Role of HR Management

Human resource management

Human resource management -The process of managing staff within an organisation. It focuses on the relationship between the employer and the employee.

By being proactive and adopting a long-term think approach, managers may seek to affect and improve a diverse range of human resource issues within the business. E.g. policies and practices, employment performance review techniques and training. The business must also develop appropriate performance review measures to examine the effectiveness and efficiency of their employees.

Interdependence with other key business functions

The operations function work closely with the HR to ensure that the business has  recruited staff with the relevant skills experience.

The human resource is related to marketing as staff must be motivated and skilled to develop products. It is also through marketing that businesses’ are able to determine the skills required for employees to produce the desired product.

The human resource is related to finance as budgets are often established that allocate funds towards training and  workplace education issues.  Human resources must also work within these budgets to  provide for the needs for its employees. 

 The benefits of adopting a long term (strategic) role to human resources include:

• The development of a highly qualified workforce - more productive and quality

• The employment of a workforce relevant to the organisational needs of the business 

Outsourcing the HR function

Outsourcing the Human Resources (HR) function means transferring some or all HR responsibilities (such as recruitment, payroll, training, or employee relations) to an external specialist provider rather than managing them internally. Many businesses—especially small to medium-sized enterprises or large corporations with global operations—consider outsourcing as a way to focus on their core activities. 

Pros of Outsourcing HR

1. Cost Savings - Reduces the need for an in-house HR department, lowering staff and training costs and Outsourced providers can often deliver services more efficiently due to economies of scale.
   
   

2. Expertise and Compliance - Access to HR specialists who are up-to-date with employment law, industrial relations, and workplace regulations.
   - Minimises the risk of legal non-compliance and workplace disputes.
   
   

3. Focus on Core Business - Frees up managers to concentrate on revenue-generating activities instead of administrative HR tasks.
   
   

4. Access to Technology and Systems - Outsourced providers often supply advanced HR software for payroll, performance management, or recruitment tracking.
   
   

5. Flexibility and Scalability - Businesses can scale HR services up or down depending on growth, seasonal changes, or restructuring needs.
   
   

Cons of Outsourcing HR

1. Loss of Control - HR policies and decisions are influenced by an external provider, which may reduce alignment with the company’s culture and values.
   
   

2. Confidentiality and Security Risks - Sensitive employee data is shared externally, raising concerns about data breaches or privacy.
   
   

3. Impersonal Service - Employees may feel disconnected if their HR queries are handled by a third party rather than someone within the organisation.
   
   

4. Hidden Costs - While initially cheaper, outsourcing contracts may involve additional charges for specific services not included in the standard package.
   
   

5. Dependence on Provider - If the external provider underperforms, the business may face delays in critical HR functions such as payroll or dispute resolution.

Using contractors both domestic (within Australia) and global

A contractor is an individual or business that provides goods or services to another business under the terms of a contractual agreement, rather than being employed directly as part of the organisation’s workforce.

• Contractors are not employees – they work independently and usually manage their own taxation, superannuation, and insurance.
  
  

• They may be engaged for short-term projects, specialised tasks, or ongoing services (e.g., maintenance, catering, IT support).
  
  

• Contractors can be domestic (within the same country) or global (outsourced overseas to reduce costs or access expertise).

Qantas’ Use of Outsourcing & Contractors

• Domestic Contractors:
  Qantas has often outsourced ground handling, catering, and cleaning to Australian contractors. For example, in 2020–21 it outsourced ground-handling jobs at major airports to companies like dnata and Swissport, cutting thousands of in-house positions.
  
  

  • Advantage for Qantas: Lower wage costs and greater flexibility in rostering.
    
    

  • Disadvantage: Union disputes, strikes, and reputational damage as employees and the public criticised the loss of stable jobs.
    
    

• Global Outsourcing:
  Qantas also contracts overseas providers for functions such as IT support, call centres, and some aircraft maintenance.
  
  

  • Advantage for Qantas: Significant cost savings due to lower overseas labour costs.
    
    

  • Disadvantage: Loss of control over service quality and potential safety or customer service concerns.
    
    

3. Pros and Cons for Qantas

Pros

• Reduced operating costs, essential in a highly competitive global airline market.
  
  

• Greater operational flexibility, especially during downturns (e.g., COVID-19).
  
  

• Access to specialist expertise in functions like maintenance and IT.
  
  

Cons

• Industrial disputes and negative publicity (e.g., legal case over ground staff outsourcing ruled unlawful by the Federal Court in 2021).
  
  

• Lower employee morale and job insecurity, reducing loyalty and productivity.
  
  

• Risk of reduced quality in customer service and operations when contractors are less invested in Qantas’ brand values.

2012

1 An accountant decides to use the services of a cleaning company for one day per week. What is this an example of? 

(A) Development 

(B) Downsizing 

(C) Global contracting 

(D) Outsourcing 

5 Which of the following is an entitlement of Australian employees?

(A) Wage increases every year 

(B) Cost of living wage increases 

(C) Minimum employment standards 

(D) New employment contracts every two years

2016

1 A recruitment officer is employed by a business. In which specific business function are they most likely to be engaged? 

A. Finance

B.  Human resources

C.  Marketing   

D.  Operations