing
HR strategy through to operational level activity such as professional advice during tribunal proceedings.
And of course we can look after every conceivable aspect of HR administration - and we can provide
payroll services as part of the arrangement.

Organisations of all sizes entrust HR functions to us. Some are SMEs employing a few hundred people,
some are blue chip companies with thousands of employees. They might ask us to provide individual HR
services such as the review and development of job evaluation, recruitment and selection policies, or to
run every administrative aspect of their HR function.

We supply a great breadth of services. Clients look to us for the full range of HR services, from
developing HR strategy through to operational level activity such as professional advice during tribunal
proceedings. And of course we can look after every conceivable aspect of HR administration - and we can
provide payroll services as part of the arrangement.

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What are your main reasons for outsourcing?

One of the first tasks facing the management team of an organization embarking on an outsourcing project
is to established what it ants form the arrangement. These days most mangers are familiar with the basic
reasons for outsourcing put forward by the management gurus.

 the desire to concentrate on core activities;

 the need to improve the service; and
 the often pressing need to reduce the c To reduce and control operating cost
 To improve company focus
 To obtain resources they lack
 To free their own resources for other tasks
 To gain access to "World Class" capabilities ost.

Virtually all the initial approaches to service providers concentrate on these three points and consequently
receive little attention unless the potential client explains them in a convincing way. More importantly, an
assumption that the reasons are will known and obvious may mean that the client management has failed
to analyze its own special reasons early enough.

Well before anything is sent to potential service providers, the client must establish what it really
wants to achieve. Getting each of the senior providers, of the function and the senior users to document
their aims in order of priority is an excellent way of doing this. Even if a re-engineering exercise has
recently been carried out, it still worth going through this exercise as it reinforces the question ‘What are
we trying to achieve by considering this option?’

It really is beneficial for the client’s negotiators to be absolutely sure of the main reasons for considering
outsourcing. If the key reason is to turn the service into something that better matches the perceived
current and future need of the users, then the negotiators are aware that a value added improved service is
paramount and this could mean that the cost factor is significantly less important.

It is conceivable that the comfort of knowing cost cutting is not the key aim may result in the opportunity
for the service provider to maximize the client’s competitiveness by creating a ‘Rolls Royce’ type service
in the short term. Such an opportunity would certainly be lost if the s4ervice provider has any doubts
about the client’s main aims.

These doubts arise automatically in outsourcing because any experienced service provider will have
numerous stories to tell of potential clients who claimed that their main aim was an improved service and
then chose the provider submitting the lowest cost without considering the service quality. In a
competitive tendering situation, therefore, the provider usually starts by liking for ways to keep the costs
as low as possible.

19
If a significantly improved service is paramount, it will be essential to stress this aim at every opportunity
when writing to or talking to the competing provider in order to overcome any latent skepticism.
However, emphasizing the need for an improved service need not reduce the opportunity for maximizing
cost saving. A balance can be obtained by making it very clear that cost will only play a part in the
decision should two providers submit equally attractive service proposals. All very obvious points, but it is
surprising

Categories of HR Outsourcing Services:

HR outsourcing services generally fall into four categories:

 PEOs,
 BPOs,

 ASPs,

 E-services.

The terms are used loosely, so a big tip is to know exactly what the outsourcing firm you are
investigating offers, especially when it comes to employee liability.

PEOs

A Professional Employer Organization (PEO) assumes full responsibility of your company's human
resources administration. It becomes a co-employer of your company's workers by taking full legal
responsibility of your employees, including having the final say in hiring, firing, and the amount of money
employees make. The PEO and business owner become partners, essentially, with the PEO handling all
the HR aspects and the business handling all other aspects of the company.

By proper definition, a service is only a PEO when it takes legal responsibility of employees. But take
note--some HR outsourcing services like to use the recognized term "PEO" when they handle the primary
aspects of HR like payroll and benefits, yet they do not take this legal partnership.

BPOs

Business Process Outsourcing is a broad term referring to outsourcing in all fields, not just HR. A BPO
differentiates itself by either putting in new technology or applying existing technology in a new way to
improve a process.

Specifically in HR, a BPO would make sure a company's HR system is supported by the latest
technologies, such as self-access and HR data warehousing.

20
ASPs
Application service providers host software on the Web and rent it to users—some ASPs host HR
software. Some are well-known packaged applications (People Soft) while others are customized HR
software developed by the vendor. These software programs can manage payroll, benefits, and more.

E-services
E-services are those HR services that are Web-based. Both BPOs and ASPs are often referred to as e-
services.

Who's who?

These services listed are fairly straightforward in their own right. But the confusion comes as these
services increasingly cross over into other types of services, or shed some of the services for which they
are known.

For example, some BPOs will take over legal responsibility in much the same way as PEOs, while others
do not. And many ASPs/e-services will also consider themselves to be BPOs because they are
implementing new technology by hosting software and allowing self-service for employers and
employees.

So know these service terms, but don't get too sidetracked by the names when interviewing potential
outsourcing firms. The key to hiring the right outsourcing firm is knowing what services your company
needs and then find an outsourcing firm that can provide them.

Most important criteria for choosing an outsourcing provider were:

 Guaranteed service levels;

 A proven track record;

 Guaranteed cost savings; and
 A compatible corporate culture.

Clearly, cost savings is just one of several factors companies should consider when outsourcing. Variables
such as efficiency and reliability must be carefully evaluated as well. Other important variables cited in
the survey responses were the provider's professionalism, expertise, and technological efficiency.

21
A company's relationship with an outsourcing provider is typically a long-term partnership. As a result,
companies should consider:

 The accountability of the provider;

 Whether the provider has a schedule of ongoing process improvements (e.g., Web-enabled HR
processes continually upgraded with the latest technology); and
 Employee satisfaction levels

What can you get?

When you outsource HR functions, some services go with the "all-or-nothing" approach, requiring that
they handle all your HR functions or none at all. Others offer their services "a la carte," meaning you can
pick and choose from the services they offer.

Typical services include:

 Payroll administration: Produce checks, handle taxes, and deal with sick time and vacation time.

 Employee benefits: Health, Medical, Life, 401(k) plans, cafeteria plans, etc.

 HR management: Recruiting, hiring, and firing. Also background interviews, exit interviews, and
wage reviews.

 Risk management: Workers' compensation, dispute resolution, safety inspection, office policies
and handbooks.

Some services are full-service and will provide these as well as additional services like on-call
consultants, who will come in to train or even settle a dispute.

Online services tend to be limited in their offerings, but you'll get added options like Web access, which
will allow you to view information (like benefits packages) and even make changes to such information
online. Most will give you and your employees access to view their benefits plans, enroll in benefits, read
policies, and make changes to current data.

Even PEOs that have survived off-line since the early 1980s are starting to offer online access for certain
aspects of their service (like viewing benefits packages).

Pricing

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There are no clear-cut price ranges with HR outsourcing. The fees range greatly between services, as well
as within the services. Aspects like number of employees, the options you choose to use, and even
geography, will affect your overall cost.

A PEO typically charges 4 percent to 8 percent of each employee's pretax salary per month. The monthly
range can be as little as $20 per employee to as much as $200.

A typical package with an online service, including insurance, 401(k) and workers' compensation, costs
$75 to $130 per employee per month with an upfront setup fee of about $2,000.

If you think this sounds expensive, do a cost comparison of an outsourcing program you are investigating
and the average salary and maintenance of an in-house HR director or staff. You might find significant
savings either in money, hassle, or both.

Contracts with HR outsourcing firms will usually run a year. But you should work in a clause in which
you can give 30 days' notice to break the contract if you are dissatisfied with the services or don't need the
services anymore.

Advantages Of HR Outsourcing

Does your business allow you the time to personally deal with federal and state employment laws? A big
reason businesses turn to HR services is that they don't have the time, or expertise, to deal with this. And
if you choose to go with a PEO, you can pass the legal responsibility of your employees onto them.

You may also save money. You can usually count on a reduced benefits rate when outsourcing to HR
services. Because they buy so often from vendors, they usually get a discounted rate that they pass on to
you.

If you opt for an online service (ASP/e-service), you don't have to purchase software, install it, and worry
about configuring it. An ASP business model is hosting software, so you don't have to bother with
additional software or installation.

Downsides

So what are some key things you'll have to give up if you favor outsourcing to hiring a full-time, in-house
HR department?

There are some definite drawbacks to not having an HR manager in-house. An in-house HR person
handles perks that you can't necessarily count on an outsourcing service to carry out--like looking into
group offerings, building employee incentive programs, even taking care of recognition for employees'
birthdays. And employees may want someone in-house--an impartial co-worker they can trust and see
daily--to turn to if they have a work-related problem or dispute with another co-worker.

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Because an in-house HR person interacts daily with your employees, they will likely have more of an
interest in your employees. For example, employees often appreciate having someone on staff who will
help negotiate in their favor for certain benefits that are critical these days for employee retention (like
401(k) plans and vacation policies).

Also, in the case of using a PEO, giving up the right to hire and fire your employees may not be desirable
for your particular business. Most PEOs insist that they have the final right to hire, fire, and discipline
employees. While having the extra time and not having to deal with the stress of this may be appealing,
you may not want this responsibility out of your hands.

And if you decide to use an e-service, the same issues you'd have with any ASP remain. When everything
is stored and handled online, there are concerns about security as well as potential crashes, both of which
can be detrimental to your business.

Common complaints about HR outsourcing range from payroll mix-ups to payroll not being deposited on
time to denied medical claims.

Should you consider outsourcing?

If you have fewer than 100 employees, the answer is yes. At this size, you often don't have the resources
for an in-house HR staff, so outsourcing is just right for you. You don't have to worry about managing all
the details that are so critical to HR in your business, and most small-business owners just don't have the
skills and experience to do so. Remember, HR functions must be handled correctly as close to 100 percent
of the time as possible; slip-ups can cause your business major problems.

If you have at least 12 employees, consider a PEO. Most PEOs only take on businesses with at least a
dozen employees. Get recommendations and references for PEOs, and consider one that is part of the
NAPEO (National Association of Professional Employment Organizations). The NAPEO is committed to
educating PEOs. If a PEO is a member, it's a good sign that they are committed to being the best in the
field.

If you're even smaller, online services are the way to go. These services are tailored to work with all sizes
of businesses, even the smallest. You don't have to give up legal responsibility just yet, and you'll be able
to easily access your information online. And since the charge is usually by user, you won't be overpaying.

If you're uncertain about outsourcing everything but know you don't have the staff or experience to keep it
in-house, try outsourcing only certain parts, such as payroll and benefits. You can also purchase HR
software right off the shelf to support any in-house efforts.

Whatever you decide, make sure to keep your employees in the loop. They will appreciate knowing that
you are seeking the most affordable solution for the business while doing your best to meet their needs.

24
Factors hampering HR outsourcing:

 The fear of losing jobs

 Loss of sensitive information to public/competition
 Ethics and quality of outsourcing vendors
 Possibility of security breaches
 Cost-benefit equation not clear
 Lack of psychological acceptance

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The 10 golden rules for HR outsourcing:
Initially, HR BPO was thought to be the panacea that organisations had been seeking, in that the majority
of HR processes are outsourced and/or automated. In fact, the first phase of HR outsourcing has educated
both buyers and providers to the extent that there is greater strategic clarity from the offset.

As organisations weigh up the options (whether to outsource; if so, what, when and to whom?) the choices
can be overwhelming.

1) Be clear about the objectives – the initial interest in outsourcing HR is often cost driven, and may
centre on a number of objectives:

 The need to deliver administrative HR services, such as payroll and benefits, more cost-effectively.
 The aspiration to improve HR service levels.
 The company’s desire to access enhanced HR technology without incurring the cost of up-front
investment.
 A requirement to track and report key metrics on HR costs and performance.

Whether your objectives coincide with the ones above or not, they still need to be defined and prioritised.

2) Put significant effort into the initial preparation – whatever your objectives are, there is always a
great deal of essential groundwork to do. If the objective is to run HR services at a lower cost, then
knowing the true cost of the current services is crucial. Extracting this information requires a lot more than
simply plucking the costs of the relevant staff out of the HR department budget. Question whether your
staff are wholly engaged in this work, or whether they also undertake other activities? Are staff actually
responsible for the whole exercise, or is a hidden cost being borne by the line collating data, for example?

If the objective is to improve HR service levels, then the starting point is to be clear what they currently
are. Having established this, there are then some challenging questions to ask line managers about which
service levels need to be improved, and why. Will reducing the turnaround time of advertising a job really
add value to the organisation, for example, or is it just an added bonus?

