In actuality, outsourcing HR becomes an extremely popular trend in the contemporary business development. Many companies prefer outsourcing HR, instead of recruiting new employees in the local business environment. Outsourcing HR has a number of benefits, such as saving costs, for instance, but it also has some drawbacks, such as the risk of information breaches and others. Nevertheless, companies still employ outsourcing HR to boost their business development because outsourcing HR opens larger opportunities for accelerated business development. Therefore, the development of outsourcing HR becomes strategically important direction in the business development of companies in the contemporary business environment. In such a situation, companies should take into consideration strategic, performance, ethical and social responsibility issues that arise in the course of the implementation of outsourcing HR. In fact, these issues may raise substantial obstacles on the way to the effective implementation of outsourcing HR, as well as they can facilitate the implementation of outsourcing HR. Therefore, companies should come prepared to the effective implementation of outsourcing HR as well as to overcoming challenges associated with outsourcing HR.
In actuality, companies using outsourcing HR should be aware of the number of strategic issues, which may challenge the effective business development as well as positive outcomes of outsourcing HR. First, the company may face the problem of the cultural conflict because outsourced employees will have a different cultural background and the company may find the approach to outsourced employees that will meet their cultural norms and traditions. For instance, many call centers in India provide outsourcing services, but males working in these call centers face substantial problems because this job is considered to be female. Therefore, companies outsourcing such employees are likely to face problems with their effective performance caused by the cultural conflict between the nature of the job and the background of employees. Along with cultural conflicts, companies may face the problem of the strategic development because of the widening gap between companies strategic mission and vision and the lack of understanding of strategic mission and vision from the part of outsourced employees. In such a situation, companies may face serious problems and fail to reach strategic goals.
Furthermore, companies outsourcing HR may face certain performance issues that may challenge the successful implementation of outsourcing HR. In this regard, it is worth mentioning the fact that companies outsourcing HR may face the problem of the deterioration of employees’ performance because of the low motivation of employees. Employees will receive financial and material motivators mainly but they will definitely lack non-material motivators, such as receiving positive feedback from the company’s managers. As a result, their low motivation will deteriorate their performance. At this point, the lack of face to face contact is another factor that contributes to the low motivation and deterioration of employees’ performance.
At the same time, ethical issues may also affect considerably outsourcing HR and its effects on organizations. In fact, companies outsourcing HR may conduct unfair and unethical policies. For instance, many companies outsourcing HR in under-developed countries often use child labor that is apparently unethical. On the other hand, child labor is consistently cheaper than adult labor, while costs of child labor in under-developed countries are substantially lower in under-developed countries compared to adult labor in developed ones, where child labor is legally banned. Therefore, companies outsourcing HR save costs but violate ethical norms, while child labor is just one of many instances of violation of ethical norms. The problem is that ethical norms in countries, where companies using outsourcing HR are located, are different from ethical norms of those countries, where outsourced HR are located. As a result, the ethical dilemma arises in face of many companies whether to outsource HR and benefit from it but violate ethical norms or, in contrast, refuse from outsourcing HR and face certain financial losses and possible deterioration of their competitive position.