Reviews of business processes have led many organisations to decide that it makes business sense to sub-contract some or all non-core activities to specialist providers.
HR, as a non-profit centre, is an obvious candidate for outsourcing.
There are many ways in which outsourcing human resources can be done:
- Business process HR outsourcing (also known as BPO), where an external supplier manages discrete HR activities, such as payroll administration or recruitment, or perhaps the whole human resources function.
- Shared service HR outsourcing, where only the transaction or administrative elements of HR’s activities are subcontracted to an external supplier. This may include the personal interface with employees.
- Application (and facilities) service HR outsourcing, where external providers look after the technological (and physical) infrastructure to support human resources activities.
