BPO as an effective HRM Strategy

As published in MIRROR, ISSN 2249-8117, March 2012


with special reference to Information Technology Companies , Chennai – Tamil Nadu


In the era of “ Global Market” and “e-economy” outsourcing is a new way to conceive the relationship among companies. Out sourcing (external source) is a management approach that allows delegating to an external agent the operational responsibility for processes or services that were previously done with in the enterprise. Outsourcing is the product of globalisation and is inevitable. Outsourcing has also become the trend in most Human Resource (HR) activities. HR outsourcing refers to a particular type of Business Process Outsourcing (BPO) in the corporate environment. When Organisations turns over the management of a particular Business Process (such as Accounting, Payroll etc.,) to a third party that specialises in that process a BPO occurs. The increased emphasis on outsourcing is a natural progression in the present competitive industry. Today’s HR outsourcing companies are ready to deal with all of these tasks, so businesses are actually capable of outsourcing their entire HR department. This allows the business to focus on other issues, including working on growing the business. It also means that they no longer have to deal with any of the time-consuming paperwork or tasks that HR departments must deal with, including various compliance issues.

Outsourcing the human resources department can also help the employees. Because they specialize in human resources, these outsourcing companies often know how to get employees the best HR services around, including health benefits and great retirement plans. They may also be able to provide rewards programs to the company for much less than what the company might otherwise pay. Also, if the employer or employees have a need of any kind of HR support in issues like worker’s compensation, these companies have years of expertise that is available to them.

One of the nice benefits about human resource outsourcing is that it is not an all or nothing situation. Outsourcing only the payroll and attendance, for example, while dealing with compliance and taxing is also possible. Outsourcing different HR tasks to different companies is also possible. It all depends on what the business needs. This paper is a sincere effort in bringing the HR outsourcing as an effective HRM strategy which is a hype in the globalised business scenario.

Key Words: HR strategy, HR outsourcing, BPO