In the modern setting, outsourcing turns out to be highly complex and organizations use outsourcing vendors for a variety of reasons.According to analysts, companies usually cite cost reduction as the most crucial reason for HR outsourcing.
HR outsourcing (also known as HRO) is the process of sub-contracting human resources functions to an external supplier.
There are many ways in which outsourcing human resources can be done:
Business process HR outsourcing (also known as BPO), where an external supplier manages discrete HR activities, such as payroll administration or recruitment, or perhaps the whole human resources function.
Shared service HR outsourcing, where only the transaction or administrative elements of HR’s activities are subcontracted to an external supplier.
This may include the personal interface with employees.
Application (and facilities) service HR outsourcing, where external providers look after the technological (and physical) infrastructure to support human resources activities