When a number of companies are
outsourcing their HR activities, there must be certain
benefits associated with it. The major advantage is the
cost and the time factor. According to India Life
Hewitt, Vice-President, Leo Fernandes, “For large
organizations to service their mammoth payroll by
themselves is a huge drain on their resources.
Outsourcing this one activity alone is huge direct cost
saving for large legacy companies which could be in the
range of 20 to 40 per cent." 2
The major benefits of HR outsourcing are as follows:
• Fosters Innovation
• Increased speed to market
• Improved quality
• Focus on core competence
• Cost reduction
• Reduced administrative costs
• Improved customer service
• Insufficient staff
• Conserve Capital |
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The major HR functions companies outsource
Benefits
Payroll
Rewards
Recruiting
Learning / Development
Performance Effectiveness
Workforce Planning
Workforce Administration
Workforce Relations |
Source: Hewitt Associates
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[2] In an interview to Deccan Herald, "Changing facet of HR in outsourcing,"
December 25, 2002.
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