Home › BBA HR › Human Resource Management › Managing Human Resources and Labor Relations › For which reasons do firms outsource human resou…
For which reasons do firms outsource human resource activities?
ATo avoid having to appraise the performance of staff
BTo keep the union out of the payroll department
CTo cut costs and to draw on greater expertise
DTo slow down the pace of benefits enrollment
Answer & Solution
Correct answer: C. To cut costs and to draw on greater expertise
1. Outsourcing means contracting an activity out to a service provider instead of running it in-house.
2. The first reason is cost, because another firm may perform the task better and more efficiently.
3. The second reason is expertise, because a specialist provider often knows more about the task than the client does.
4. A third reason is capacity, because some requirements are too large to execute in-house in a timely way.
5. Appraisal still has to happen whoever administers the paperwork, so option A misunderstands what is being contracted out.
6. Slowing down enrollment would be a cost rather than a benefit, which rules option D out.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 8 "Managing Human Resources and Labor Relations", section Outsourcing HR and Technology_
Related questions
A firm adopts a skills-based approach to hiring. What does it now weigh less heavily?What does hiring for fit require of recruitment and selection?What does corporate culture refer to?Which routine HR tasks are now commonly handled by technology?Besides cost and expertise, which situation pushes a firm to outsource an HR activity?What must happen for an organization to turn employee diversity into a competitive advantaWhich outcomes does employee diversity produce for a firm?A set of unique features that the target market sees as superior to the competition is kno