In the US, most areas in the HR domain have several specialist companies operating. In view of this, many organizations outsource large portions of their work and do limited high value work in-house. Here, HR departments play a role of being a contact point, a change agent, project manager and facilitator in people management.
In India, professionals feel that human interaction plays a very important role for the HR function and they feel hesitant to outsource their key people processes and a lot of these initiatives are kept in-house. Additionally, the level of specialization from the service providers’ community has also not gone up to the desired level because Indian corporates still look at a value for money proposition. At the end of the day, the cost of managing HR services in-house has not grown to the point that creates a business case for a different delivery model. As the level of specialization required rises, and as the difficulty of attracting talent to the HR function increases, we will see an increasing need for HR outsourcing services and emergence of new delivery models with respect to people management.