The intangible costs of human‐resource outsourcing

Purpose – Describes some of the dangers in outsourcing some human‐resource management tasks while keeping others in‐house.Design/methodology/approach – Explains why some organizations have decided to outsource aspects of their HR. Shows that the measure, usually designed to cut financial costs, can entail intangible costs.Findings – Argues that major organizational change can be more difficult to achieve if part of the HR function is outsourced; that the recruitment process could be compromised; that outsourcing transactional aspects of HR can make it more difficult for HR people to get training in these areas; and that HR outsourcing can make an organization less flexible.Practical implications – Contends that a shared service center could be a better option, in some cases, as it can keep human‐resource functions in‐house while simultaneously contributing to cost saving by consolidating transaction‐based activities in one place within the organization.Social implications – Advances the view that measures...