Abstract:
Human Resource Outsourcing is a process in which the human resource
activities of an organization are outsourced so as to concentrate on the
organization`s core competencies. Also HR functions are complex and time
consuming that it will create difficulty in managing other important areas. By
HR outsourcing, this problem can be reduced which will improve
effectiveness by focusing on what the organization is best at. It will also
improve the flexibility of the organization to the fast changing business needs.
The purpose of this study is to examine current and prospective HR
outsourcing trends in Sri Lanka considering the factors underlined by an
organization, in taking the decision of using HR outsourcing services from a
third-party company. Data were collected from HR staff through a
questionnaire-based survey using convenient sampling with random selection.
Descriptive statistics were used to analyze the data. Findings revealed that
there is an increasing demand in outsourcing Payroll function in present
context. Further, there is a prospective trend in outsourcing Human Resource
Information Systems (HRIS) and foreign workers management and expatriate
management. Confidentiality and customer service are the most influential
factors on HR outsourcing decision. Firm size and sector had negligible on the
degree of HRO. More than half of the firms surveyed intended to do more
outsourcing in the near future.
