Human Resource Outsourcing

HR outsourcing is a contractual agreement between an employer and an external third-party provider whereby the employer transfers the management and responsibility for certain HR functions to the external provider. Human Resource Outsourcing combines mainly two words i.e. Human Resource and Outsourcing. Human Resource is the set of people who make up the workforce of an organization, business sector, industry or economy. Outsourcing is a business practice in which a company hires a third party to perform tasks, handle operations or provide services for the company. If someone has specialized in an activity which is not strategically critical to our business and is able to do that cost effectively, it is better to get it from outside. HR outsourcing has day to day human resource functions so as to focus on strategic HR issues that impact corporate performance and shareholder value. Recruitment and selection, payroll and compensation management, staff training, employee benefits and service, job evaluation are examples of such functions.