An investigation of effects of human resource outsourcing on performance of selected parastatals in Kenya
Nyaga, Alex Karani
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Globalization and competition have made organizations to come up with newer management strategies to save on costs and to improve effective use of available resources. Firms have reduced their employees in non-core functions and acquire the same from outside vendors in what is known as the human resource outsourcing. Past researches have concentrated on searching for risk and benefits of human resource outsourcing and the process of outsourcing. Little efforts have been put to find out how the outsourcing strategy has affected the performance of remaining employees and the firm in general. This research sought to find effects of human resource outsourcing on performance among some selected parastatals. The research will benefit outsourcing vendors and their clients to understand the effects of outsourcing on performance. Twenty five out of 126 parastatals were sampled but only 41 responses were received from senior managers in human resource department and those of corporate affairs of the parastatals who had been targeted in this descriptive research design. The questionnaires issued were analyzed using Statistical Package for Social Science (SPSS) to yield both qualitative and quantitative data which were then summarized in frequencies and measures of central tendency. The findings were classified according to study objectives. The study concluded that outsourcing improved the social responsibility and corporate image as well as productivity but did not reduce costs. The researcher recommended that outsourcing should be done in a benevolent way so that it does not affect the workers negatively. Areas for further research were proposed.