HR Outsourcing Meaning & Definition

Published by MBA Skool Team, Last Updated: September 18, 2021

What is HR Outsourcing?

HR Outsourcing is a process in which the human resource activities of an organization are outsourced to a third party vendor who specializes in human resource functions so as to focus on the organization's core competencies. Often HR functions are complex and time consuming that it will create difficulty in managing other important thrust areas. By HR outsourcing, this problem can be avoided which will enhance effectiveness by focusing on what the organization is best at. It will also improve the flexibility of the organization to the rapidly changing business needs. Usually businesses that outsource HR are typically small to midsize firms with number of employees ranging from 25 to 1500.

There are HR outsourcing firms present so as to meet an organization's HR requirements. Some HR outsourcing firms are generalists, offering a wide variety of services, while others are specialists, focusing on specific areas such as recruitment, payroll etc. Depending on the degree of outsourcing required, we can either outsource the entire HR functions or contract for specific HR functions.


Functions of HR Outsourcing

Some of the functions performed by HR outsourcing firms are:

1. Recruiting, training, and development

2. Overseeing organizational structure and staffing requirements

3. Tracking department objectives, goals, and strategies

4. Employee orientation programs

5. Talent Management

6. Appraisal and Performance Rating assistance

HR outsourcing has become a popular solution for organizations to remain competitive and cut costs. It also provides skilled professionals who are focused specifically on HR.

Hence, this concludes the definition of HR Outsourcing along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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