Exploring the effectiveness of outsourcing recruiting and training activities, and the prospector strategy's moderating effect

Abstract

This study examines the relationships between the decisions to outsource the company's recruiting and training activities and the effectiveness of these decisions. This study also argues that the decisions in outsourcing human resource management activities should align with the company's strategy. Collecting data with time lag from multiple respondents in 125 representative Taiwanese firms, we find that outsourcing recruiting is positively related to line managers' perceived human resource function effectiveness. However, we fail to find any relationship between outsourcing training and human resource effectiveness. The prospector strategy is also found to positively moderate the relationship between outsourcing recruiting and human resource effectiveness. However, the prospector strategy does not significantly moderate the relationship between outsourcing training and human resource effectiveness. Possible reasons for our findings are discussed.

Keywords:

• human resource effectiveness
• human resource outsourcing
• the prospector strategy

Acknowledgments

We thank Jason Shaw for his thoughtful comments and assistance, as well as the participants' feedback at the 2007 Academy of Management annual conference.