3) Treat outsourcing as a change-management exercise – even exploring the possibility of outsourcing

will send shock waves through the organisation. Managers and employees may have previously
complained about the in-house HR function, but the prospect of dealing with a stranger will quickly cast a
rosy glow over the past. Meanwhile, staff in the HR department itself will be viewing the future
apprehensively, wondering whether they will have a job and what that job might be.

Classic, good change-management practice will prevent distress. Communication, openness and honesty
are essential throughout this process, as well as the recognition by senior management that HR service
delivery may suffer a few temporary glitches during the process.

26
4) Involve business leaders and managers – experience proves that the involvement of senior business
leaders in the HR function is critical to high levels of satisfaction in HR outsourcing 2. HR is usually the
centre of expertise for outsourcing but when it comes to considering outsourcing the HR function itself,
objective input is essential to the discussion. Furthermore, the purpose of HR is to serve the needs of the
business, so business leaders have to help prioritize the objectives.

5) Review all the interfaces between HR and the rest of the organization – HR does not operate in
isolation and it is all too easy to overlook the points at which it connects with other functions. For
example, if payroll is to be outsourced, how will the finance function access the data required for a
monthly report?

6) Think through the implications for the remaining in-house HR functions – having stripped out
most, if not all, of the administrative and transactional work from their HR function, many companies then
realizing that this was the easy part. To deliver real strategic value to the organization (which is usually a
key objective of the outsourcing initiative) the retained function must be refocused in other areas. In a
recent survey, 87 per cent of respondents said that their HR generalists needed new skills, with 64 per cent
indicating that this requirement was great, or very great after their BPO transition 3. Strategic thinking,
change management and business acumen skills were the three most frequently mentioned competency
gaps.

7) Re-examine internal processes to understand how they need to change – and change them before
outsourcing begins. The priorities for outsourcing may change. You will avoid outsourcing a broken
process be avoided, and expectations for performance can be set out clearly for potential providers. In the
Conference Board’s survey, several companies reported that they had failed to simplify and align their HR
processes, resulting in a longer and more difficult transition phase.

8) Establish expectations up front, and include them in the contract – adopt stringent service level
agreements (SLA’s), that include penalties and rewards. Anything missed out of the contract will not be
provided! Although this may seem obvious, it is easy to overlook spin-offs from major functions that turn
out to be important in their own right. The fact that the HR department produces a league table of sickness
absence by division does not mean that an external provider will automatically do so.

9) Define clear contract management arrangements – companies often underestimate the amount of
attention they will need to devote to managing their relationships with outsource providers and monitoring
the service that they are receiving. Managing multiple outsource providers is particularly challenging.
Pulling together performance metrics from several providers can be a significant burden on internal
resources and is best avoided if possible. The cost of managing the contract must be included in the
business case for outsourcing. Excellent contract negotiation and management capabilities will help to
avoid disappointments.

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10) Build in regular review and adjustment processes – however well defined your SLA’s are at the
outset, they will have to change. The business needs will change, experience will suggest alternative ways
of doing things and the contract must reflect that reality. Make sure that limited adjustments to the
specification do not entail a major renegotiation of the whole contract. A sound, reliable service provider
with real HR expertise (operating as a partner rather than just a supplier) will recognise and accommodate
these requirements.

Perhaps there is one more rule to add – manage expectations. A company cannot transform its HR
function simply by outsourcing. It is not a realistic objective for any single business strategy to achieve.
Outsourcing, when properly handled and successfully completed, can achieve cost reductions, better
services and many other objectives. Companies can then define how the retained HR function can move
on from the transactional functions and deliver genuine strategic value to the business. Removing the
administrative and transactional work from the equation is only one element of a broader objective.

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Why Small to Mid-Sized Organizations Should Consider Outsourcing Benefit Related Aspects of
Human Resources

A wise old adage says; "Concentrate on your strengths and delegate your weaknesses." This concept is
true in sports, business, and virtually all areas of life requiring top performance. A basketball team with a
star shooter will design special plays to get the ball into her hands.

A company with a tremendous product or a unique service will focus company resources to further
develop, promote, and capitalize on its advantages. Perhaps this principal has no greater application than
in the effective management of small to mid-sized organizations (defined as 20 to 3,000 employees). A
major component of effective management is the proper utilization of human resource (HR) personnel.

Full Court Pressure

In basketball, it’s hard to get the ball up the court if the opposing team uses full-court pressure. In
business, external and internal forces represent full-court pressure and these forces are motivating
organizations to look for new and different ways to succeed. First of all, budgets are being stretched more
than ever before.

The cost of doing the business has increased in several other areas as well. For example, businesses are
investing significant sums of money in technology in order to adapt to the information age. The tight labor
market makes attracting and retaining quality employees more difficult than ever. Keener and fiercer
competition in the market place for a firm’s products and/or services also presents a formidable task for
organizations to tap into new sources of revenue.

In addition to these budgetary pressures, most mid-sized organizations are not properly staffed in the
Human Resource area. For instance, the average salary of a professionally educated Human Resource
Directors in the for-profit sector is over $87,000, which makes it difficult for smaller to mid-sized
businesses to afford more qualified HR personnel.
Because of the high cost of highly educated and experienced HR Directors, many organizations are
placing significant demands on a small HR staff.

Yet, these financially challenged executives are responsible for an increasing population of employees.
Unemployment is at the lowest point in nearly thirty years.

With the cost of health care on the rise again how can organizations afford to offer attractive employee
benefits and compete in the job marketplace with the sizable Fortune 1,000 companies? With stretched
organizational budgets, lower pay scales, and a growing number of employees to serve, how do small to
mid-sized companies survive and thrive in new millennium? In an era of increased legislative, regulatory,
and legal pressures, how do human resource departments of small to mid-sized companies achieve
compliance and reduce liability?

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Go To Your Bench

In basketball, when your starting players are exhausted or ineffective the coach will turn to players on the
bench to come in to the game and give the team a lift. Championship teams often have a strong and deep
bench with many talented players that can come into a game to play a specific role. The pressures noted
above are just a few reasons making it more rigorous for small to mid-sized organizations to remain
competitive in today’s workforce and why these organizations are considering outsourcing various aspects
of human resources and employee benefits.

According to Sue Burzawa, Associate Editor of Employee Benefit Plan Review, "Corporate streamlining
and the desire to improve service to employees have prompted human resource departments to seek
administrative solutions that enable them to do more with less."

The main problem with most human resource departments of small to mid-sized organizations is not
enough humans and not enough resources. In other words, HR departments often lack a strong bench.
However, human resource managers are discovering new ways to increase the size, scope, and expertise of
their departments through outsourcing.

Think of a human resource department with a bench of talent in outside consulting or administrative firms
that function as back-up support. On this bench are human resource specialists, attorneys, CPAs, and
additional administrative support personnel. Because these professionals are equipped with the knowledge
and strategies to effectively develop benefit plans and manage HR, they often find sufficient cost savings
to offset their own fees. Thus, HR outsourcing can be very cost effective.

Several key HR functions are currently being outsourced by many organizations. For instance, a recent
survey indicates that 67.9 percent of firms outsourced training, which included needs analysis, program
design, and delivery. Outsourcing of human resource functions often includes the following items:

 benefits planning and administration

 Employee benefits education and communication
 Investment education and financial planning
 Personnel forms and records administration
 Job description and evaluation
 Training needs analysis and program development
 In-house training
 Personnel policies and procedures
 Employee handbooks or manuals
 Performance planning and review
 Wage and salary planning and administration
 Recruitment, selection and hiring of new employees

30
  Terminations, suspensions and disciplinary actions
 Employee opinion surveys
 Affirmative action plans
 Federal and State laws and regulation compliance
 Labor negotiations and contract administration
 Self-directed work teams training and implementation
 Total quality systems
 Fund raising

The Three-Point Specialist off the Bench

In basketball, when a team is down they often turn to a three-point specialist. This player has the ability to
shoot the ball from long-range to score 3-point baskets. Most employee benefit plans are only as valuable
as employees perceive them to be.

Creative and meaningful communication often makes the difference between great and average benefits.
Because effective written material, multi-media, and knowledgeable educators are essential to good
communication, many small to mid-sized organizations are outsourcing the communication aspects of
their benefit plans to communication specialists. These three-point specialists develop powerful group
presentations, written materials and one-on-one custom employee enrollment services.

A growing number of insurance carriers, and other service providers, specialize in Worksite Marketing.
Worksite Marketing in its simplest form consists of an insurance carrier offering voluntary, payroll-
deduction, supplemental benefits.

However, some worksite specialists, like Transamerica Worksite Marketing, not only provide
supplemental insurance products but provide case management services to the employer. Case
management involves the complete coordination of the benefit enrollment of core (group health, life,
dental and long-term disability insurance) and non-core (supplemental) benefits though employee group
presentations and with one-on-one computer enrollment.

Transamerica, for instance, has developed proprietary enrollment software that may be utilized on an
intranet, the Internet or a stand-alone laptop computer to enroll employees in the core and non-core
benefits. At the completion of the enrollment the supplemental insurance data is transmitted electronically
directly to Transamerica and reports are generated for the HR department to use in order establish payroll
deductions and to notify other benefit providers with enrollment data.

Another form of benefit communication is the Benefit Statement. Benefit statements that summarize the
value of each benefit are rapidly growing in popularity. According to Kenneth F. Phillips, President of the
Boston-based Employee Communication Services, "Now we are starting to see employers spending more
money on benefit plans than ever before, but employees still don’t know what kind of money is being
spent on their benefits.

31
As a result, some employers are saying, ‘Let’s do a total compensation statement including what people
earn and what their benefits cost’. Many employers are looking to outside firms to help use the immediacy
of technology to communicate this total compensation message to current and prospective employees."

Do employees really want or need benefit statements? According to a recent U.S. Chamber of Commerce
Study, employers are spending an average of 41.3 percent on top of payroll for benefits. The worst part
about this is that most employees have no idea what their benefits are and how much the company is
paying for these benefits. Employers need to effectively communicate their benefit package. They need
benefit statements to quantify the value of the benefits to each employee.

Energy to Finish the Game Strong

Outsourcing certain human resource functions, including employee benefits, for many small to mid-sized
organizations, may be one of the best ways to leverage the talents, energy, and resources of their internal
staff. According to Tony Martin, a principal with the Kwasha Lipton Group of Coopers and Lybrand,
LLP, "Benefits are important in retaining employees, but they probably are not the principal driver.
Benefits and other administrative functions typically are a noise that keeps people from being able to
focus on more strategic, more highly leveraged activities.

Maybe the human resource people or the senior human resource person can’t get to strategic human
resource issues, because they spend their time putting out fires and responding to administratively-driven
issues. These may be important matters, such as an employee not being able to get medical treatment for a
child because eligibility is fouled up, but from a strategic perspective they are a distraction.

Through reengineering, these administrative tasks not only get done better, but they get segmented and
insourced or outsourced to specialists, and get out of the way of human resource managers." According to
the same study, 65 percent of companies with revenues of less than half a million dollars say they do not
outsource. However, of the group of firms characterized as the fastest growing in the United States, 83
percent do outsource. Perhaps Bill Gates, founder and Chairman of Microsoft Corporation, put it best, "As
technology makes it easier for business to find and collaborate with outside expertise, the very nature of
almost every business organization will have to be reexamined.This should include its structure and
balance between inside full time staff and outside consultants and firms."

Through the proper balance of inside and outside talent small to mid-sized organizations are finding new
ways to focus their organizational energy on the firm’s mission. By outsourcing various human resource
functions, many small to mid-sized companies are discovering new ways to cut cost, attract and retain
quality employees, reduce liability, and gain access to a high level of expertise.

These organizations are also learning that proper outsourcing frees up valuable time and energy for key
personnel. All of these advantages of outsourcing some HR functions serve to recapture much needed
personnel and financial resources, which enable the small to mid-sized firm to play to their strengths and
succeed in the highly competitive ballgame of business.

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PRESENT SCENARIO Of HR OUTSOURCING:

The general opinion among Indian companies is that it is economical to manage all their HR processes
internally. Consequently, there is not much emphasis on outsourcing. Typically, very small companies
(which do not have the competency to staff a full-fledged HR department) and very large companies (who
wish to outsource all routine HR processes so that they can concentrate on core issues), are the ones that
use HR outsourcing in a significant way. Besides, many multinational companies are fast adopting these
practices.

Sateesh R Kurugod, head of marketing and alliances, Crossdomain Solutions says that now CXO’s realise
that HR teams typically spends over 80 percent of its time in managing tactical and transaction oriented
HR operations.

