Tech companies try to take HR offshore
Filed under: HRIS software, In this week's e-newsletter, Latest News & Views, Outsourcing
It’s common in the IT field: outsourcing operations to India. But will companies want someone overseas to handle HR processes? Some outsourcing firms seem to think so.
A few big, India-based tech outsourcing firms have started or are going to start going after the HR market. (Read more here).
Of course there are some disadvantages to handing HR over to an offshore firm. Many of them are magnifications of the disadvantages to outsourcing in general. Unlike IT, handling HR duties requires a good understanding of an organization’s culture. Also, many companies are wary of letting offshore firms handle employees’ personal data.
Then, of course, there are the legal concerns that are central to HR’s role. American employment laws are tough to understand even for many people in this country, not to mention someone on a different continent.
One thing this means for small and medium companies is it may drive prices down for HR outsourcing in general. Many domestic outsourcing firms are already going after the mid-market. Indian firms can offer services for relatively cheap, and if they start to make waves over here, prices across the board may fall, giving mid-sized companies even more options if they want to outsource.
Comments
2 Comments on Tech companies try to take HR offshore
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Joseph M. on
Mon, 14th Apr 2008 2:26 pm
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Tom on
Tue, 14th Apr 2009 3:06 am
I think that transactional activities, assuming a global processes and systems model is in place for a given company, can readily be outsourced. For example, it doesn’t take an in depth understanding of US labor law to make master data changes to employee records; something usually relegated to HR admins in most businesses. If this is the “nugget” they’re after, then I think they will succeed. However, it’s the consultative function of HR that is, in my assessment, nearly impossible to migrate without having dire consequences back on home soil. For exaple, I can’t imagine EVER seeing international collaboration with service providers for collective bargaining. But then again, I’ve seen stranger things in our business…
Best Regards To All,
Joseph
Does U.S. law have any restrictions to corporate sensitive HR data being located offshore (SS#, medical, etc.)? I know European law, I recall England limits external hosting of UK citizens’ data outside England.
Regards,
Tom
