Outsourcing has become a
hot topic in today's business world and is becoming the new buzz in India. One
aspect of this is HR processes outsourcing, which many
people consider as yet another step in this business trend. For businesses
having scarcity of resources or time constraints to cope with HR
functions, outsourcing is a cost-effective alternative towards in-house
human-resource staff. Not only the companies pursuing
outsourcing but also the companies with very good internal HR processes
are struggling with HR. The trend seems to have hit not only big
multinational companies, but also public and government
undertakings. Estimates show that the latent size of
HR outsourcing in India is about $2 bn with a current market of
$27 mn and it is growing at a rate of about 50%. HR outsourcing in
India has not seen the required momentum as many companies
presently outsource selected low-end HR processes. Around the
world, companies are realizing that headcount is directly related to
revenue and are outsourcing most of their transactions and
administration related work, however, the general opinion among Indian
companies is that it is still economical to manage all their HR process
internally. Many companies in the region are either unfamiliar with the
process and procedures of HR outsourcing, or are unaware of
the players operating in this area. Yet another reason why HR
outsourcing in India is on the back foot is the government and industry's
failure to tackle issues like data security and data privacy. Most foreign
companies insist that their outsourcing agreements contain detailed
and precise contractual specifications regarding data privacy and
protection.
A company has to perform
several basic human resource
related functions, like payroll,
employee benefits, hiring and
recruitment, general and personal administration, fixed assets
administration, receivable and logistics
management, network, hardware maintenance, telemarketing,
call centers and database management which otherwise can be
outsourced. If these human resource functions are outsourced, it can help the
company to cut costs on human resource, reduce overheads on HR and
recruitment, shorten the employee turnover, improve employee
satisfaction levels and can yield superior performance in terms of
productivity, cost, quality and customer satisfaction metrics. The most
common processes outsourced in India are related to training, payroll
processing, statutory compliance, surveys and benchmark studies. |
