Human resource outsourcing: Is the HR function losing its relevance in organisations?

Abstract

Human resource outsourcing (HRO) is one of the emerging practices in outsourcing, and represents the biggest portion of the overall Business Process Outsourcing market. Available research shows that most organisations are increasing their use of HRO and almost every aspect of the HR function is currently being outsourced or is being considered for outsourcing. The debate that arises then is the justification for the continued relevance of the HR function in organisations in the increasing wake of HR outsourcing. Why should we continue to have the HR function in organisations when we could outsource almost every aspect of the function? In this paper, having examined the nature of HR outsourcing, we contend however, following Ulrich (1998) that the HR function has never been more necessary than now and that with HR outsourcing, the HR function is shifting its focus from traditional HR activities to outcomes – results that enrich the organisation’s value to customers, investors, and employees.