“If these tactical processes are outsourced, the company could re-deploy their trained HR resources to core
processes,” he adds. Pramode Sadarjoshi, the director and head of Human Resources of Cognizant
Technologies says, “Today, every organisation is aiming at achieving productivity by enhancing return on
investments and achieving the economies of scale. In this context, it makes business sense to focus only
on the organisation’s core competencies and outsource non-critical business activities. Therefore, routine
administrative tasks, although important, can be outsourced to third party vendors.”

Growing importance

Things are however expected to change with many mid-sized companies looking at HR outsourcing.
Research proves that the market for HR outsourcing in the APAC region could grow from $1.14 billion in
1999 to $2.56 billion in 2004. Although it is not a very huge growth, it has still shown an upward trend.

Some of the key companies which have gone ahead for manpower hiring outsourcing practices are Cisco,
GE, Honeywell, Sun, i2, LG Soft India, Escosoft and Legato Systems. While LG Soft India has
outsourced its PF management, Escosoft has outsourced payroll processing, execution of training
programmes and survey conduction. According to Shubho Kundu-senior general manager HR of LG Soft
India, the company has been able to save a lot in terms of reducing paperwork and interaction with
government agencies.

Besides, there are other companies like Xansa India, which is planning to take a plunge in HR outsourcing
business and offer services to its parent organisation. Binnoo Wadhwa, the head of HR for Xansa India,
says that the move showcases the robustness of the HR department to handle such critical applications.

There are many others who do not believe that HR outsourcing is necessary. Take the case of Aptech,
which has not considered HR outsourcing as the company feels that HRD is strategically linked to its
business. “In my view any job or function, which is of strategic importance to the organisation should not
be left for outsiders or the so-called outsourcing partners,” he says.

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The deterrents

The basic reasons hampering the growth of HR outsourcing in India are confidentiality and cost factors.
Many companies outsource only a bit of their requirements because of the above two factors. Besides, the
fear of losing jobs, losing control over confidential data, ethics and quality of outsourcing vendors,
security breaches and overall confidence in the vendor deters many organisations.

Says V. Kartikeyan, the director-human resources of Texas Instruments India, “Some companies can also
be reluctant because they may not have an adequate grip over the cost-benefit equation of outsourcing.
Companies need to be convinced before they can outsource select HR activities.”

Adding to this are issues like cultural mindset and psychological acceptance. An in-house HR person
handles certain situations that an outsourcing agency cannot handle well (things like building employee
incentive programmes, taking care of recognition for employees).

At times, many employees would want someone in-house to resolve their work-related problems or
disputes. All this is only possible if there is an in-house HR team, which interacts with the employees on a
daily basis. Vinod Malhotra, head of human resource, Escosoft Technologies, points out that most Indian
companies have not psychologically reached the stage of “fully” outsourcing the HR processes. “I think
the industry is focused on outsourcing back office processing (BOP) and not business processes (BPO),”
he adds.

Quality at times forms another roadblock. According to Sadarjoshi, most companies are not sure about the
end result, which they will receive from their vendors. Then there are also issues in terms of pricing of
outsourcing HR services. Says PK Gupta, director of strategic development-intercontinental operations,
Legato Systems, “There are no standard benchmarks available so pricing varies a lot from vendor to
vendor for similar services. Doing reference check helps a lot in this case. What customers feel is that they
are not getting value for their money.”

Experts believe that in present times HR outsourcing is undergoing a transition phase. It is moving out
from the realm of bigger companies to small and mid-sized organisations. There has also been a transition
in its user acceptance, where it is moving from a corporate domain to PSUs and the Government sector.
All this reflects on the growth of this sector. However, it would still be some time before we see increased
levels of HR activities being outsourced.

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HR: do your outsourcing homework

Before taking the plunge into outsourcing HR organisations should:

• Take a comprehensive view of current costs and associated service-level abilities

• Consider current ability to manage the process in-house, as well as to manage a relationship with
external service providers

• Evaluate how strategic each process is and how integrated it is with other support services

• Research all available options in the marketplace (and take note of the level of stability)

• Decide if it’s appropriate to outsource an entire category of processes, a single process or even a piece of
a process.

HR Outsourcing Industry Statistics :

Forecasted Company Expenditures on HR Outsourcing

 Yankee Group predicts the total worldwide expenditure for HR outsourcing services
(including multipurpose HR business process outsourcing, HR consulting and HR volume processing)
to reach $52 billion this year, increasing at a compound annual growth rate of 10 percent to reach $74
billion by 2009. (Yankee Group, 2005)

 HR BPO expenditure represents $4.6 billion of the total HR outsourcing services expenditure this
year. HR BPO expenditure is predicted to reach $14 billion by 2009. (Yankee Group, 2005)

 North America represents the largest percentage of HR BPO services spending worldwide at $3.6
billion of the total expenditure this year. Yankee Group forecasts it will increase to $11.5 billion by
2009. (Yankee Group, 2005)

 IDC reported that the market for HR services (including HR processing, HR consulting and HR
BPO) grew to $71.9 billion worldwide in 2004, an increase of more than 8.2% over 2003. In the
United States, HR services grew 8.5% to $36.7 billion.

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Benefits of HR Outsourcing

 The most commonly cited reasons organizations outsource HR activities are: gaining access to outside
expertise (93%), improving service quality (85%), a desire to focus on their core business (73%) and
the opportunity to recognize cost savings (72%).

 The most frequently outsourced HR functions today include outplacement services, employee
assistance programs, 401(k) plans, COBRA administration, and pension plans. By 2008, companies
expect to expand outsourcing in the following areas: leave management, learning and development,
payroll, recruiting, health and welfare, and global mobility.

 Some companies have achieved unexpected benefits from HR outsourcing including: substantial
increase in process efficiency in non-HR areas, greater discipline in demand prioritization and cost
control, more disciplined planning, more cost saving than expected, greater employee awareness of the
outsourced benefit plan, and higher levels of employee savings in the outsourced plan.

 Reduced costs
 Improved service delivery;
 The ability to focus on core business; and
 An opportunity to leverage expertise not available internally.

There are five main factors leading to outsourcing :

 downsizing,
 rapid growth or decline,
 globalization,
 increased competition
 restructuring.

Downsizing that has traditionally been the role of HR department has now attacked HR itself because
companies are being forced to cut costs from any possible domain, and effective HRM
outsourcing can be a major driver in cost cutting.

The rise of the professional employee organizations (PEO) reflects the demise of the once humanistic HR
department! Companies having global operations are resorting to outsourcing because large vendors offer
specialized services to harmonise pay and benefit packages, and to comply with local laws of the country,
which are imperative to be followed.

Outsourcing firms are perceived to be more objective in evaluating training programs, and they enjoy
more credibility with the senior management for evaluations and research. HR executives have to make
informed business decisions on both operational and strategic issues.

Outsourcing again wins this game by implementing fully integrated Human Resource Information
Systems (HRIS), thereby enabling the company to derive the benefits of

36
technology without purchasing it. Is outsourcing all about cost cutting ? A very important benefit of HR
outsourcing can be understood from the phrase "the freedom to focus". Outsourcing makes more man-
hours available to concentrate on core business objectives rather than on administration activities such as
payroll.

Companies also reduce bureaucracy by capitalizing on the efficient, quick and prompt services of
outsourcing firms. Search firms are in a better position to find the right candidate and conduct benefit
negotiations with them. They respond by integrating technology, data, and measurement to enable the
optimal management of HR as a business.

However, a random decision to go for outsourcing can have major negativeramifications for a company.
For example, if the objective of outsourcing has been only cost cutting, companies may face loss due to
poor service quality by the vendor, the loss of HR skills and competencies, and the lack of customer focus
by the people working for the vendor.

The loss of HR skills and competencies may lead to reduction in the organisation's learning capability.
Management should be fully alert to the fact that the decision to go for outsourcing will most likely create
internal conflicts in the HR team and may also lead to disruption of the work culture. This is because the
motivation and morale of the employees is damaged as jobs appear to be lost. Irrespective of whether the
staff remains in the organization or is hired by the agency, the employees may start feeling more insecure.

So, the decision to go for outsourcing should be taken after due analysis of the pros and cons associated
with it. The management should have a clear vision of what outsourcing should achieve, and the scope of
services to be outsourced. The costs associated with switching over to a different vendor are huge.

So, in order to achieve the desired performance from the vendor, it is highly imperative that the
expectations and performance standards are made clear beforehand so that there is no room for conflict at
a later stage. The outsourcing firm should be selected after thorough evaluation and proper due diligence.
In addition to this, vendor performance should be evaluated on the basis of performance standards and
internal customer surveys. HR outsourcing was once the realm of only 25% of the global firms.

But now, even smaller firms are seeking ways to cut costs and focus on the core business. According to
IDC, worldwide HR spending will experience a CAGR of 9.6% through 2009 to reach $113.4 billion, as
compared to $71.9 billion in 2004. HR BPO is the fastest growing segment of HR services, and is
expected to grow at a CAGR of 16.1% to reach over $16 billion in the US by 2009.

The use of HR BPO as a strategic management tool is being emphasized more and more. It is particularly
well-suited to companies facing significant competitive and cost pressures. Today, it is a proven fact that
companies can reduce administrative costs, bring about greater productivity, and enable faster
responsiveness to business changes by outsourcing their greatest resource !

Achieving the Desired State

37
After successfully making the business case for outsourcing, companies need to set clear expectations for
the outsourcing process, especially in the following areas:

 Quality of service delivery;

 Direct/indirect impact on employees; and

 The provider's ability to handle the complexity of the organization.

By outsourcing administrative services to a provider whose primary business is delivering such services,
in-house HR professionals will be free to pursue more strategic HR functions, or what is commonly
referred to as "focusing on the core."

According to one survey respondent, "Outsourcing has reduced the time we [HR professionals] have to
spend on transactional activities so we can focus on the value-added responsibilities of HR." As HR
professionals spend less time on transactional work and more time making strategic contributions, the
visibility and value of HR as a whole will increase.

Management Trends in Outsourcing

Harvard Business Review has identified outsourcing as one of the most important management ideas and
practices of the past 75 years.

Spending by U.S. organizations on outsourced business services will triple from $100 billion in 1996 to
$318 billion by 2001.
Studies indicate that outsourcing is increasingly viewed positively by executives and top management
alike, at both US and multinational companies.

According to a research conducted this year with more than 500 executives found that:

One in four organizations plan to increase their outsourcing spending by 25% or more in 1999.
By the end of 2000 outsourcing will represent 19.5% of the typical executive's budget, up from 16.4%
today.
Firms in dynamic markets such as telecommunications, high-tech products, and professional services,
already source more than 40% of their operations outside.
Innovation is now seen as the key strategic benefit of outsourcing.

Top US companies are turning to business process outsourcing, according to a study released by
PricewaterhouseCoopers, based on interviews with senior executives at more than 100 U.S. companies
averaging about $4.4 billion in yearly revenue.

HUMAN RESOURCE MANAGEMENT OUTSOURCING: THE MAKE OR BUY DECISION

38
Just-in-time human resource management, sell and lease back human resource (HR) programs, and do-it-
yourself HR -- all of these phrases characterize how some companies manage outsourced HR functions.
We found that companies use HR outsourcing for both operational and strategic reasons.

Intensive interviews with senior HR executives and professionals in 25 organizations were conducted to
identify outsourcing rationales and consequences. As a result of interviews several guidelines haveben
developed for selecting vendors, managing the outsourcing transition, managing vendor relations, and
monitoring vendor performance. HR outsourcing is not a fad and it can enhance the HR value chain as
well as support the development of HR as a business partner and strategic contributor to the organization’s
goals.

DO THE PEOPLE MAKE THE PLACE?

THE MAKE OR BUY DECISION OF HUMAN RESOURCE OUTSOURCING

THE TREND TOWARD OUTSOURCING

Does outsourcing of human resource (HR) activities spell doom for the HR department? Is this
phenomenon a short-term response to the corporate downsizing of the 1990’s? Are senior HR executives
supporting or resisting outsourcing pressures from their executive teams? The answers to these questions
and others regarding the role of HR outsourcing depends in large part on how senior HR executives view
the roles of their HR function.

To address these questions, we studied outsourcing by conducting intensive interviews of 26 senior HR

executives, other executives, and professionals having experience with outsourcing from 25 different
organizations.1 Many of the larger companies are industry leaders; seven are ranked in the top half of their
specific industries in Fortune’s list of America’s most admired companies.2

HR executives view the process of outsourcing differently than the processes of purchasing, procurement,
and subcontracting. In their view, outsourcing occurs when a company contracts with a vendor to perform
an activity that it previously performed. In contrast, procurement generally means that the company has
not performed the activity before.

