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HR and Outsourcing

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Tigran Hovhannisyan

on 12 July 2016

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Transcript of HR and Outsourcing

Outsourcing and it's impact on HRM:
Issues and Evaluation

Presented by : Tigran & Julian
OK, Firstly What Is Outsourcing ?

Oh, it is Simple :)

“the tasks that were previously performed in-house are now purchased from another firm.”
Hill et al. (2008)
Reasons for Outsourcing

Cost Reduction

Greater Focus on Core Activities

Efficiency & Flexibility

New technologies and skills
Now we know corporate benefits of Outsourcing

Let us discuss its challenges and issues on HRM
Challenges for HR Managers

Change Management
Managing performance
Managing turnover and absenteeism
Creating job satisfaction and commitment
Legal Obligations
Organizing and designing the work
From HRM perspective,
we identified following Issues

1. Budget Pressure of Host Company

2. Our own performance

3. Quality of communication

4. Value Added Work or not ?
Good News !!! WE have a MODEL
Job Design

Change Management

Contract & Legal
Psychological Factors
Job Satisfaction


Motivation & Socialisation
Desired Outcomes
Customer Service



Employee Turnover
Anderson & Ankerstjerne (2010)
Examples ? Sure !

Outsourcing Problem Within Vodafone

Who’s With Vodafone here?

Do you like the service?

Scenario – Last week I called up Vodafone to check to see what was going on with my network coverage, due to the fact that my calls were dropping out half the time. It took them

Approximately an hour to:

1. Understand My Problem
2. Seek to see what the Problem was
3. Give me a professional answer

Happened to you Before?
Vodafone Fail ?

Caused Lack of User Satisfaction

Proved that there had been Poor Training and development

Created a loss in profitability

Loss in Market Share

Example – Outsourcing Problem with Qantas

Travelled with Qantas Before? How did you find the flight?

What was outsourced?

- Qantas outsourced Maintenance Work
- What went wrong?

Increase in Mechanical Failures


“If you outsource a problem, you
usually end up with an outsourced
problem”(Williams 2010).

What Went Wrong?

- Lack of Communication Management

- Lack of Training and Development

- Understood Benefit, but didn’t consider
Impact on HRD

Prevents Training & Development

Poor Union Power in Outsourced Country

"SweatShop" Condition

HR laws and guidelines wont progress because of outsourcing


Outsourcing & Reasons





Impact on HRD
Full transcript