In future, companies will continue to focus increasingly on their core business; even more in difficult economic situations like the present one. They will have to concentrate their efforts on areas of strength in order to gain competitive advantages. What is not in the core business of the company might be outsourced because it can be made at a lower cost by someone. When you outsource, you gain free time that can be utilized for the core business and to develop you own competitiveness. Managing everything in your company can reduce focus on the important things. The better you manage your time, the less are your concerns. Outsourcing can be used in order to reduce the number of employees in a company. The work they do can be done outside and the company is relieved of the responsibility of employing workers for it. The system thus becomes more flexible.
[...] Then, companies want to see the results and make the final decision. So one of the best solutions is to outsource and keep some function: this strategy is called “Strategic business partner”. But for a company it is really a hard question: which part am I going to outsource? There are transactional tasks like management of compensation and treatment of prejudices and transformational tasks like training and career development. Our team met a French entrepreneur who has his own business specialized in the recruitment. [...]
[...] III) What is the ultimate result of outsourcing? We have chosen to take an example to illustrate one of the ultimate results: CIBC is one of Canada's largest companies with 44000 employees and about 450 in the human resources department. CIBC decided to outsource parts of its human resources and chose EDS; a company specialized in HR services, as a supplier. The parts of outsourced HR were payroll processing, benefits administration, a call centre for employment enquiries, occupational health and safety services and HR technology. [...]
[...] The possibility of outsourcing has a great impact on employees moral. Indeed, they know they can be fired anytime and this could affect their productivity and their cohesion in the company. A key competence of the companies in the future will be to communicate around the outsourcing and to manage the effect of the outsourcing for people staying inside the company. From a psychological approach, this outsourcing is going to be more used. With times, legislation is becoming more complex. [...]
[...] New tasks were directly outsourced without in-sourcing. In this case, companies did not have competencies inside to control and manage how the work was outsourced because they never did it by them-selves. This could become a threat for some companies. In future, analysts might see the human resource management outsourcing market focusing more on the operational and strategic part rather than the support tasks. We can observe this trend in the advising companies which are growing year after year with respect to their sales on advices. [...]
[...] Organizations that attempt to outsource face a backlash. For example, the city of Toronto endured a three-week strike by garbage workers over the issue of outsourcing. Extreme levels of outsourcing hollow out a company, leaving it a shell. There may be unintended consequences of outsourcing the organization's knowledge and skills to outsiders. The vendor may even sell the acquired know-how and company secrets to a competitor. Organizations can find that outsourcing employees' skills limits these organizations' ability to learn and exploit changes. [...]
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