HR Outsourcing (HRO) is the fastest growing subset of the more comprehensive Business Process Outsourcing (BPO) sector. Virtually every company has HR needs, be it small entrepreneurial firms or large multinationals. Almost all businesses can potentially benefit from some kind of outsourcing. But the challenges is to decide which HR process to outsource and which to retain.

Human Resources Outsourcing (HRO) has become one of the most talked about areas in HR in the recent past. Courtesy the major thrust it got from the industry, especially in the west. It seems to be a matter of time before the trend hits Asia and the Indian shores in a big way. HRO today is the fastest growing subset of the more comprehensive BPO sector. According to some experts, within the next ten years, HRO companies will employ more than half of all HR professionals. Almost all non-core HR functions will be shifted out of organizations, leaving only those activities which are of strategic importance and provide competitive advantage to be handled by the company. Even as the signs seem positive for this radical shift, some pertinent questions come to one's mind regarding the wisdom of the concept, the pitfalls therein, and of course, as to where this vital function of human management is headed. This article attempts to throw light on the growth of HRO, the reasons behind outsourcing the various HR functions, and the issues involved in HRO.

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