Outsourcing also has a temporal dimension -- some executives view outsourcing as permanent, whereas
subcontracting is temporary. Thus, a subcontracted activity is expected to return to the company at some
point. Here we refer to outsourcing as the performance, by outside parties on a recurring basis, of HR
tasks that would otherwise be performed in-house.

The market for providers of outsourced services of all types is growing rapidly. In 1996 American firms
spent over $100 billion outsourcing business activities. Globally, outsourcing usage grew by 35% for the
12 months ending in June 1997. Furthermore, the total market for outsourced services is expected to
increase to $200 billion by the year 2000.

Moreover, a 1996 Hewitt Associates survey of large employers found that 93 percent of respondents
outsourced some of their HR functions. Similarly, an American Management Association survey found

39
that 77% of surveyed firms in 1996 outsourced some of their HR activities, up from 60% in 1994. The
1997 Survey of Human Resource Trends of 1,700 organizations reported that 53% plan to outsource more
in the future.3 HR departments are facing the classic make-or-buy decisions that other functional areas
confront when considering the outsourcing of services or products.

From our review of the outsourcing literature and interviews with HR professionals, we identified five
competitive forces that are driving more companies to outsource some or all of their HR activities. These
forces are: downsizing, rapid growth (or decline), globalization, increased competition, and restructuring.
Over the past decade these forces have significantly altered the strategy and structure of many firms.
During this time firms have attempted to refocus their businesses, lower their costs while increasing
service, and improve capabilities to respond to future business challenges.

For the HR executive, the imperatives are similar. By refocusing the HR function, executives hope to
achieve a closer alignment of HR practices with business strategy. HR managers, in turn, have been
admonished to partner with line managers to deliver more value added services at a lower cost. In
addition, HR executives feel more pressure today to improve their service response time for internal and
external customers.

In the words of professor and consultant, Dave Ulrich, the world of HR has evolved to producing
"deliverables", in addition to "doables."4 Consequently, HR tasks, functions, and entire departments are
being reexamined to see if, in fact, some HR activities are needed, and if so, who can best provide these
services.

Of the five forces, downsizing has dominated HR thinking for the past decade. Downsizing-the intentional
reduction of employee headcount-shows some signs of diminishing from a high of 75% of firms reporting
downsizing in 1990 compared to 56% in 1993.

Along with the pressures of downsizing, many firms have undergone changes related to restructuring,
mergers, and acquisitions. Retrenched firms or those in decline face incredible pressures to reduce costs,
while high growth firms face similar pressures to monitor costs. HR outsourcing presents the option of
cost reduction and the choice to hold or release control of selected HR activities. The choice depends on
whether an activity is deemed a core competency within the HR department.

The global imperative for outsourcing accelerates as firms evolve from sellers of products and services
abroad to setting up operations in foreign countries and staffing those operations with host country or third
party nationals. Several HR executives in our study described needs related to moving a global workforce
across geographical boundaries. Harmonizing pay and benefit packages as well as complying with local
laws demands specialized expertise. Larger vendors that focus on compensation and benefits offer these
specialized services and deliver expertise built on years of experience and concentration in particular
regions of the world.

40
Increased competition, both domestic and international, emphasizes the value-added role of products and
services. Firms that subscribe to the Balanced Scorecard approach of measuring effectiveness not only
look at financial measures of firm success but also customer and employee measures of service quality.6
General Electric CEO, Jack Welch, captures best the Balanced Scorecard approach to measuring business
effectiveness. He states that he pays attention to only three measures of firm effectiveness -- cash flow,
customer satisfaction, and employee satisfaction.

If HR departments are to be responsive to both internal and external customers, they must look for ways
to improve the quality and responsiveness of their services. Proponents argue that outsourcing offers HR
an option to satisfy competing demands for improved service and responsiveness at a reasonable cost.

Strategically, outsourcing provides HR departments with a tool for producing competitive advantage for
the firm. Outsourcing for the sake of outsourcing or imitation of competitors offers no basis for
sustainable competitive advantage. Operationally, many firms are pursuing the low hanging fruit through
the choice, for example, of outsourcing benefits administration with a vendor that provides the latest in
automated technology. All firms have access to these vendors, hence no firm achieves any discernible
advantage over others.

To the extent that outsourcing decisions are a part of a larger plan to restructure the HR department,
refocus activities, and/or re-deploy HR resources; then competitive advantage is attainable. Such is the
example when firms redeploy HR generalists via reorganization to serve key divisions or business units of
the organization. Such redeployment can transform the organizational culture of HR to more of a service
role, which in turn serves as a source of competitive advantage for the firm.

Such new, service-quality cultures are not easy to build and sustain, particularly among established,
traditional, or entrenched HR departments. Strategically, HR outsourcing decisions potentially can be a
part of a larger pattern of responses designed to deliver unique, hard to imitate, hard to substitute, value-
added services that enhance the value and quality of the firm’s products and services

In our study of HR outsourcing, we seek to understand three critical issues. First, why are companies
choosing to buy rather than make some or all of their HR activities? Second, what are the positive or
negative, intended or unintended consequences of outsourcing these HR tasks, functions, or entire
departments? And finally, what can we learn about best practices for managing HR outsourcing? We turn
now to both the operational and strategic rationales given by our interview respondents for outsourcing
their HR activities.

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OPERATIONAL RATIONALES FOR OUTSOURCING

Stage of Evolution of the HR Function

HR outsourcing is sometimes driven by the evolution of the HR function within the organization. We
found very extensive outsourcing in some young or small companies where the HR function was relatively
undeveloped or was being restructured. Here, HR activities were essentially confined to the administration
of compensation and benefits, record keeping, and applicant screening. Extensive outsourcing was used to
quickly fill voids in critical HR capabilities by purchasing services from outside the organization. In such
circumstances outsourcing has the critical advantage of providing HR capabilities while not adding to HR
headcount. HR outsourcing allows the company to do more without additional staff or with fewer staff.
Some companies with highly developed HR functions have outsourced the entire HR function

Need for Specialized Expertise

As one highly respected senior HR executive stated, "You outsource when someone else can perform the
activity better than you." Another said that companies should make outsourcing decisions by asking,
"What is it we will never be experts at or shouldn’t spend time doing?" These statements are consistent
with the results of a recent survey that identified vendor expertise, along with time savings, as the most
frequently cited rationales for outsourcing HR activities.

The demand for specialized expertise is not surprising given the growth in the complexity of HR tasks and
fewer on-staff HR specialists due to organizational downsizing. HR specialists, many in their 40s or 50s
with relatively high salaries, become tempting targets for cost cutting and have often been downsized or
offered options for early retirements.12 For some companies exposed to repeated downsizings, their
staffing functions have been dismantled and requisite expertise has been lost.

As companies require more specialized HR expertise, their next best alternative is to hire external HR
vendors to perform activities that were formerly performed in-house. In addition, some executives we
interviewed argued that in tight markets for HR services, such as for specialty searches or recruiting, they
cannot permanently employ the best specialists. These specialists, such as executive search experts, can
earn more by operating their own search firms.

In addition to expertise, outside vendors can also be more objective than internal staff members. For
example, companies hire outsourcing firms to conduct training program evaluations. Furthermore, when
the HR function lacks credibility with the company’s senior management, evaluations or research
performed by outside vendors provides needed credibility because of perceived expertise and objectivity.

42
Time Pressures

HR outsourcing enables HR executives to cope with time senistive and competing demands. One HR
executive outsourced recruiting when the company had 50 openings and he did not have time to hire
and/or train a recruiter. The training function provides another example in which time pressures often do
not allow internal development of trainers or program design. Vendors can supply generic programs that
can be customized and delivered quickly, such as diversity training.

Cost Savings

The expected cost savings was an initial rationale for outsourcing. Such cost reduction rationales are
consistent with the strategic management view of competitive resource allocation. Hence, all activities,
except for those related to strategic core competencies, should be outsourced if vendors can perform them
more economically. The conventional wisdom is that economies of scale allow specialized vendors to
provide services at lower costs.The fees charged by vendors has decreased because of increasing
economies of scale.

In contrast to the conventional wisdom about cost savings, a recent study of information technology found
that efficient vendor management practices drive costs down more than economies of scale.15 As noted
earlier, several HR executives from large companies reported that because of the magnitude of their
internal HR operations, specialized vendors were unable to achieve greater economies of scale and cost
savings. One interviewee observed that outsourcing produces no cost savings when only two or three
vendors dominate a specialized market. As noted cost savings are often an important rationale for
outsourcing, but as another interviewee warned, "Don’t let cost be the absolute driver!"

On the other hand, for other HR functions some executives held a very different opinion about the level of
service available through outsourcing. Several executives claimed that better service could not be obtained
with most outsourced services. Moreover, these executives argued that the pursuit of cost savings often
resulted in the loss of service quality.

Reduction of Liability or Risk

In some instances risk reduction is a partial rationale for outsourcing an HR activity. Liability and risk
reduction is critical for smaller companies that do not have the resources to employ staff specialists who
are fully informed on all aspects of, say, the legal requirements of HR programs.

Smaller companies sometimes seek a greater comfort level by outsourcing the administration of their
entire retirement program. Similarly, employee assistance programs (EAPs) provide another example of
activities that are frequently outsourced regardless of company size. One reason EAPs are being
outsourced is to reduce legal liability associated with the divulgence of confidential information. In
addition, drug testing is often outsourced to reduce legal liability.

43
STRATEGIC RATIONALES FOR OUTSOURCING

Strategic Focus

HR departments often lack a clear strategic focus because they are preoccupied with operational activities.
In essence, several interviewees believed that HR departments should outsource many of their non-
strategic activities. Outsourcing permits HR departments to move away from these routine administrative
elements toward a more strategic role. A succinct summary of this rationale was voiced by one HR
executive, "I like doing the value-added strategic aspects of my job, not the administrative, paper-pushing
pieces." Although outsourcing can be used to sharpen the strategic focus of HR, it is but one component of
the strategic transformation process.

One senior vice president for HR provided perspective by advising that, "It is difficult to change your role
to strategic by dumping activities via outsourcing. It is easier if you are already in the strategic role."
Numerous executives noted how their goals were to shift more of the HR responsibilities to the line
managers and to transform the HR staff to an internal consultant role.

By considering any aspect of the "old" HR function as a candidate for outsourcing, the executives were
explicitly redefining the roles of their HR staffs. As another HR executive stated, HR departments are
more likely to "stick to their knitting" when they perform only those activities related to the
implementation of their companies’ strategies rather than less essential functions.

Decentralized Structure

HR outsourcing is associated with decentrialized or matrix structures and extensive internal networking.
We found one of the highest levels of HR outsourcing in a significantly matrixed organization operating
the dynamic telecommunications industry. The company, which relies heavily on internal networking and
de-emphasized departmental barriers, has a very informal culture with a heavy emphasis on flexibility.
The combination of a decentralized structure, lean staffing, and an informal, fast-paced culture appears to
be consistent with its outsourcing arrangements.

Interestingly, the HR executive at this company explained that, except for benefits and compensation
outsourcing, she does not sign contracts with her HR outsourcing vendors but instead, relies on trust in
established relationships. In addition to heavy reliance on outsourcing in its U.S. operations, her company
uses vendors that operate internationally to supply the same service to its operations throughout the world.

Decentralization of the HR function through redeployment of some of its assets to operating units is
another strategic rationale for outsourcing. By outsourcing specialized services, the HR function can re-
deploy HR expertise from the corporate level to provide HR services at the operational level. Such
generalists help operating managers access HR services, including those provided by vendor specialists.

44
One senior HR executive emphasized using HR generalists who know the business to manage outsourcing
relationships because they enhance the perception and reality of HR as a true business partner. Another
HR executive put it this way: "HR generalists view their role differently when they sit in the decision
maker’s chair instead of the chair next to it!" For these generalists, knowing where to get a problem solved
is more important than having specialized HR knowledge for each problem confronted.

Reduction of Bureaucracy and Culture Change

HR departments are often criticized for their bureaucratic processes and the constraints they impose on
operational flexibility.19 Thus, an important rationale for outsourcing is to develop a less bureaucratic HR
function. As one interviewee stated, successful outsourcing vendors emphasize a customer-service
orientation that, in turn, permits the HR executive to address, with reduced HR headcount, only the most
extreme cases that need his or her attention. In addition, outsourcing replaces bureaucracy with market
forces. As one senior vice president stated, outsourcing allows us to "harness the power of the bidding
process." Similarly, because of their size and focus, outsourcing firms are often more nimble and agile. As
a result, they can often deliver services more quickly than in-house HR staff.

