A Study of Human Resource Outsourcing in Indian IT Companies

10 Pages Posted: 21 Jul 2009 Last revised: 12 Aug 2009

See all articles by Mihir Dash

Mihir Dash

Alliance University - School of Business

Anubha Singh

Alliance Business School

Navodita Mishra

Alliance Business School (ABS)

Garima Gupta

affiliation not provided to SSRN

Date Written: July 14, 2009

Abstract

The human resource outsourcing (HRO) industry in India is at a crucial juncture in its short history. Organizations are increasingly taking up HRO as an opportunity to streamline processes, reduce costs, get access to the latest technology and tools, consistently achieve better quality, and align human resources with the overall business as quickly as possible. On the other hand, providers are seeking to optimize the quality of services to their clients at a cost that still allows for a profit. Reshaping the business model in a way that benefits both buyers and suppliers is critical to the survival of the industry.

Most executives view outsourcing merely as a source of cost reducing. The greatest savings are expected to come from lower labor cost and reduced project timelines. However, outsourcing also creates new challenges and expenses for the organization involved. Those may include vendor selection costs, legal costs, costs of transition and many others. That is why despite the evidence of possible major up-front cost savings many outsourcing vendors have yet to prove that they are able to provide positive ROI in a complex project. The study analyzes the different criteria for outsourcing, highlighting dimensions other than simply cost reduction.

Outsourcing is rapidly changing the shape of the modern industry. It is important for companies not to underestimate the speed of this process and seize the opportunities and benefits it offers. This study also analyses the driving factors that encourage companies to make a decision to outsource its human resource function.

Keywords: human resource outsourcing, opportunities and challenges, criteria for outsourcing

JEL Classification: M55

Suggested Citation

Dash, Mihir and Singh, Anubha and Mishra, Navodita and Gupta, Garima, A Study of Human Resource Outsourcing in Indian IT Companies (July 14, 2009). Available at SSRN: https://ssrn.com/abstract=1435216 or http://dx.doi.org/10.2139/ssrn.1435216

Mihir Dash (Contact Author)

Alliance University - School of Business ( email )

Chikkahagade Cross,
Chandapura-Anekal Road, Anekal
Bangalore, Karnataka 562106
India
9945182465 (Phone)

Anubha Singh

Alliance Business School ( email )

19th Cross, 7th Main
BTM 2nd Stage, N.S. Palya
Bangalore, 560 076
India

HOME PAGE: http://www.absindia.org

Navodita Mishra

Alliance Business School (ABS) ( email )

Bangalore
India

Garima Gupta

affiliation not provided to SSRN

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