Human resource department in every company is tasked with various functions to ensure the company achieves its goals and objectives. The division has to oversee employee payments and filing of taxes, staff recruitment, and selection, training and development as well as employee health and benefits. Additionally, it also maintains keeping records, maintaining legal compliance as well as other human resource functions. Employee recruitment and selection involves outsourcing and insourcing, employee training and development and employee termination from work. In light with this, the research will examine the consequences of outsourcing for employees who are out of work in a bad economy, if terminating poorly performing existing employees and the effects of terminating poorly performing employees.
Sourcing for employees who are out of work in a bad economy has its benefits to the company and its activities. Employees from such economies may provide the company with quality skills and competency for work (Bass et al., 2018). Additionally, the firm may improve its efficiency thereby streamlining some of its essential functions as well as enhancing the workforce productivity. Moreover, such employees will be willing to work on a reasonable wage rate within the existing wage laws and enabling the business to reduce its fixed expenditures. (Afshan et al., 2018). Employees from such economies will be more productive thereby able to tackle new challenges and consequently improve their skills. The Company will save on the overall head costs of employing many unqualified employees thus save on additional recruitment costs (Szierbowski-Seibel et al., 2018). However, employers must ensure the workforce being introduced to the company can work according to the company’s guidelines and regulations.
Termination of employees should be done appropriately and as per the existing state laws. It is advisable to replace poor performing employees after finding good employees for the work. Poor performing employees are a liability to the company as they slow down the process of achieving the set targets and objectives (Lee et al., 2018). Additionally, good replacements will help to reduce additional costs such as training of employees to acquire the required skills and also minimize losses made from wastage and unnecessary accidents from employees. The management will have adequate time to restructure their departmental functions to match the organization’s functions (Lee et al., 2018). Moreover, customer service will be enhanced as other employees will work hard to give the best output in production thereby improve the quality of work done.
Terminating employee has an impact both on the terminated employee and to the company as well. Although employers have the right to lay-off employees at any given time, they should consider some ethos in termination (Banker et al., 2015). Terminating employees can lead to the destruction of company reputation as some employees may decide to damage the status of the company through word of mouth or social media. Additionally, some retained employees may start retaliating and engage in industrial actions as they protest of job insecurity fearing to be the next victim. A terminated employee can seek to sue the company of unnecessary termination or breach of contract terms in contract-related job types (Banker et al. 2015). The company may incur additional costs such as legal fees to settle the dispute or payment to the employee due to wrongful dismissal.
Moreover, the company can lose its property or some of its vital secrets as some employees may trade the company secrets to their competitors thereby risking the competitive advantage of the company. Company property such as files, keys to special rooms or computers can be lost as some employees can leave the company without returning those (Barker et al., 2015). Moreover, the company can face high turnover costs as employees may willingly resign in such jobs due to their fears and uncertainty of the workplace.
Afshan, G., Abbas, A., Hussain Khan, I., & Naeem Shahid, M. (2018). Predictors and Consequences of Human Resource Outsourcing; A Quantitative study of Higher educational institution of Baluchistan, Pakistan. European Online Journal of Natural and Social Sciences: Proceedings, 7(1 (s).
Banker, R. D., Lee, S. Y., Potter, G. S., & Srinivasan, D. (2015). An empirical examination of the impacts from termination of a performance-based incentive plan.
Bass, J. M., Sarah, B., Razzak, M. A., & Noll, J. (2018, May). Employee retention and turnover in global software development: comparing in-house offshoring and offshore outsourcing. In 2018 IEEE/ACM 13th International Conference on Global Software Engineering (ICGSE). IEEE.
Lee, S. (2018). Employee turnover and organizational performance in US federal agencies. The American Review of Public Administration, 48(6), 522-534.
Szierbowski-Seibel, K., & Kabst, R. (2018). The impact of HR outsourcing and strategic HR integration on the HR-to-employee ratio: An empirical evaluation of the HR function over the last decade. International Journal of Manpower, 39(2), 283-300.