Analysis of human resource outsourcing industry practice in Shanghai, China

Abstract

The purpose of this study is to discover the reasons why companies decide to outsource their HR functions, the likelihood of the HR function that the company wants to use outsourcing companies, the criteria for choosing the Human Resource Outsourcing Services Company, and the benefits and drawbacks of outsourcing HR functions. Questionnaires were utilized in this study. The researcher combined the questions which were tested by many other researchers to do the survey. There were 11 questions witch 96 items on the questionnaires. The researcher sent 400 questionnaires out and received 302 responses which resulted in a response rate of 75.5%. The data was analyzed using SPSS software to identify the highly selected items. The results of this study indicated the saving in costs and time consumption so as to focus on the core of the business and its strategies, and getting external talent and experience were the main selected reasons for a company to use outsourcing. The more routine and administrative a function is then the more likely it is to be outsourced, the more the function that is core oriented and requiring good relationship maintenance within the organization, the less likely it is to be outsourced. Also the better the reputation and the more professional is the outsourcer, means the greater the popularity of using this outsourcer. The results of this study not only analyze the data but also the negative risks which may happen such as inability to achieve the expectation of the company or unexpected cost increases. Interestingly, business confidential data spillover is the least selected negative elements. Additionally, the discussion shows support from other researchers. Recommendations are made and presented for application purposes and future research.