HRO BY AJITHAA HASAN Evolving Role of HR

HRO BY AJITHAA HASAN

Evolving Role of HR · Strategic management decisions · Value-added services · Achieve a competitive edge · Primary functions are based on frameworks: competency-based structural process-oriented profit centers

HRO? n n Any activity in which a company lacks internal expertise and confidentiality and requires an unbiased opinion on human resources, can be outsourced. HR outsourcing services: PEOs, BPOs, ASPs, or e-services.

Professional employer organization (PEO) n n Assumes full responsibility of company's HR administration Takes full legal responsibility of your employees

Business process outsourcing (BPO) n n n Referring to outsourcing in all fields, not just HR Putting in new technology or applying existing technology in a new way to improve a process Self-access and HR data warehousing

Application service providers (ASPs) n n host software on the Web and rent it to users packaged applications (People Soft) or customized HR software

E-services n n HR services that are Web-based Includes BPOs & ASPs HR outsouring categories: Transaction & Administration outsourcing and HR consultancy

Why are organizations outsourcing?

Preference for HRO n n n Outsourcing of BOP instead of BPO Saves key people’s time Concentration on core competency Enhancing profitability Mid-sized cos - >87% of funds towards routine processing transactions Best systems, most experienced minds

Some Statistics n n n U. S. - >2/3 rds of the corporations have outsourced 5 or more HR functions 98% are ready to further outsource HR personnel shrunk by 16% Survey on “Outsourcing in the Asia-Pacific” confirms lack of momentum(5%) Outsourcing market in APAC region - $1. 14 billion in 1999 to $2. 56 billion in 2004

Advantages of HRO · Reducing or eliminating fines and penalties by keeping pace with changing government regulations. · Achieving measurable, bottom-line results by increasing efficiency and leveraging outsourcee’s economies of scale. · Lowering infrastructure and facility costs by having the HR function administered off-site. · Sharpening your business focus by eliminating interruptions caused by employer obligations, risks and liability. · Improving employee retention and morale by providing timely answers to payroll and benefits questions.

Advantages (contd. . ) · Expanding scope and level of service. Your HR department can’t be subject experts in all areas – our staff of more than 65 HR professionals can. · Implementing organizational initiatives that link to your overall business plan: HR becomes strategic, not tactical. · Overall, companies tend to outsource to alleviate administrative burdens and focus on strategic areas

Factors hampering HRO n n n n Cost factor & Confidentiality 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

Retain activities that Outsource activities that · · · Have high volumes Are repetitive and routine Reflect consistent customer needs Have opportunities to leverage Are service and efficiency driven Are easily measurable in terms of performance · · Support key business processes Get influenced by external forces Require high content expertise Are ad-hoc, periodic future oriented projects · Are difficult to measure · Have high impact on organization as a result of non performance, failure or mistake

Areas where HRO will work · Relocation · Recruiting/Staffing · Competence Development · Salary Administration · Consulting and Training · HR Information Systems · Disciplinary Issues · HR Surveys · HR Research · Staff Loans and Perks · Manpower and Career Planning

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