Tof somewhere in the region of £71 million. However, this has also caused issues with staff members in the department, with the potential for 36,000 jobs to be lost as a result over the course of the outsourcing contract.
he debate over whether it is better to outsource your human resources function or use an in-house department is one which has a number of factors to consider; not least with regards job losses and the money which can be saved by making the correct choice for your business.
In 2009, it was reported by the Chartered Institute of Personnel and Development (CIPD) that 69 percent of companies in the UK were providing their own HR services wholly in-house with no outsourcing at all. However, it also said that it expected this figure to fall considerably— to 42 percent.
The main driving factor that can be critical for the growing trend in outsourcing HR jobs is the fact that firms which choose to do so can make substantial savings in the long run on their outgoings. However, this is not without its shortfalls, as any outsourcing of HR operations can and will lead to wide-scale job losses within the company, which can result in a drop of morale for those who are left behind.
In recent weeks, both of these factors have been illustrated in the United Kingdom, with the Ministry of Defense announcing that it is to use HR firm Serco on a four-year contract. Due to the fact that it will be able to get rid of a substantial amount of staff over the course of this four-year contract, it is estimated that the ministry will make a savings
When it comes to globalized companies though, there are issues which can be solved by keeping the HR services in a single place through an outsourced company.
pooja negi
PGDM 2nd sem
16/4/12
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