Often times the decision to outsource means the displacement of a significant number of company employees, and it is vital that the organization consider the decision carefully before making the move (Sinton, 2003).

The ramifications of deciding to outsource Human Resource duties reach far beyond the Human Resource department however, and because of this it is an issue that the entire corporate structure can be impacted by.

With the cost of outsourcing combined with the ripple impact that the decision to outsource has on a company overall the decision to outsource is an important one, and one that should involve deep analysis and investigation (Sinton, 2003).

The decision to outsource has an impact on the power and influence of Human Resource Departments.

As outsourcing continues to expand in the United States and elsewhere with regards to Human Resources, the market is dividing into three basic categories; technology enablers, consultants and administrative service providers (Adler, 2003).

The impact on HR departments can be seen from both an advantageous and a negative standpoint. Outsourcing frees up Human Resource professionals to work on the development of better labor relations and areas that can create a long-term profit increase for the company. The down side of outsourcing is that it does remove some of the power and influence of the company's Human Resource department from the company by spreading the duties around.

FOUR ISSUES

In making the decision to outsource Human Resource duties there are four important issues that must be examined.

Cost and business metrics like productivity, profitability and employee satisfaction.

The cost may be an initial issue but research has found it is not the most important consideration when deciding whether or not to outsource (Henneman, 2005). One of the...

Companies, today, are contracting with outsource vendors for five to 10-year agreements, therefore it is vital that the company employees remain satisfied with the services being provided by that vendor.
In addition the productivity of the vendor is an important consideration as a slow down in that company's efforts can mean a slow down overall.

CONCLUSION

The decision to outsource for the needs of a company in its Human Resource department is a decision to be undertaken with the utmost of seriousness. Many factors come into play when deciding whether to hire a vendor and some of those elements include the future of employee satisfaction with that vendor, the productivity that the vendor provides as well as how much time it frees the company HR managers to pursue other company endeavors and the cost of using a service. In addition the access to technology must be a factor.

Outsourcing Human Resource needs can be a significantly positive decision for a company as long as it researches the available vendors and chooses one that closely matches the company needs.