With the competitive pressures building up across organizations, companies need to look around and initiate austerity measures to sustain competition. One such measure could be human resource outsourcing. IT companies with huge knowledge assets and innovative ideas can support companies in HR outsourcing to suit the strategic need of any organization. This article gives an account of five leading IT companies and discusses how, with the support of these organizations, HR can be transformed into a lean and thin function, focusing more on strategic issues of the organization.

According to Michael Corbett, outsourcing is "The use of outside business relationships to perform necessary business activities and processes in lieu of internal capabilities."It involves developing and extending relationships. Outsourcing occurs when an organization contracts out its processes to another organization to provide services or products of a major function or activity. Operations which are done internally are shifted to external suppliers, and the employees of the organization are often transferred to the service provider or absorbed in another unit of the organization. Some treat this as surplus manpower and handle it differently.

In Human Resource Management (HRM), outsourcing of HR activities was first initiated in administrative and operational functions in early 1950s. These functions were very specific, routine and non-strategic in nature. Hence, these processes could be easily outsourced. Today, a large number of companies have opted for outsourcing some of their HR processes from leading IT companies in India and abroad. Surveys show that majority of the organizations have outsourced at least a part of their HR functions. Even, over half of these organizations plan to outsource some more processes in future. The main objective of this outsourcing is to cut down the operational cost, in line with the strategic goal of the organization. However, some processes like HR strategies, policies and planning, career planning, succession planning, industrial relations, performance and knowledge management have been retained by many as a prerequisite of HR activities.

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