HR outsourcing success: does partnership quality variables matter?

Abstract

Recently, increased attention has been paid to partnership quality in outsourcing strategy. However, research of partnership quality on the outsourcing of human resources (HR) is very limited. Therefore, this research aims at examining the relationship between partnership quality variables (business understanding, trust, commitment, communication and top management) and the success of HR outsourcing. The sample is obtained from a cross sectional survey and the sample studied are 96 manufacturing organizations in Penang, Malaysia. Results indicate that most of the organizations that outsourced HR functions were from electronic and electrical industry. The analyses also show that partnership quality variables such as trust, business understanding and communication have significant positive impact on HR outsourcing success. The study concluded that HR outsourcing as a competitive strategy in Malaysia is still relatively new and probably many of its potential benefits are not fully understood. Therefore, by understanding the relationship with the service providers, the organizations are able to achieve outsourcing success by identifying areas of expected benefits and improvements.

Keywords:

• human resource management
• outsourcing
• partnership quality
• outsourcing success

JEL Classification:

• M120
• L140
• L240

Additional information

Notes on contributors

Elaine Ee

Elaine EE graduated with a Masters of Business Administration degree from the School of Management, Universiti Sains Malaysia. Her research work explored the HR outsourcing success from the key users perspectives. She is currently employed in a multinational company in Penang.

Hasliza Abdul Halim

Hasliza Abdul HALIM PhD is currently a Senior Lecturer in Organizational Behaviour Section, School of Management, Universiti Sains Malaysia. She obtained her PhD from University of Malaya, Malaysia. Her research interests include strategic HRM, strategic management, business strategy and HR outsourcing.

Thurasamy Ramayah

Thurasamy RAMAYAH is currently a Professor at the School of Management in USM. He teaches mainly courses in Research Methodology and Business Statistics. Apart from teaching, he is an avid researcher, especially in the areas of technology management and adoption in business and education. His full profile can be accessed from http://www.ramayah.com