Internal Politics

In addition to the benefits of cost savings and greater control over headcount that HR outsourcing can
potentially provide, political considerations drive outsourcing decisions. Downsizing has frequently
required HR departments to share the pain of widespread organizational restructuring by reducing their
staff headcount. One HR executive stated that outsourcing and the associated reductions in headcount
allowed his "HR function to look less bloated and more like a real business partner."

Under such circumstances maintaining specialized, in-house expertise is nearly impossible. One
interviewee claimed that his medium-sized company obtained better HR staff utilization and flexibility by
employing only HR generalists rather than specialists. For specialized HR services he relied on vendors.
Even some of the largest companies made similar arguments for their preference for HR generalists.

Despite the outcry by HR professionals, headcount reduction is often an important consideration for
companies early in the evolutionary phase when upper management is skeptical about the value of a more
comprehensive HR function.20 Because less developed HR functions are often associated with smaller
company size, economy of scale effects from in-house HR activities are virtually impossible for smaller
companies to achieve.

Finally, one interviewee argued that an unspoken rationale for outsourcing is that when performance is
unsatisfactory, the HR executive has an "out" that is not available when the activity is performed in-house.
Sometimes, the HR executive can reduce personal risk, at least in the short run, by outsourcing a
troublesome activity. If difficulties persist, blame can be placed with the vendor who then can be replaced.

45
Management and Organizational Development

As one HR executive wryly suggested, "outsourcing is the antidote to inward thinking!" Another
interviewee found that HR outsourcing stimulated his thought processes and kept his thinking up-to-date.
Because consultants have current and specialized information, they could accelerate his progress down the
learning curve. Outsourcing provides a big picture perspective as one HR executive exclaimed because
"sometimes I can’t see the forest for the trees."

Another senior HR executive compared the use of HR outsourcing as a form of organizational genetics
such that the use of vendors improves the HR gene pool and produces new capabilities and out-of-the box
thinking. Additionally, a senior executive said that for executive compensation analysis, he uses an
alternating outsourcing and insourcing approach to enhance organizational learning.

After a year in which he outsources the activity to learn the latest techniques, he then insources it the next
year for cost savings, and then outsources again the next year to learn again. On the other hand, when HR
activities are outsourced, fewer career development opportunities exist for the HR staff. When only a
limited number of activities are performed in-house, broad or general HR experience is more difficult to
obtain.

Having described the operational and strategic rationales underlying HR outsourcing decisions, we turn
now to positive and negative outcomes associated with HR outsourcing.

OUTSOURCING OUTCOMES

From our interviews, we learned that most good reasons cited for outsourcing translated into advantages
and benefits once outsourcing began and remained in effect for an extended period of time. On the
positive side several HR executives mentioned that lower HR costs were achieved, along with higher
service quality and enhanced HR focus on those areas that directly contributed to firm success. Several
benefits from outsourcing were by-products or unintended gains.

These included realignment or redeployment of internal HR expertise, development of negotiation and

broker skills, and enhanced credibility of the HR function. In addition, risk and uncertainty absorption by
the HR vendor is another benefit, especially with rapid changes in technology or regulatory issues.

One interviewee suggested that the use of HR outsourcing is a way to "syndicate the risk" when the
organization cannot stay current on all the new developments in the HR field. One measure of satisfaction
with outsourcing was reflected in the comments of a senior HR executive who views any area of HR as an
outsourcing opportunity and who exclaimed that "my replacement will tell me that my job is too easy!"

However, some outsourcing experiences were not positive, or as one interviewee stated, "outsourcing is
not the silver bullet." As noted earlier, some HR executives found that outsourcing does not always
produce significant cost savings and in one case, costs actually increased.

46
When HR vendor service quality is unsatisfactory, vendor switching costs and long term vendor contracts
act as barriers to immediate remedies for improvement. One interviewee cautioned that when the primary
motivation for outsourcing is cost reduction instead of superior service at a reasonable cost, "senior
management often gets what it pays for!" Outsourcing can disrupt the firm’s culture if the vendor becomes
a noticeable third party instead of a seamless extension of the HR function.

In addition, the HR department's loss of internal HR specialty skills or competencies can produce
excessive reliance or dependence on the vendor. Many interviewees cautioned against outsourcing
activities that remove or distance the HR function from employees. Another interviewee observed that
when HR vendor relations go sour, in many instances the people working for the vendor lack critical
expertise, a customer-service focus, or fail to take the interests of their client into account when delivering
their services.

On balance, virtually all of the HR executives we interviewed expressed satisfaction with their
outsourcing arrangements because the benefits outweighed the costs and produced a more robust HR
function. Based on their evaluative comments we have developed a set of guidelines for improving the
odds of successful HR outsourcing.

Making the Outsourcing Decision

Except for core competencies (such as employee relations or performance appraisal), few HR activities
should be considered as sacred cows not subject to outsourcing. Immunity from outsourcing should result
only from a determination that the company’s competitive position will be compromised by a loss of
specialized expertise. HR executives need also to determine whether their desire to outsource an activity is
driven by its low contribution to core competencies, influences from the external environment, or poor
management of the activity. In the latter case poor management will likely impair management of the
outsourcing relationship.

When there is insufficient focus on the retention of HR activities supporting core competencies,
unintended consequences abound. One such consequence is HR anorexia. That is, key HR activities are
"hollowed out" of the old HR department resulting in lost capability and diminished customer service
quality. One highly regarded HR executive told us that outsourcing is a "truth serum for what is going on
in HR" and its potential role in providing competitive advantage.

As a result of the downsizing-induced malaise affecting some companies, HR executives are making the
mistake of outsourcing key activities. Several HR executives identified core areas that should not be
outsourced.

47
Our interviewees were unanimous in their advice not to outsource core competencies such as labor
relations, employee relations, or performance management functions. Because effectiveness in these
functions requires consistency, trust, an understanding of long-term effects in relationships, and control of
confidential information, their exclusion from outsourcing is understandable.

One interviewee told us that his company keeps the people-to-people activities in-house because they
want "someone from the company who can do something about the problem" and that "we can’t outsource
the mechanism [employee relations] that communicates [to employees] that we care about them." In
addition, although fewer interviewees agreed, many would not outsource compensation or training design.

Thus, we found that HR departments run the risk of losing their identity within the company with extreme
levels of outsourcing. Accordingly, a balanced or intermediate mixture of outsourcing and in-house
activities seems optimal in many circumstances.The need to preserve confidentiality and an appropriate
amount of control are important considerations, particularly for activities involving sensitive information.
For example, in executive search some companies outsource only the research needed to identify names of
potential candidates.

After the vendor supplies the names, the company then performs the remainder of the recruitment activity.
Similarly, although many companies outsource wage and salary surveys or job evaluations, they often
retain wage and salary adjustments, performance-based pay incentives, or other sensitive aspects of
compensation in-house. In other instances secrecy involves national defense, such as a defense contractor
not outsourcing some selection activities because staffing specialists require security clearances.

Nonetheless, in some cases the pressure to produce cost savings appears to override important sensitivity
considerations. For example, even sensitive functions such as EAPs are frequently outsourced primarily
because of cost pressures, although reduction in risk and legal liability are also a rationale.

When making decisions to outsource HR activities, executives need to recognize that performance is
typically the most important consideration. One interviewee noted the importance of the service quality
his staff provides and the direct impact on his own job security. "If I don’t support the organization, I’ll
get in trouble quickly. This may be more important than headcount or budget." The president of an HR
service firm mentioned that when an executive comes to him seeking cost savings, he tells the executive
that his is not the right firm for the job. Problems can thus result from a shortsighted emphasis on cost
savings.

Conceivably, long-run cost savings will not be realized with such outsourcing if employees lose
confidence in vendor services. When some vendors supply "off-the-shelf" solutions, performance can
suffer because the services do not fit the company’s needs as well as custom-designed programs.

48
Service quality is particularly important in situations where HR services are provided for highly skilled or
educated employees who are in great demand. We found such an example in a pharmaceutical company
that went to great lengths to attract and retain a highly educated workforce. This company rejected most
outsourcing alternatives and any potential associated savings.

The company’s executives felt that retention of world class talent required pampering through
personalized service and error-free administration of its generous benefit package. They also felt that
outsourcing would be inconsistent with their red carpet treatment of employees and the company’s culture.
Furthermore, HR executives might lose direct feedback on the quality of benefit services. In a few small to
medium-sized companies we found only limited outsourcing while some customer-intensive HR activities
in the benefits areas were retained to preserve cultures focusing on employee welfare.

HR executives must also exercise caution when outsourcing, to avoid becoming overly dependent on
vendors for essential personnel services that cannot be performed competently by other vendors.
Conceivably, competitors could pirate the services of a vendor to place a company at a disadvantage.
Another potential consequence of reliance on a single vendor is that learning potentially accrues to the
vendor -- not the client organization. Thus, the organizational learning cannot be captured and adapted
into other organizational capabilities.

Selecting and Negotiating with Outsourcing Vendors

Decision-makers should be very careful in selecting vendors. One HR executive suggested that when
reviewing HR vendors, it was important to "treat the selection of the HR vendor as you would when
conducting due diligence during a planned acquisition." He also told us that his selection criteria included
a high criterion weighting for vendors’ knowledge of the industry because HR practices differ across
industries and that one should also perform reference checks.

Even when a large outsourcing firm has a good overall reputation, there is no guarantee that its specialty
areas are of uniformly high quality. HR executives must also understand the costs involved in switching
vendors for outsourced services. For some activities high switching costs can lead to weak power bases in
subsequent negotiations with vendors. Furthermore, firms frequently enter into bad contracts with vendors
and then find the termination of the agreement extremely difficult.

49
Managing the Outsourcing Transition

HR outsourcing fundamentally entails change and the inevitable resistance to change that follows.
Therefore, HR executives must be prepared to manage resistance mounted by the internal HR team,
especially specialists in functions retained within the company since they, more so than HR generalists,
may perceive only limited opportunities for upward mobility.

HR executives need also to be aware of the impact of outsourcing on the HR staff’s sense of job security,
loyalty, and organizational commitment. As with any organizational function, loss of job security and
loyalty among HR staffers can lead to decreased productivity and a host of other dysfunctional actions and
severe consequences for the organization.

Companies contemplating an outsourcing relationship should anticipate conflict with the vendor and
develop a plan for its resolution. One interviewee who provides legal services to corporate clients cited
that legal problems often arise when vendor services go awry for two reasons: a lack of vendor
competency and the failure of the vendor to represent fully the interests of the client.

Another HR executive warned that hasty outsourcing arrangements usually produce unsatisfactory results.
Thus, it is important to set clear expectations at the outset to create safeguards for the company. Such
safeguards should permit a termination of the vendor contract for noncompliance. Moreover, clarifying
expectations at the outset can produce a healthy vendor/company alliance in which each party has the
motivation to work through problems. Nonetheless, terminating vendor contracts is not easy because
replacement vendors are often unavailable on short notice, nor is bringing the service in-house always
feasible in the short run.

On the other hand, problems sometimes arise when the service performed by the vendor is good. For
example, when the vendor’s employees perform excellent services in-house, an incentive develops to buy
out the vendor’s operations. Specifying the conditions for such a buy out before the service is initiated
eliminates such problems.

Managing Vendor Relationships

HR executives should be prepared to develop long-term relationships with outsourcing vendors where
continuity is critical, such as with actuarial firms and search firms. For example, in the case of executive
search firms, one interviewee stated that a long-term relationship is conducive to the vendor learning the
company’s culture to achieve better employee-organization fit. Another example involves competitive
intelligence.

If competitive intelligence has been obtained ethically as a byproduct of the in-house search process,
alternative intelligence sources must be established when search activities are outsourced. To the extent
that long-term relationships exist and conflicts of interest are avoided for the contracting search firm, there
may be a willingness to allow some capturing of intelligence.

50
Moreover, some vendors supply competitive intelligence as part of their normal services. On the other
hand, some companies require their vendors to sign non-disclosure agreements that prevent them from
revealing such information.

Nonetheless, even long-term vendors must understand that work is awarded on the basis of performance,
not relationships. One interviewee made the comparison of HR vendors to at-will employees as a reminder
that no vendor should ever believe that it has a non-expiring contract. Yet this same executive cited one
vendor with whom the firm had a 12-year relationship due to consistently high quality service.

