REACTION PAPER

Proponent : RHIZA S. APERIN

Program : Master in Management major in Business Administration

1. The key drivers for outsourcing HR outlined in this report are:

As the business world becomes increasingly competitive, it is essential to maintain a
high level of professionalism. This requires addressing several challenges, including
talent acquisition and engagement, performance management, and compensation. It is
crucial to recognize the importance of hiring the right people, managing them effectively,
and maximizing their productivity.
Another critical aspect of running a successful business is ensuring compliance with HR
requirements. This can be a complex and time-consuming process, but it is essential to
avoid legal issues and maintain a positive reputation.
Finally, financial considerations must be taken into account. Employing a team of HR
executives with individual specializations can be costly, but it is necessary to ensure that
all aspects of HR are properly managed.
By addressing these challenges head-on, businesses can create a strong foundation for
success and growth. It is essential to prioritize HR and invest in the right resources to
achieve long-term success.
2. Outsourcing HR can be a game-changer for small and medium-sized enterprises
(SMEs) and family-run businesses. By outsourcing HR, these businesses can gain
access to professional expertise, systems, processes, and technology that may not be
available in-house. This can lead to improved efficiency and effectiveness of the in-
house HR team, reduced costs compared to hiring a full team of HR executives, and
improved compliance with HR requirements.

However, it's important to note that outsourcing HR also comes with potential threats or
limitations. For example, there is a risk of loss of control over HR functions and
processes, as well as the risk of data breaches or confidentiality breaches. Additionally,
businesses may become dependent on third-party providers, which can lead to possible
cultural mismatches between the third-party provider and the organization. Finally, there
is the potential for hidden costs or contract disputes.

Despite these potential limitations, outsourcing HR can be a smart move for SMEs and
family-run businesses. By outsourcing HR, these businesses can focus on their core
business functions, while leaving HR to the experts. It's important to carefully consider
the potential risks and benefits before making a decision, but for many businesses,
outsourcing HR can be a key to success.
3. Small and family-run businesses often face unique challenges when it comes to
managing their human resources. Fortunately, there are several alternative HR
organizing models that can help these organizations overcome these challenges and
thrive.

One option is to establish an in-house HR team with a focus on employee development

and cross-functional collaboration. This lean team can provide a high level of control and
customization, but may not have the same level of expertise or resources as
outsourcing.

Another option is to share HR services with other organizations to reduce costs and
share expertise. While this approach can be cost-effective, it may not provide tailored
solutions to the specific needs of each organization.

Co-sourcing is another alternative that combines in-house HR with external support for
specific functions or projects. This approach can provide a balance between in-house
control and external expertise, but may require more coordination and communication.

Finally, virtual HR teams use technology to manage HR functions remotely. This

approach can be highly efficient and cost-effective, but may not provide the same level
of personal interaction and support as in-house or co-sourced HR teams.

Ultimately, the strengths and limitations of each alternative HR organizing model will
depend on the specific context of each organization. By carefully considering their
unique needs and goals, small and family-run businesses can choose the approach that
best fits their needs and helps them achieve success.