The core processes adopted for outsourcing HRM in Australia and its outcomes
School of Business and Law
The purpose of this paper is to discover the types of HR outsourcing processes employed by Australian organisations and their relationship to outsourcing outcomes.
This paper is based upon the results of a survey of medium to large Australian organisations. The survey data were analysed using quantitative analysis to extract the types of HR outsourcing processes, outcomes, and their relationship.
The analyses identified three types of HR outsourcing processes: screening and selecting, strategic fit, and managing and monitoring. The “strategic fit” process exhibited the strongest relationship to the HR outsourcing outcome followed by the “managing and monitoring” process. The “screening and selecting” did not correlate with HR outsourcing outcome. For each type of HR outsourcing process no correlation was found with the outsourced HR functions. It was found that the most important criteria for selecting an outsourced service provider were trustworthiness, reputation in the industry, cost structure, and history with the organisation. The least important criteria were the service provider’s financial position and cultural similarity with the organisation.
The research design acquired information from a single participant from each organisation which may result in a one-dimensional view. In addition, the data were collected from Australian organisations limiting its generalisation globally. Environmental and political factors were not included in the study. Therefore, researchers are encouraged to consider the influence of these factors on the HR outsourcing process.
The discovered HR outsourcing processes, although different from the generic HR outsourcing model, can be used by organisations to outsource HR functions in a more efficient and effective manner within the Australian context. The research results also indicate the importance for service providers to develop a good reputation and establish trust.
This study is the first quantitative research that determines the specific HR outsourcing processes and how they related to the HR outsourcing outcome in medium to large Australian organisations. The identification of these process types is unique and useful in validating and refining HR outsourcing knowledge within the Australian context.