Explore the primary considerations beyond cost savings when deciding to outsource business functions. Expert insights for SHRM-SCP certification exam prep.
Table of Contents
Question
In addition to projected cost savings, which should be a primary consideration when determining whether to outsource a business function?
A. Rate of customer acquisition
B. Timeline and action plan
C. Effect on employee morale
D. Organization size
Answer
When determining whether to outsource a business function, the most important consideration beyond projected cost savings is C. Effect on employee morale.
Explanation
While cost savings are often a major driver for outsourcing decisions, it’s critical to thoroughly evaluate the potential impact on the morale and engagement of the existing workforce. Outsourcing can sometimes be perceived by employees as a threat to their job security or career advancement opportunities within the organization. This can lead to decreased motivation, productivity and loyalty among remaining staff.
Before moving forward with outsourcing, HR leaders should carefully assess risks to employee morale and retention. Transparent communication is key to help employees understand the rationale and reassure them about their roles. HR should work with leadership to implement strategies to maintain an engaged workforce, such as redeploying affected employees to other business areas, providing learning and development for new skills, and reinforcing the company’s commitment to current staff.
The other factors listed, while relevant, are less critical than employee impact:
A) Rate of customer acquisition is more of a marketing/growth metric than an HR consideration
B) Having a solid timeline/plan is important for successful outsourcing execution but not the primary decision factor
D) Organization size may influence outsourcing feasibility but is not itself a key decision criterion
So in summary, when evaluating outsourcing beyond the numbers, always prioritize the human element and manage workforce morale proactively.
An HR professional primarily considers the effects of outsourcing on employee morale. Outsourcing can cause employees to feel betrayed. Long-term consequences include increased voluntary turnover and decreased innovation, which create additional costs that can offset projected cost savings.
Rate of customer acquisition should be considered when a vendor is selected and the service contract is drafted. This will ensure the vendor is able to appropriately meet the needs of the organization and its customer base. The outsourcing timeline and action plan is a logistical effort that would be planned after the organization determines whether outsourcing is appropriate. Organizations of all sizes use outsourcing, so size does not dictate whether outsourcing is an appropriate business decision.
SHRM Senior Certified Professional (SHRM-SCP) certification exam practice question and answer (Q&A) dump with detail explanation and reference available free, helpful to pass the SHRM-SCP exam and earn SHRM-SCP certification.