Human Resource Outsourcing in India Essay

This article attempts to discuss HRO in Indian context and the possible future of HRO in the Indian line scenario. Certain preparatory actions are in addition prescribed to effectively used HRO as a strategic business tool. HRO HRM Architecture Today, as we meet moved into expediency parsimony, dealing with knowledge and knowledge workers is very historic as gentlemans gentleman jacket cr give has become a critical success factor for organizations. HRM is seen as a distinct identity, separate from organisation and Facilities section of the establishment. This can be clearly seen from the importance being given to HRM Architecture.In addition to the handed-down roles for HR, over the years, in the IT and ITes sectors, distinct roles have emerged such as corporate HR, business HR, generalist HR, techno operational HR, etc. The job holders in these roles are expected to give disparate deliverables as related to their structural aspects. It is pertinent to note that a 199 8 survey by center for effective organization at university of Confederate Californias Marshal School of business shown that 79% of HRM managers describe themselves as business partners and 53% of line managers agreed that HR managers are now performing the roles of business partners.Thus, today HRM is getting fountainhead embodied into business functions such as marketing, finance or operations. This can be, in a way, considered as a starting point of HRO, because, from this, emerges the charter for HR function to work smart for business results whether by doing functions and activities each on their own, or by getting some of them d matchless through outsourcing. Additionally, it overly puts air pressure on HR function to find partners who can take over specific transactions and processes at a wiped out(p)er cost. In this way, HR will get focused on tangible results (which was one of the complains against HR in the past).Thus, to some extent, it will help forego up time fo r core-HR activities that result in improvements which positively influence the bottom line. A word of caution though that it may not free up time, and should not free up too much time. After all, HR is essentially a personal touch button of the organization and too much outsourcing might result in deprivation of personal touch and decreased human interaction which may frustrate the employees. HRO Evolution HRO is ever an evolutionary exercise for the organization. Initially, companies are reluctant to outsource, they prefer to do every act in the own backyard.As the organization grows in terms of its life cycle, slowly, experimentation phase will begin when they start outsourcing reliable simple transactions or processes. Sometimes, they may thus far take a parallel run with the v haltor. When the run through is positive and as they make progress, companies may make decisions to penetrate further into the HRO space. According to Everest Research appoints annual HRO study, th e just about normally outsourced HR functions include Pay roll Benefits Employee data worry Info systems Contact centers.As the companies find that on that point are substantial realises from outsourcing, they feel attracted to go in for deeper penetration. Thus, it is possible to categorize companies adopting different levels of HRO in their organization. (See Table 1) Table 1 LevelActivities OutsourcedType of HROBenefits 1Admin services, pay roll, pension, PF mgt. , etc, temporary staffingTransactionCost energy 2L1 + rearing, new employee induction and executive searchProcessStandardization Cost Replication of unplayful practices 3L1 + L2 + campus hiring, online assessments, HR audits, employee surveys etc. functionQuality Cost, benchmarking etc. HRO in Indian Business The debate on HRO in India still hovers some the spare-time activity questions Has HRO really arrived in India? Are we missing the HR outsourcing bus? Should companies outsource their HR functions? We also seem to be aware that The New Mantra is HR Outsourcing In this maze of debates and arguments, some facts privation to be cleared. HR outsourcing in India has not seen the required momentum and is limited to trickle effect, with companies outsourcing a few selected, low end HR processes Says Anil Mahajan in an interview for an article on HRM.In India, most common outsource processes are related to educate, pay roll processing, benchmarks studies and legal compliance. Some HR consultants feel that in Indian HRO scene, quality is an issue. It is reported that some MNCs wanted to outsource end to end HR solutions, but could find a suitable vendor and hence decided to set up its own outsourcing centre. While many experts in the field believe that there is a good scope for HRO in India, it is a fact that our present share in the global market of US $ 80 bn. is lone(prenominal) a minuscule.Estimates show that size of HR outsourcing in India is about US $ 2. 5 3. 