TO: Dr. Andy Chan
WONG KWOK HO
11551755G
26 April 2014
1. The emerging industry - Human Resource Outsourcing in China
1.1 Background
A strong business presence in China is now important for companies with global insight. Following the recent five-year plan, China is now having a strong desire to build its services industry while flourishing on its manufacturing industry. Services industry is believed to be more value-added which may assist China to escape from the middle-income trap. Business Process Outsourcing (“BPO”) services industry and in particular Human Resource Outsourcing (“HRO”) industry, is quickly expanding and maturing.
1.2 HRO
HRO stands for companies outsourcing some of their internal HR functions to a HRO company according to their own needs or interests with the purpose of reducing the labor cost, aligning with their strategic plan and improving their work efficiency. Services provided by HRO companies include payroll/ compensation / benefits administration, training and development, personnel and employee relationships management, labor security legal consulting, etc. By shifting these relatively trivial procedures to HRO agents, the internal human resources department of the company can stay their focus on strategic planning and making better use of the internal human resources in other way without affecting the moral and loyalty of the employees.
1.3 The Rising Trend
The Chinese business has undergone some significant changes in recent years, the rising of HRO is inevitable. Chinese companies are struggling with how to scale their labor pool. Nowadays they have to tackle with the major double challenges which are the compliance in a complex regulatory environment and talent management in a fiercely c...
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...ers from becoming part of the city and stopped them to enjoy the city’s basic social welfare. They are not eligible to enjoy local childcare, education, housing, medical or unemployment benefits. If they would like to make use of such benefits that enjoyed by urban residents, e.g. schools or hospitals, they must pay and additional “usage fees”. The amount of such fees is often up to their annual salaries. This unfair system also reduces their incentives to work in urban cities.
Reference:
1. http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20140201000011&cid=1103
2. https://www.imf.org/external/pubs/ft/fandd/2013/06/das.htm
3. http://www.nytimes.com/2014/03/11/business/international/china-strike-illustrates-shift-in-labor-landscape.html?_r=0
4. http://www.businessweek.com/articles/2013-11-19/scrapping-the-one-child-policy-wont-solve-chinas-worker-shortage
5.
Global outsourcing first became popular in the apparel and textile manufacturing industries during the late 1960’s and 1970’s. Then it continued with automotive, computers, electronics, and other forms of assembly work during the 1980’s. Most recently, during the 1990’s, now and also in the future the outsourcing is focused on ‘knowledge’ work such as work in software design, technical support, telemarketing, call centers, and back office work. By the end of 2009 Information Technology outsourcing (ITO) revenues were over US $250 Billion while for Business Process Outsourcing (BPO) were more than US$ 140 billion. By 2006, over 200 firms from the Forbes 2000 companies and almost half of the Top Global 250 had offshored IT and business process activities. By 2008 India was managing 65% of the ITO and 43% of the BPO market. In general, India, China, Latin America, Philippines and Mexico have been the top locations for offshoring. The United States is a major player in the offshoring of IT and business process, however, Europe is also catching up. The growth of global sourcing sparked due to the technological advances in the telecommunications industry and the internet w...
With the United States’ economy in a depression and our unemployment rate skyrocketing to record highs, job-outsourcing has moved to the top of the list of controversial issues. Froma Harrop’s essay New Threat to Skilled U.S. Workers and Thomas Friedman’s essay 30 Little Turtles discuss two different viewpoints of job-outsourcing, and their effects on society. Does our government really want to cut back on job-outsourcing, and what can society do to help the issue? Friedman’s standpoint on job-outsourcing shows how it is emotionally beneficial to other countries and Harrop’s factual standpoint shows job-outsourcing regulation, however, I feel that our citizens are unaware of the opportunities and our government is eager to send the jobs overseas.
Outsourcing has only very recently become an issue in the United States, and as a result it has become a very popular political issue during campaigns for presidency. Outsourcing is the idea that a company will subcontract to a third party, usually outside of the US, for various parts of its business structure. An example of this and perhaps the largest source of outsourcing is call centers for tech support, where a company will subcontract to a third party and that party will build up the call center and hire the workers for it. Many people have been affected by outsourcing since it started being used widely in the 1980s, and most would argue that outsourcing is not a good business model, that while it not only negatively affects them, it affects the whole economy. While there are some unmistakable positives to outsourcing, I would argue that as a whole, the negatives far outweigh the positives and outsourcing is bad for the United States.
Did the major companies in America not think of global competition as they started to expand their operations and increase the salaries of the workers? Why is it such a hot topic now, why didn't this act of outsourcing start long ago? What effect does outsourcing have on the American economy, will we be able to stop this trend, and if so what will be the effect. In this paper I will be looking at and discussing why companies are outsourcing the jobs overseas. What benefits that companies are getting out of it, and the problems that face management, as outsourcing seems to be the trend of big business.
Whether an organization consists of five or 25,000 employees, human resources management is vital to the success of the organization. HR is important to all managers because it provides managers with the resources – the employees – necessary to produce the work for the managers and the organization. Beyond this role, HR is capable of becoming a strong strategic partner when it comes to “establishing the overall direction and objectives of key areas of human resource management in order to ensure that they not only are consistent with but also support the achievement of business goals.” (Massey, 1994, p. 27)
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Changing Roles. Traditionally, HR has been an administrative position-processing paperwork, benefits, hiring and firing, and compensation. However, recently HRM has moved from a traditional to a strategic role, the emphasis is on catering to the needs of consumers and workers. Before, HR was seen as the enemy and employees believed that HR’s main purpose was to protect management. Now, the position requires HRM to be more people oriented and protect their human capitol, the staff. In addition, human resource management has to be business savvy and think of themselves as strategic partners in the 21st century.
Ulrich, D., Younger, J., and Brockbank, W. 2008. “The twenty-first century HR organization.” Human Resource Management, 47, pp.829-850.
Zhu, Y. & Warner, M. (2004). “Changing patterns of human resource management in contemporary China: WTO accession and enterprise responses”. Industrial Relations Journal, 2004, Vol.35 (4), pp.311-328. [03 April 2014]
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