1. Outsourcing as an HR Strategy OS652 Fisher September 21, 2004

2. Agenda Appropriateness of outsourcing Different types of outsourcing Metrics for measuring success of outsourcing What can a line manager do to improve the effectiveness of outsourcing or other non- traditional employment relationships?

3. Alternative models of obtaining labor Can bring employees into the organization – Part time employees – Seasonal or temporary employees – Consultants/contractors Or wholly outsource functions or parts of functions Outsourcing vs. offshoring No longer just relegated to administrative or manufacturing work – Service industries, especially in India – Professional and management services also involved (now 11% of the temp workforce according to BLS)

4. How to choose the best model? Issues with outsourcing What is the purpose? Is it always appropriate? Is the decision making model described by Stroh and Treehuboff applicable to other business functions?

5. Discussion Question How does the use of temporary employees and outsourcing help an organization with its HR planning? What are the potential disadvantages to this approach?

6. Metrics When is outsourcing a success? – Financial savings – Speed to market – Increased productivity Short term vs. long term measures

7. Implementing an Outsourcing Plan Axcelis Technologies in Beverly, Mass. outsourced some engineering jobs to India – Concerned that US workers might resent Indian workers – Hired an Indian-born trainer to provide cultural awareness training Other aspects of training or change management? What can line managers do to ease the transition? Source: Tam, P. (May 24, 2004). Outsourcing sends U.S. firms to trainer. Wall Street Journal, page B1.

8. How does contingency affect the workers? Some research suggests that There are few differences between contingent and traditional workers on cooperativeness, organizational commitment, and demonstration of citizenship behaviors Differences are more pronounced when contingent status is involuntary (Van Dyne & Ang, 1998)

9. Blending labor sources What happens when traditional employees work side-by-side with non-traditional employees? Blending can adversely affect employee- management relationships (Davis-Blake, Broschak, and George, 2003) Use of temporary workers appears to be more threatening to traditional employees than when contractors or consultants are used

10. For next class Topic: Recruiting Read – Chapter 7 pages 229-250 – The Job Seeker ’ s Experience (link from course schedule) Mid-term exam questions will be distributed on Thursday (due Oct 7)