5 bn. neverthel ess another study shows flat markets in HRO world wide between 2005 2007 but 2008 promises to be different In the flat world of today, as India becomes more and more global in business and economy it will be a compelling need for companies to resort to outsourcing in the interest of survival and growth. Thus, even though, as of now, HRO in India has not caught up sufficiently time is right for making rapid strides to project up and make best use of the opportunities presented by the wave of HR outsourcing.HRO as Double keen Weapon In India, we are fortunate to have the double advantage of HRO as we all know, HRO operates in an environment where there are abundant takers and abundant givers. HRO activities have two edges one as the service provider and another as a client who is outsourcing the process / transaction. At present many Indian companies are acting as service providers as a natural step, India with its vast millions of English speaking, trainable spring chicken who are willing to learn and serve clients as and idle platform to take on the HRO wave.Thus, India may finally become the outsourcing centre for HR services. The growth in the HRO itself may trigger further developments. all HRO companies may, in turn, begin to outsource some of their process to another service provider. Thus, a virtuous HRO business cycle may get activated. After all, We Are All in Services Now (Prof. jam Teboul). According to him, the process, people and credibility are 3 key elements in the making of value proposition. stack interaction may place a sort of limitation on HRO spreading without a human faceThe basic tenet of HR philosophy should be that HRO must be implemented with extreme regard to Human face of activities being outsourced. This is because of the uniqueness of the HR issues. There cannot be a straightjacket solution for all human issues hence human interaction element needs to be always kept in mind and given a priority. We need to get over trus ted drawbacks as a community of employers in order to benefit from the HRO wave. If we have to shape up, good future we need to know aht we should to and what we should not so that our progress is never stalled.Hence, it is necessary to appreciate the barriers identified for the spread of HRO in our country. The following are some of the barriers identified in literature on the subject ethnic breakout and snuff it management thinking Confidentiality and cost factors Lack of awareness on cost-to-benefit equation of HRO Quality of end results. A word or two about separately of these barriers will clear the aspect. Cultural lurch requires us to trust and be trusted. The two parties involved, namely service provider and client, need to trust each other not only about confidentiality but also about the capability to delay it. more employers and top management feel that it is better to have own HR persons dealing with all the issues kind of of outsourcing. Reasons may be many for su ch out see, but there is a need to change in order to think professionally and ethically. If we can trust an advocate or a doctor or the tax consultant, why not HR service provider? Confidentiality and cost factors relate to the ability of HR service provider to handle information professionally and confidentially. Ethics both personal and corporate run across a great role.If we think proper work ethics can be created through good leadership, we need to develop and nurture such leaders appropriately. Lack of awareness among persons about cost / benefit equation needs to be overcome by education right from the top level to look at HRO as a hard core business option and to quantify the benefits correctly. Lastly, quality issues need to be addressed again through building a quality culture by following the total quality management (TQM) practices.Internal and external customer orientation among all and education and training for all on TQ practices and bring about improvement in qual ity. The Indian experience of TQM is quite adequate in this regard and there is a bright chance of success for improving the quality aspects of HRO. preceding(prenominal) Activities While is it necessary to be clear about changes that we need to make on an individual or a company basis, it is equally important to focus on the preparations needed by us a community of service economy.For any service economy to grow, especially in the network era of today, there is a need for adequate preparation so that ultimately, the environment of business responds favorably to the needs of the market. In this regard, certain preparatory activities have to be undertaken immediately. The heterogeneous activities for this purpose can be broadly assort as Infrastructural Educational Business/ operational Social Under each of these, there are various elements that have to be taken under consideration. The following matrix will show these points clearly.As most of these items are self explanatory in nature, a detailed description of individual items is not do in this article. However, it has to be emphasized that these sub elements are very important contributions to the climate of HRO in a microeconomic sense. The elements given in the matrix are only illustrative and are not exhaustive. preparatory activities needed for HRO Infrastructural / Technical Telecommunications and network accessibility Roads TransportEducational Training Related Curriculum in colleges HRO training centers E Learning transactions / process Counseling centers Business Related Performance parameters Quality measures Feedback Relationships / Cultural sensitivitySocial Quality of the work Life balance Stress management Time management Security at workplace Conclusion In conclusion, it may be said that HRO is going to slowly but steady become a part of business strategy. HR professionals will drive the initiatives of HRO, of course with support from top management. The time is now ripe for HRO to suc ceed in view of HRM being seen and treated as an important element of business resources in the service economy of today.Certain new roles have emerged which confirm this position. though the Indian share of the revenue pie today is very small, there is a very good chess opening of our riding high on the HRO wave that is round the corner. As a community, it is necessary to pose barriers and identify the changes or adjustments we need to make as individuals and companies. As HRO operates as a subset of BPO and overall business environment, certain preparatory steps need to be taken as a community in general. With all this, it is possible to ride high on HRO wave in the next few years.