Another HR executive cautioned to avoid the "wine and dine" syndrome and choose vendors that deliver
the right service at the right price. While firms need some special long-term relationships, these are not
required for all activities. We were advised that HR executives should require competitive bidding for
each outsourced service at regular time intervals, such as every three years.

Outsourcing requires that companies develop managers of vendor relationships. We found that companies
can have hidden negotiation and broker talent for managing outsourcing relationships, even one or two
levels below vice president. On the other hand, such talent does not always exist.

In such cases, HR executives should assign capable HR staff members, who need to learn negotiating
skills, to experienced sales people or engineering managers who perform these activities on a regular
basis. Several HR executives suggested that they learned how to outsource by "jumping into the hip
pockets" of line managers who had experience in outsourcing some of their own activities. In addition,
maintaining stability of the in-house staff overseeing vendor relationships is important because they best
understand the performance expectations originally negotiated.

Monitoring and Evaluating Vendor Performance

HR executives should communicate performance expectations and establish measurement criteria up

front. While it is difficult to have complete knowledge before contracts are signed, vendor and customer
expectations must be identified and articulated, along with the performance measures and reporting
routines.

HR executives should insist on honest and frequent status reporting by HR vendors and immediate
notification when problems arise. Common measures of vendor performance include cost per hire and
turnover rates of personnel hired.

One interviewee told us that vendor performance is enhanced by the use of performance standards and that
he uses outside consultants as needed to help establish performance targets for vendors. For example, an
actuary can provide advice on performance targets for health care coverage.

51
Similarly, a consulting firm can help identify the top money managers needed to handle investments for
company administered pension funds. Vendor performance is also enhanced by the use of performance
standards in which savings, for example from reduced workers’ compensation claims, are shared with the
vendor. Similarly, the performance of HMO’s can be enhanced by sliding scale standards that share risk
and cost savings with the HMO.

One of the senior HR executives noted that the company’s recent participation, competition, and
subsequent recognition as a Baldridge award winner taught them how to better select and partner with
vendors, including their HR vendors. One important lesson learned was to share information with the
vendor and provide regular feedback. Another senior HR executive observed that power is exercised by
the sharing rather than the hoarding of information, especially when partnering with an HR vendor.

Because the rationale for outsourcing often involves a need for better service, HR executives should insist
also on high quality performance by HR vendors. Unlike employees who must be paid even when their
performance is substandard, outsourcing vendors do not have to be paid until contracted levels of service
quality are provided. HR staff members charged with monitoring the quality of vendor performance have
the option of using internal customer surveys for such purposes.

Getting good performance from a service provider

To get the sort of performance form a service provider, the following factors must be in place:

 The provider should be an established specialist in the function;

 The provider should be a ‘Mecca’ for top quality staff;
 The provider must be highly motivated to make continuous improvements.

If the provide is also a consultancy or even associated with a consultancy, or has other clients, the
motivation will have to be strong enough to limit the degree to which key personnel are moved to other
projects. Some movement of the provider’s staff around the client base will be desirable but even a slight
fall off in motivation, such as might happen if the provider strides an even better deal with another client,
could be very damaging.

EVOLVING ISSUES AND CONCLUSIONS

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HR outsourcing, the replacement of in-house services through the use of outside vendors, is more than a
passing fad. It is distinct from procurement because the organization is compelled to change both its
structure and processes to accommodate this new relationship.

The imperatives for outsourcing are numerous and diverse. HR outsourcing, seen initially as an
organizational response to downsizing and restructuring pressures, has evolved to reflect both operational
and strategic rationales for adoption.

One finding is clear from executive interviews and literature review –

HR outsourcing is consistent with three concurrent developments in the HR management field.

First, HR outsourcing is a byproduct of the restructuring of HR departments underway in organizations in

virtually every industry, regardless of size. Some HR departments are restructuring due to growth,
mergers, acquisitions, or top executive turnover.

Others are proactively restructuring to deliver better service at a reasonable cost to multiple stakeholders.
They are asking how they can provide valued services to both internal and external customers in light of
scarce organizational resources. The old HR staffing rule of one HR staff member for every 100
employees is not as meaningful today as a measure of HR efficiency or effectiveness.

Second, HR outsourcing is consistent with the "business partner" role that internal service staffs are
attempting to assume. HR is a service that is co-produced with line managers and employees. HR
executives are being asked to assist in providing business solutions to employee and customer problems.

"Organizations are now finally believing that people are the key-big improvements require people
innovations." HR executives are being challenged to develop core competencies to help formulate and
deliver these business solutions. Outsourcing can be used in conjunction with an internal HR focus on core
competencies to produce tangible business results, especially when that means partnering with an HR
vendor.

Third, HR departments are being challenged to change their bureaucratic, policing, "do things right
instead of the right things" culture to that of a valued service provider. This culture change demands that
all HR staff members ask and respond to the following questions. What is it that our organization does?
Who are my customers? How do I satisfy their current needs? What future needs will I be asked to fulfill?
What are the indicators of my value to the organization? Internal consumers of HR services know bad
service when they see it. HR departments, similar to the outsourcing vendors they contract with, must
learn to be customer- oriented and to deliver exceptional service quality to their customers.

The choice to outsource some or all of the HR domain is becoming increasingly likely for most firms.
Macro economic and environmental forces have compelled organizations to restructure and reexamine all
management processes including HR management. Little empirical research exists to guide informed
decision making.

53
Methodology

54
 Methodology
Outsourcing the human resources department is not that different from outsourcing any other function in
terms of the problems to be faced. However, there is one factor that makes it difficult for most
organizations to contemplate such action. The HR department is involved with issues that are critical to
the well-being of the entire workforce and to outsource those responsibilities will normally be seen as a
strong indication to all concerned that the management does no rate these issues highly

Sample

The sample size consisted of the HR’s Various companies belonging to various sectors:
1. Xerox India Ltd.
2. STMicroelectronics
3. HCL Comnet
4. GlaxoSmith Kline Consumer HealthCare Ltd.
5. Alcatel
6. Panacea Biotec
7. ICI Paints
8. Eli Lilly and Company

Method for data collection

The primary data for the study was collected by administering a structure and non disguised
questionnaire which was around various steps taken by the organization at the time of selection.
The secondary data was collected through various books ,magazines, journals ,newspapers and
websites.

Statistical Tools
Microsoft Excel templates was used for analyzing the data collected. The various statistical
tools used or analyzing were:

 Simple Percentages

55
Limitations

The following limitations were faced during the study taken:

1)As this study required some data of the company ,which was confidential ,and was not to be
disclosed and hence such data could not be reveled for the project purpose.

Methodology For Preparing the Questionnaire following:

While preparing the questionnaire following points were considered:

1. Many of the questions were left open ended, for the purpose of having a detailed comment of
the person concerned

2. There are few questions which were to be ranked; such questions were designed especially to
See the importance given to various parameters.

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Companies HR Outsourcing Data

57
HCL Comnet

58
About HCL Comnet:

A 100% subsidiary of HCL Technologies, HCL Comnet (HCL Technologies Infrastructure Services
Division) leverages its core strengths from the parent company. A focused player in the IT servicesarena,
HCL Comnet seeks to provide simplified infrastructure solutions through delivering highperformance
management services for complex, distributed infrastructure environments encompassing the Internet,
client and legacy based infrastructures.

Recognized around the world as a leader for Remote IT Infrastructure Management services, HCL
Comnet helps you build an infrastructure that is always available, always secure and always
reliable.Companies of all sizes rely on our experience, expertise and partnership to simplify their
ITinfrastructure management.HCL Comnet has experience of managing IT infrastructure for over 87
global customers. Companiesunique visibility solutions- Smart Manage and My Dashboard- provide
enhanced visibility into your IT infrastructure to optimize performance, increase availability and reduce
costs.

By partnering with HCL Comnet, you can leverage our process, expertise and people to provide the best
customer experience.HCL Comnet’s services portfolio includes wing-to-wing infrastructure management
encompassing Network devices, Security, Databases, Systems, Internet site operations management, and
End User .Computing services enabling customers to focus on their core business.

59
HR Outsourcing at HCL Comnet:

A 100% subsidiary of HCL Technologies, HCL Comnet (HCL Technologies Infrastructure Services
Division) leverages its core strengths from the parent company. A focused player in the IT servicesarena,
HCL Comnet seeks to provide simplified infrastructure solutions through delivering highperformance
management services for complex, distributed infrastructure environments encompassing the Internet,
client and legacy based infrastructures.

As company is growing at very fast rate. So they also believe that HR Department has to Outsource there
few function to keep the HR department .This will help in fact aligning HR Planning with Business Plan.
One way HR department will be become strategic partner of company.

HCL Comnet competitors and business partners have been in Hr outsourcing there HR functions. HCL has
HR department its not that all HR Functions are outsourced. As the companies which are providing HR
Services is lot. Its not that single company is specialized in all functions. Every function mostly
specialized by single company.

HCL has outsourced the following functions :

 Training
 Compensation Survey
 HR Audit
 Some part of Recruitment & selection
 Payroll

Hr outsourcing is done at HCL comnet for optimizing cost as well as transforms HR contribution to
business both.

HCL has been regularly taking feedback about outsourced functions from the internal customers. And the
feedback taken from them is considered seriously to improve the services. The practices are changed or
new are implemented when the internal customers ask to change.

The criteria considered by HCl to choose the providers are as follows:

 Guaranteed Services level
 Guaranteed Cost saving
 Compatible to culture.

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 HCL consider the growth of company, Globalization & increased Competition as main the main
reason to outsourcing’s market is so dynamic and companies are going global so its important to
concentrate on core activities and outsourcing others. This help HCL to improve its services and
improve company focus and gain world class capabilities.

Factors which were considered before outsourcing HR functions by HCL are as follows:

 Ethics and quality of outsourcing vendors

 Possibility of security breaches
 Cost-benefit equation not clear
 Lack of psychological acceptance

As company has outsourced its few functions and company is able to achieve its objective from HR
outsourcing.

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GSK Healthcare Ltd.

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About GSK Consumer Healthcare Ltd.
GlaxoSmithKline - one of the world's leading research-based pharmaceutical and healthcare
companies - is committed to improving the quality of human life by enabling people to do more, feel
better and live longer.

GlaxoSmithKline is a leader in the worldwide consumer healthcare market. With nearly $5 billion in sales,
over ten $100 million brands and present in 130 markets, the consumer healthcare business brings an
added dynamic dimension to GSK.

Operating in the fiercely competitive environment of retail and consumer marketing

GlaxoSmithKline Consumer Healthcare brings oral healthcare, over-the-counter medicines and
nutritional healthcare products to millions of people.

Brand names such as Panadol the analgesic, Aquafresh toothpaste, Lucozade the nutritional and
Nicorette/ Niquitin smoking cessation products are household names around the world. In one year .GSK
Consumer Healthcare produces - among many others - nine billion tablets to relieve stomachupsets, six
billion tablets for pain relief tablets and 600 million tubes of toothpaste.
But the driving force behind GlaxoSmithKline's consumer healthcare business is science.

With four dedicated consumer healthcare R&D centres and consumer healthcare regulatory affairs, the
business takes scientific innovation as seriously as marketing excellence and offers leading-edge
capability in both.GSK has over 100,000 employees worldwide. Of these, over 40,000 are in sales and
marketing, thelargest sales force in the industry. Around 35,000 employees work at 82 manufacturing sites
in 37 countries and over 15,000 are in R&D.

63
HR Outsourcing at GSK

GlaxoSmithKline - one of the world's leading research-based pharmaceutical and healthcare

companies - is committed to improving the quality of human life by enabling people to do more, feel
better and live longer.

GlaxoSmithKline is a leader in the worldwide consumer healthcare market. With nearly $5 billion in sales,
over ten $100 million brands and present in 130 markets, the consumer healthcare business brings an
added dynamic dimension to GSK.

GSK is and fast growing company with diverse and large number of products. So HR department need to
concentrate on more on core activities like PMS. Employee retention. In today’s market resources are the
most crucial for any organization to grow and in such a dynamic environment retaining then is little tough.

So HR department of GSK has very strong HR department. They do outsource some HR function but then
are very few in number. The GSK HR is strong. The handle most of the functions by themselves. But they
do always consider the option of Outsourcing when and where required .Its not they have closed though
about outsourcing HR function.

GSK has outsourced the following functions :

 Training
 Compensation Survey
 HR Audit
 Some part of Recruitment & selection
 Payroll

Hr outsourcing is done at GSK for transforms HR contribution to business both.

