Performance effects of outsourced training and payroll functions

Abstract

The increasing call for the improvement of Human Resource (HR) administrative activities aimed at making HR a more strategic player that should add value to organizational growth has made training and payroll vulnerable candidates for outsourcing in order to increase productivity, speed, flexibility and innovation in growing business processes as well as acquiring modern technology and requisite skills. Although, studies show that increased dependence on outsourcing may eventually lead to a reduction in the level of innovation, it was also discovered that HR training function has the capacity to produce a positive organizational performance effects. On the other hand, payroll activities are perceived to be transactional not relational as well as being of insignificant strategic importance, therefore does not provide a source of competitive advantage. This paper therefore examines the performance effects of outsourced training and payroll functions of organizations to ascertain the extent to which they have boosted productivity, sped, flexibility and innovation drawing from existing detailed literature. The need for organizations therefore to first understand and define the problems they want to solve before approaching outsourcing as a solution is imperative. There are evidences in this study that suggest that these insights are important for organizations making outsourcing decisions.