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How Can Companies Ensure the Success of Their Human Resources Outsourcing Initiative? (Report Date: January 2003, Full Report: 19 pages) Summary This report provides recommendations on what companies need to do to increase the likelihood of success of their HR (human resources) outsourcing initiative. The market for outsourcing HR functions is booming and its rapid expansion looks set to continue in the future. Unfortunately, the HR outsourcing craze has gotten companies diving into outsourcing head first, without carefully analysing the options and the potential difficulties that might arise during the outsourcing process. Although companies turn to outsourcing for different reasons, there are basic guidelines that they should all follow regardless of their motives. For example, companies need to identify which HR functions are core to their business and which ones are peripheral, and should only outsource peripheral activities. They should find a reputable outsourcing provider and clearly define the terms of the contract with their outsourcer. They should also involve employees and HR professionals actively in the outsourcing process and set up transition teams to facilitate the outsourcing project. If the decision to outsource is carefully and selectively planned and executed, and if companies take the necessary measures to avoid difficulties that are common during the outsourcing process, there is no doubt that substantial benefits can be achieved from outsourcing HR services. However, if companies jump into the process too quickly, and do not conduct all the relevant analyses, they are either setting themselves up for failure or for mediocre results. This report lists the key steps that organisations need to follow in order to manage the outsourcing process successfully.
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