Reviews of business processes have led many organisations to decide that it makes business sense to sub-contract some or all non-core activities to specialist providers.
HR, as a non-profit centre, is an obvious candidate for outsourcing.
There are many ways in which outsourcing human resources can be done
Business process HR outsourcing (also known as BPO), where an external supplier manages discrete HR activities, such as payroll administration or recruitment, or perhaps the whole human resources function.
Shared service HR outsourcing, where only the transaction or administrative elements of HR’s activities are subcontracted to an external supplier. This may include the personal interface with employees.
Application (and facilities) service HR outsourcing, where external providers look after the technological (and physical) infrastructure to support human resources activities.