HCL has been regularly taking feedback about outsourced functions from the internal customers. And the
feedback taken from them is considered seriously to improve the services. The practices are changed or
new are implemented when the internal customers ask to change.

64
The criteria considered by GSK to choose the providers are as follows:
 Guaranteed Services level
 Compatible to culture.

GSK consider the growth of company, Globalization & increased Competition as main the main
reason to outsourcing’s market is so dynamic and companies are going global so its important to
concentrate on core activities and outsourcing others. This help GSK to improve its services and
improve company focus and gain world class capabilities.

Factors which were considered before outsourcing HR functions by GSK are as follows:

 Ethics and quality of outsourcing vendors

 Possibility of security breaches
 Cost-benefit equation not clear
 Lack of psychological acceptance

As company has outsourced its few functions and company is able to achieve its objective from HR
outsourcing.

65
STMicroelectronics

66
About STMicroelectronics

STMicroelectronics is a global, independent semiconductor company that designs, develops,

manufactures and markets a broad range of semiconductor integrated circuits and discrete devices.

An unrivaled combination of silicon and system expertise, manufacturing strength, Intellectual

Property (IP) portfolio and strategic partners positions the company at the forefront of System-on-Chip
(SoC) technology and its products play a key role in enabling today's convergence trends.
ST is one of the world's largest semiconductor companies. In 2004, ST's net revenues were
US$8,760 million and net earnings were US$601 million.

The Company's products are manufactured and designed using a broad range of fabrication
processes and proprietary design methods. To complement this depth and diversity of process and design
technology, the Company also possesses a broad intellectual property portfolio that it has used to enter
into cross-licensing agreements with many other leading semiconductor manufacturers.

ST has developed a worldwide network of strategic alliances, including product development with key
customers, technology development with customers and other semiconductor manufacturers, and
equipment and CAD development alliances with major suppliers. By augmenting its rich portfolio of
proprietary technologies and core competencies with complementary expertise from a variety of carefully
chosen strategic partners, ST has developed an unsurpassed capability to offer leading-edge solutions to
customers in all segments of the electronics industry.

The Company currently offers over 3,000 main types of products to more than 1,500 customers,
including Alcatel, Bosch, DaimlerChrysler, Ford etc.Approximately two-thirds of ST's revenue isderived
from differentiated products, a combination of dedicated, semi-custom and programmable products
designed to suit a specific customer or a specific application and therefore having a high system content.

This result reflects ST's exceptionally early recognition of the importance of system-on-chip technology,
which is key for addressing the fast growing market for convergence products, and the success of the
strategies it developed to ensure its leading position in this key emerging field.The group totals close to
50,000 employees, 16 advanced research and development units, 39 design and application centers, 16
main manufacturing sites and 88 sales offices in 31 countries.

67
HR Outsourcing at STMicroelectronics:

STMicroelectronics is a global, independent semiconductor company that designs, develops,

Manufactures and markets a broad range of semiconductor integrated circuits and discrete devices.

ST Microelectronics is the niche market player . there product belong to niche market and they are the
leaders in there market players. The ST microelectronics is a global company. The HR department is also
handled globally. The decisions are taken from global HR head office s and then implemented here.

STMicroelectronics has been outsourcing few of its function in India. As the concentrate more of core
activities and become a strategic partner.

ST has outsourced the following functions:

 Training
 Compensation Survey
 HR Audit
 Some part of Recruitment & selection
 Payroll
 Attitude Survey

Hr outsourcing is done at ST to transforms HR contribution to business. Cost has never been criteria for
ST.

ST has been regularly taking feedback about outsourced functions from the internal customers. And the
feedback taken from them is considered seriously to improve the services. The practices are changed or
new are implemented when the internal customers ask to change.

The criteria considered by ST to choose the providers are as follows:

 Guaranteed Services level

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  Compatible to culture.
 A proven track record;

ST consider the growth of company, Globalization & increased Competition as the main reason to
outsourcing’s market is so dynamic and companies are going global so its important to concentrate on
core activities and outsourcing others. This help ST to improve its services and improve company
focus and gain world class capabilities.

Factors which were considered before outsourcing HR functions by ST are as follows:

 Loss of sensitive information to public/competition

 Ethics and quality of outsourcing vendors
 Possibility of security breaches
 Cost-benefit equation not clear
 Lack of psychological acceptance

As company has outsourced its few functions and company is able to achieve its objective from HR
outsourcing.

69
ICI Paints

70
About ICI Paints:

ICI India manufactures and markets paints, speciality chemicals, rubber chemicals, adhesives &
starch. The company, through its joint venture, also manufactures and markets fragrances and
flavours.

With an employee strength of about 1200 (including its JVs), ICI India's manufacturing sites,
business and sales offices and distribution network spans the length and breadth of the country.
ICI's Paints business in India owes its success to innovative technology and strong brands such asDulux,
Duco, and 2K.

In the decoratives business, ICI's exterior paints portfolio exhibited a strong performance.
Commendable growth was registered by our exterior emulsion brands - Weathershield and
Supercote. Our retail tinting package 'Colour Solutions' is emerging as the preferred choice for top quality
paint retailers in the country, backed by strong retail brands like Dulux Velvet Touch,
Acrylic Emulsion and Gloss.

In the refinishing business, our advanced refinish offering '2K' has become synonymous with the
best quality refinishing paint available for India's new cars.

71
HR Outsourcing at ICI Paints:

ICI India manufactures and markets paints, specialty chemicals, rubber chemicals, adhesives &
Starch. The company, through its joint venture, also manufactures and markets fragrances and
Flavors.

ICI Paints has been growing at fast rate. So one has to keep pace with fast growing market has to focus on
its core activities.HR outsourcing has made very positive impact on ICI Paints HR department .ICI paints
are outsourcing quite a few functions to the vendors.

ICI Paints has outsourced the following functions:

 Training
 Compensation Survey
 HR Audit
 Some part of Recruitment & selection
 Payroll
 Attitude Survey
 E- Learning
 Some Part of Competency Mapping

Hr outsourcing is done at ICI to reduce the cost as well as transforms HR contribution to business. ICI
Paints want to reduce its HR department cost.

ICI Paints has been regularly taking feedback about outsourced functions from the internal customers.
And the feedback taken from them is considered seriously to improve the services. The practices are
changed or new are implemented when the internal customers ask to change.

The criteria considered by ICI Paints to choose the providers are as follows:

72
  Guaranteed Services level
 Compatible to culture.
 A proven track record;

ICI Paints consider the growth of company, Globalization & increased Competition as the main
reason to outsourcing’s market is so dynamic and companies are going global so its important to
concentrate on core activities and outsourcing others. This help ICI to improve its services and
improve company focus and gain world class capabilities.

Factors which were considered before outsourcing HR functions by ST are as follows:

 Ethics and quality of outsourcing vendors

 Possibility of security breaches
 Cost-benefit equation not clear
 Lack of psychological acceptance
 The fear of losing jobs

As company has outsourced its few functions and company is able to achieve its objective from HR
outsourcing.

73
Xerox India Limited

74
About Xerox India Limited

Incorporated in 1983, Xerox India Limited (XML) is a part of Xerox Corporation (NYSE: XRX), the US
$15.7 billion, Fortune 500 global document management company. Over the past 20 years, Xerox India
has shaped the Document Management industry in India by ushering in the world's best document
processing products and bringing innovative value-added concepts to cater to customer needs. Xerox India
has successfully transitioned three major movements in India since its inception, from copying to printing,
black and white to color and stand-alone analog to digital, networked products.

Xerox India's strategic intent is to become the leader in the document market in India by helping
improve the customer work processes, positively impacting productivity and costs while digitally
empowering them to transform their work. In other words 'helping people find better ways to do
great work.' Xerox India Limited growing portfolio of document management solutions combines its
offerings of services, software and hardware to deliver high value to its customers.
Through its three business groups - Production Systems Group (PSG), Office Systems Group (OSG), and
Consulting/ Outsourcing business group – company caters to its three primary markets of highend
production environments, networked offices (small to large) and document management services.

Xerox India is dedicated to providing document solutions that simplify work and enhance
productivity. Whether it's a small business or a multinational corporation, Xerox offer products and
services that can help a company improve its business processes and share crucial information and
knowledge. Technology helps Xerox to lead the industry. Since its inception, a billion dollars have been
spent on research and development.

This way the customers are assured of products and services with matchless quality, an abundance of
features, fast network support and speed. Xerox's reach extends across India with national distributors,
regional distributors and resellers. With over 100 plus products for the Indian market and the launch of 20
new products planned for 2005, Xerox has added technologically advanced products and services which
have matchless quality, an abundance of features, fast network support and speed. Each with advanced
capabilities meets highest document needs.

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Xerox India Limited was the first in India to help recognize the new value of documents in the
creation, capture and transfer of knowledge in the workplace. It was the first in industry to achieve ISO
9002 for both, Manufacturing and Marketing/ Customer Service Support and among first 10 companies in
India to obtain ISO 14001 for complete environment management systems. Xerox has a world-class
facility for manufacture of copiers, consumables and parts in India and is the industry number one in
overall Customer Satisfaction and Service with its nationwide distribution and reach.

HR Outsourcing at XEROX INDIA:

Xerox India's strategic intent is to become the leader in the document market in India by helping
improve the customer work processes, positively impacting productivity and costs while digitally
empowering them to transform their work.

In other words 'helping people find better ways to do great work.' Xerox India Limited growing portfolio
of document management solutions combines its offerings of services, software and hardware to deliver
high value to its customers.

Xerox India has outsourced the following functions:

 Training
 Compensation Survey
 HR Audit
 Some part of Recruitment & selection
 Payroll
 Attitude Survey
 Some Part of Competency Mapping

Hr outsourcing is done at Xerox to reduce the cost as well as transforms HR contribution to business.
Xerox India want to reduce its HR department cost.

Xerox has been regularly taking feedback about outsourced functions from the internal customers. And
the feedback taken from them is considered seriously to improve the services. The practices are changed
or new are implemented when the internal customers ask to change.

76
The criteria considered by Xerox India to choose the providers are as follows:

 Guaranteed Services level

 Compatible to culture.
 A proven track record;

Xerox India consider the growth of company, Globalization & increased Competition as the main
reason to outsourcing’s market is so dynamic and companies are going global so its important to
concentrate on core activities and outsourcing others. These help Xerox to improve its services and
improve company focus and gain world class capabilities.

Factors which were considered before outsourcing HR functions by Xerox are as follows:

 Ethics and quality of outsourcing vendors

 Possibility of security breaches
 Cost-benefit equation not clear
 Lack of psychological acceptance

As company has outsourced its few functions and company is able to achieve its objective from HR
outsourcing.

77
Panacea Biotec

78
About Panacea Biotec

The role of a health management company is highly crucial in a developing country like India
having a huge population of over 1000 million. On one hand morbidity and mortality is much
higher; on the other hand per capita expenditure is far less than many developed countries of the
world.

However, in the last 2 decades, Indian companies have made a significant progress in
providing much needed health solutions to the people of India. Their significant role is being
recognized in various international markets as well. Though product quality is quite essential,
especially in health products- affordability by the masses is also a crucial factor that would support the
cause of a healthy living. Panacea Biotec has emerged as a leading health management company of India
addressing both areas of concern.

From trading of pharmaceutical products to manufacturing, the journey for Panacea Biotec had been
adventurous and full of significant achievements. Panacea Biotec manufactures and markets branded
vaccines, pharmaceutical and biotechnologybased products of international quality. WHO prequalifies the
manufacturing plant for Vaccines in the capital of India, New Delhi for supply to U.N. Agencies. Panacea
Biotec meets most of the state requirements of OPV under Pulse Polio Program in India.

The plant for manufacture of pharmaceutical formulations got commissioned in 1989 in New Delhi. It is
equipped with latest and most modern machinery, equipments and infrastructure to roll out products as per
company’ s. stringent Quality Policy. Panacea Biotec forayed into Pain Management, Organ Transplant &
Diabetes Management segments by introducing the unique Non- Steroidal Anti Inflammatory Drug -
Nimulid (Nimesulide), Panimun Bioral (Cyclosporin) and Glizid (Gliclazide) respectively.

Since then it has introduced many more products in its portfolio and earned prestigious international
patents for its technology in drug delivery systems. Today, Nimulid, Panimun Bioral and Glizid are brand
leaders in their respective therapeutic categories in India. Panacea Biotec is only one of the few health
management companies, which is strategically poised to take up new challenges in the post WTO era.

