1.3.3 Outsourcing the HR Function Flashcards
What are the HR functions that are the most likely candidates for outsourcing
- Payroll administration
- Benefits administration
- Record keeping and information systems
- Retirement counseling
- Outplacement and relocation
- Health and wellness programs
- testing, including drug testing and psychological testing
- Training and development, called learning system outsourcing (LSO)
- Recruitment, called recruitment process outsourcing (RPO)
Define Human Resource Outsourcing (HRO)
Paying outside specialists to perform some of their human resource functions
Define professional employer organization ( PEO)
These companies contract with employers to manage almost all human resource functions and claims to provide an integrated and cost- effective approach to managing employer liability by contractually assuming substantial employer rights and responsibilities
HRO can be a cost- effective method for companies to operate because
a) outside experts can use economies of scale to perform the HR function more efficiently
b) Outside experts can use their expertise and a broader perspective to do the functions better
c) Outside experts are better prepared to keep abreast of technological advances and new legal requirements
A contractual relationship between a PEO and an employer typically allows the PEO to what?
- co-employ workers and assume legal responsibility for specified human resource function for those workers
- reserve the right to direct and control the employees and share this responsibility with the employer consistent with the employer’s responsibility for its products or service
- pay wages and employment taxed of the employees out of its own accounts
- report, collect and deposit employment taxes with state and federal authorities
- establish and maintain an employment relationship with its employees which is intended to be long term and not temporary
- retain the right to hire, counsel, and fire the employees
