A position or vacancy can be filled by direct recruitment by the company or by outsourcing the employee from a staffing agency. After selecting a candidate, he should be placed on a suitable job. Proper placement helps an employee to get along with people easily, avoid mistakes and show good performance on the job. Orientation makes the employee feel at home from day 1 and develops a sense of pride in the organisation and commitment to the job. Employee movement within an organisation may take the form of transfers, promotions, demotions or even separations. Transfers and promotions are intended to make the employee versatile and grow over a period of time.
Employee outsourcing refers to the shifting from the traditional employee-employer relationship. It involves transferring employer responsibility to a staffing agency or placement agency. Outsourcing human resource functions allows focusing on business development and provides administrative relief from many employment responsibilities such as payroll preparation, income tax reporting, employee benefits and workers compensation. It maintains a three-way relationship between organisation, employees and the outside placement or staffing agency. The employment agency works as a co-employer. This type of relationship between organisation and employment agency helps in giving a full range of services and to transfer or share many employer liabilities and responsibilities.
Pros and Cons of Employee Outsourcing
Although outsourcing of employees has many advantages but besides that it has some problems also. Here are the pros and cons of outsourcing human resources:
1. HR outsourcing enables businesses to concentrate on their core competencies, ultimately resulting in better productivity and results for the company.
2. With HR outsourcing, client companies can utilise their resources more effectively, as the human resources department is taken care of. It results in streamlined business processes.
3. Employee outsourcing enables employees of client companies to enjoy benefits typically offered in larger companies, these being outsourced from the staffing agency or employee leasing organisation. The comprehensive benefits package offered by such staffing agencies increases the buying power of companies in the job market and facilitates greater retaining of employees.
4. The staffing or placement or employment agency consists of experts in the business and legal fields, who can positively influence the client company and help it make better decisions.
1. One of the most significant concerns with outsourcing employees is the chance of misplaced loyalty. Employees outsourced might not put in the similar kind of effort as hired staff or display such an interest in the company.
2. This may lead to the question of control. It may be difficult to control employees in certain cases of outsourcing agreements where the employee is hired on contract and doesn’t need to report to anyone within the organisation.
3. Clients must watch out for hidden costs or unexpected changes in the services offered, and other aspects that differ from the contract they signed.