79
Today Panacea Biotec has more than 150 scientists in 3 state of the art R&D centers in the field of
Pharmaceuticals, Biopharmaceuticals & Vaccines.
Panacea Biotec has continued its trend of steady and consistent growth over the years.

The company has more than 2000 employees on its rolls. Out of this, around 1000 are field sales
personnel who promote the products of its five Strategic Business Units (SBU's) - Pro, Grow, Diacar,
Critical Care & Bestonhealth to the medical profession. Besides Pain Management, Diabetes Management
and Vaccines, the company has significant presence in other therapeutic areas, namely, Organ
Transplantation, Osteoporosis, Antibacterial Therapy, Tuberculosis & Gastrointestinal. The company has
worldwide patents for many of its products.

HR Outsourcing at Panacea Biotec:

The role of a health management company is highly crucial in a developing country like India
having a huge population of over 1000 million. On one hand morbidity and mortality is much
higher; on the other hand per capita expenditure is far less than many developed countries of the
world.

Panacea is mid size company so cost saving is vital for them. As to reduce its HR cost Panacea Biotec is
outsourcing many of its function. This is actually helping Hr department to focus on its business and so its
core activities.

Panacea Biotec has outsourced the following functions:

 Training
 Compensation Survey
 HR Audit
 Some part of Recruitment & selection
 Payroll
 Attitude Survey
 Some Part of Competency Mapping
 HRIS
 Psychometric Testing
 Human Resource Accounting

Hr outsourcing is done at Panacea to reduce the cost as well as transforms HR contribution to business.
Panacea Paints want to reduce its HR department cost.

80
Panacea Biotec has been regularly taking feedback about outsourced functions from the internal
customers. And the feedback taken from them is considered seriously to improve the services. The
practices are changed or new are implemented when the internal customers ask to change.

The criteria considered by Panacea to choose the providers are as follows:

 Guaranteed Services level

 Compatible to culture.
 A proven track record;

Panacea Biotec consider the growth of company, Globalization & increased Competition as the main
reason to outsourcing’s market is so dynamic and companies are going global so its important to
concentrate on core activities and outsourcing others. This helps Panacea to improve its services and
improve company focus and gain world class capabilities.

Factors which were considered before outsourcing HR functions by Panacea are as follows:

 Ethics and quality of outsourcing vendors

 Possibility of security breaches
 Cost-benefit equation not clear
 Lack of psychological acceptance
 The fear of losing jobs

As company has outsourced its few functions and company is able to achieve its objective from HR
outsourcing.

81
Alcatel

82
About Alcatel

Alcatel is a leading provider of end-to-end telecommunications and internet based solutions in

India. Alcatel was the first company to manufacture digital switching equipment in the country.
Today, half of India’s fixed service lines are powered by Alcatel technology.
Alcatel in India offers the most comprehensive range of telecommunications and Internet solutions.

In addition to fixed line switches, Alcatel in India is active in the areas of GSM infrastructure,
transmission equipment, development and implementation of IN platform, EPABX, mobile phones,
broadband equipment, space equipment and telecom infrastructure projects in Railways, Roads and
Aviation.

Alcatel has contributed significantly to the development of the Indian telecom networks. Over he
years, Alcatel demonstrated our growing commitment to the Indian business by investing heavily in India
in terms of infrastructure and human resources. Alcatel has significant presence in India for its R&D E
(Research & Development and Engineering) activities.

Alcatel in India has established full-fledged, state of the art labs where in the software solutions developed
are fully tested for their robustness, before they are delivered to our customers worldwide. Alcatel's Indian
development centers have established a strong process capability, inorder to deliver reliable software
packages.

83
These development centers are located in Chennai and Gurgaon. Our facility in Gurgaon is ISO
9001:2000 certified and contains a software center focusing on development of application software.
Alcatel also employs a significant number of dedicated software professionals working with partner
organizations all over India. Alcatel is present in the entire range of Telecom infrastructure and solutions
in India.

Thanks to our global presence and a complete portfolio of products and solutions, Alcatel can provide
seamless communication experience to customers and end-users. No matter what technology you are
looking for – Alcatel has THE solution that is best adapted to your needs.

As the broadband market in India is set to take off in a big way, Alcatel with its world leadership
position in the broadband access market is ideally placed to cater to this new growth area in India. With
over 39.2 million lines of ADSL shipped and a cumulative worldwide market share of 37%, Alcatel is in
the process of tying up with integration and content providers to cater to the
requirement of the Indian customer. In the field of mobile communications, India has witnessed a strong
mobile subscriber growth in recent years.

HR Outsourcing at Alcatel:

Alcatel is a leading provider of end-to-end telecommunications and internet based solutions in

India. Alcatel was the first company to manufacture digital switching equipment in the country.
Today, half of India’s fixed service lines are powered by Alcatel technology.

Alcatel in India offers the most comprehensive range of telecommunications and Internet solutions.

Alcatel is a company whose almost whole HR department is outsourced. Only one person who handle the
HR department rest everything is outsourced. All function are outsourced .

Alcatel has outsourced the following functions:

1. Performance Management System

2. Induction of new entrants

3. HRIS

4. Retaining Employees

5. Outbound Training

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 6. Compensation Survey

7. Salary Administration

8. Psychometric Testing

9. HR Audit

10. Attitude Survey

11. E-Learning

12. Human Resource Accounting

13. Competency mapping

Hr outsourcing is done at Alcatel to reduce the cost as well as transforms HR contribution to

business.Alcatel want to reduce its HR department cost.

Alcatel has been regularly taking feedback about outsourced functions from the internal customers. And
the feedback taken from them is considered seriously to improve the services. The practices are changed
or new are implemented when the internal customers ask to change.

The criteria considered by Alcatel to choose the providers are as follows:

 Guaranteed Services level

 Compatible to culture.
 A proven track record;

Alcatel consider the growth of company, Globalization & increased Competition as the main reason
to outsourcing’s market is so dynamic and companies are going global so its important to concentrate
on core activities and outsourcing others. This help Alcatel to improve its services and improve
company focus and gain world class capabilities.

Factors which were considered before outsourcing HR functions by Alcatel are as follows:

 Ethics and quality of outsourcing vendors

85
  Possibility of security breaches
 Cost-benefit equation not clear
 Lack of psychological acceptance
 The fear of losing jobs

As company has outsourced its few functions and company is able to achieve its objective from HR
outsourcing.

86
 Data Analysis &
Interpretation

Data Analysis & Interpretation

HR Outsourcing:

87
As the market is so dynamic and its very important to concentrate on business. HR
outsourcing is become a way which help most of HR departments to help in concentrating
at core functions and outsourcing others.

100
100
90
80
70
60 50
40 40
50
40 30 30
30 20 20
20
10
0
  G S K H e a lth ca re

S TM icro e le ctro n ics

X e ro x

   P a n a ce a B io te ch

    A lca te l
HCL Comnet

IC I P a in ts

E li L illy a n d
C ompany
L td .

Most of the companies are outsourcing some or the other HR functions. Only Alcatel is one of the
company which has outsourced full of its HR department. Rest companies few functions are outsourced.

Reason to Outsource HR Functions:

Most of organization is outsourcing some or other functions. The main reason for companies to outsources
is rapid growth. As market is growing very well. Companies are going global. now companies are playing
in global markets and Increase in competition.

88
 Resons for Outsourcing

20 10

80 100

100

   downsizing rapid growth or decline,

  globalization, increased competition
restructuring.

Very few companies are considering downsizing and restructing reason for outsourcing.
Mostly growth is reason and companies are growing every year. All want to focus on core
activities. So activities which are not core are outsourced.

HR Functions Outsourced:

89
 Hr Functions Outsourced

9
8
7
6
5 Outsource
4 Internal
3
2
1
0
Performance
      Induction

     HRIS
     Retaining

Compensation

Administration

  Attitude

  E-Learning

Resource
  Outbound

Recruitment &
    HR Audit
Psychometric

Competency
Employees

Survey

Human
Training

mapping

Selection
   Salary
of new

Testing
    

  

Function Name

As most of the companies outsource some of its HR functions. But according to data collected the
following are the functions which almost all the companies outsource.

 Training
 Compensation Survey
 HR Audit
 Administration

The above are functions which are fully outsourced by most of the companies.

The following are the functions which are partially Outsourced by the companies:

 PMS
 Induction
 Employee Retention
 Psychometric Testing
 Attitude Survey
 Competency Mapping
 Recruitment & Selection

Feedback Taken from Internal Customer for the HR Functions Outsourced:

90
 Feedback Taken From Internal
Customers

Never, 0
,Quarterly
40

With Past
Year, 60

All the companies take feed back about the HR functions which are outsourced. Most of the companies
take it formally once in a year but there are few companies take quarterly. It’s not just formal feedback is
used to check the services. Informal feedback also play vital role.

The internal customer’s opinion are also considered after the feedback is taken to improve on services and
get best.

Internal Customer Opnion

120

100

80

60

40

20

0
Yes No

HR Functions Service Provider:

91
 HR Service Provider companies

10

Large Number of
Service Provider
Thin Number

90

There are large numbers of services provider for various HR functions.

92
Factors Affecting HR Outsourcing:

Most of the organization believes the main factors which are considered before Hr functions are
outsourced.

 Lack of Psychological Acceptance

 Possibility of Security Breaches

100 100
100
90 80 80
80 60
70
60
50
40
30 20
20
10
0
The fear of losing
public/competition

Ethics and quality

security breaches

equation not clear

psychological
Loss of sensitive

acceptance
of outsourcing
information to

Possibility of

Cost-benefit

Lack of
vendors
jobs

93
Recommendations

94
Recommendations:

1. Always outsource those functions which are time con

Annexure

Questionnaire

1. Are your competitors and business partners outsourcing any of their HR services?

95
a) Everybody else is already doing it; we seem to be last in line
b) No, we’d be trailblazers

2. How many companies are offering to provide HR services in the areas you are thinking of
outsourcing?

a) It’s slim pickings out there

b) I know of at least five good providers

3. Does your HR function operate across multiple territories?

a) Not really, it’s all in my backyard

b) Yes, and I can’t even count the locations, let alone name them

3. Which Categories do your company of HR Outsourcing Services?

 PEOs,
 BPOs,

 ASPs,

 E-services.

 Others

4.Human Resource functions which are outsourced by your company?

1. Performance Management System

2. Induction of new entrants

3. HRIS

4. Retaining Employees

5. Outbound Training

6. Compensation Survey

7. Salary Administration

8. Psychometric Testing

9. HR Audit

10. Attitude Survey

96
 11. E-Learning

12. Human Resource Accounting

13. Competency mapping

14. Recruitment & Selection

5. Are you considering outsourcing to optimise cost or to transform HR’s business contribution?

a) optimise cost
b) transform HR’s business contribution

6. How do your internal customers feel about the HR service that they’re getting?
a) Contented
b) We don’t consider there opinion.
c) Doesn’t make difference to them

7. When was the last time you measured feedback from internal customers and made changes to
your HR services based on the results?
a) Within the past year
b) What’s feedback?
c) Regularly

8. If feedback shows that you need to change your current practices, does company consider them
and do make or implement changes?

a) Yes
b) No

9. Do you know the value to the business of programmes driven by HR in the past year?
a) Yes
b) No 

10. What are the main factors which lead to outsourcing?:

 downsizing,
 rapid growth or decline,
 globalization,
 increased competition
 restructuring.

11.What is most important criteria for choosing an outsourcing provider ?

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  Guaranteed service levels;

 A proven track record;

 Guaranteed cost savings; and
 A compatible corporate culture.
 Others

15.What are the benefits you are getting by outsourcing your HR?

 help to concentrate on core activities;

 Improved service delivery
 To improve company focus
 To obtain resources they lack
 To free their own resources for other tasks
 To gain access to "World Class" capabilities.
 An opportunity to leverage expertise not available internally.
 Reduce cost
 Others

16.Factors hampering HR outsourcing:

 The fear of losing jobs

 Loss of sensitive information to public/competition
 Ethics and quality of outsourcing vendors
 Possibility of security breaches
 Cost-benefit equation not clear
 Lack of psychological acceptance

98
Bibliography

99
 Bibliography

Books
 Prof. Narender K Chadha ,Human Resource Management,2nd
Edition.

 Bolander & Snell Human Resource Management

Websites

 www.hrd.org
 www.humancapitalonline.com
 www.standard.com
 www.hrlinks.com
 www.hrd.com
 www.wetfeet.com

Libraries

 Amity Business School,Noida

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