Motivations for HR outsourcing in Australia

The aims of this research are twofold; first, to determine which human resource (HR) functions are most commonly outsourced in Australian organisations and second, to explore the motivation to outsource these HR functions. Results from a nationwide survey identified recruitment and selection, training, occupational health and safety, payroll and employee benefits as the top five outsourced HR functions. The three common reasons to outsource these functions were to acquire specialised HR capabilities, improve quality and efficiency, and to free resources to concentrate on the strategic role of HR. Four main outsourcing drivers–resources, learning, cost saving and political–were identified, which offer explanations for the most commonly outsourced HR functions. Apart from the learning factor, these are consistent with motivations for outsourcing in non-HR areas.