Date of Award


Document Type

Master Thesis

Degree Name

Master of Arts


School of Business

First Advisor

Dr. Deirdre O'Donovan


Outsourcing some or all Human Resources functions is a part of a growing trend. Organizations have different reasons to contract HR to an outside provider such as to save money, focus on strategic Human Resources, improve compliance, gain access to skilled HR professionals, or take advantage of technology. This thesis focuses on the outsourcing of Human Resources activities and possible impacts on organizational performance. Due to the large amount of multinational organizations with presence in Ireland, the research focused on outsourcing of HR functions in multinational organizations.

Two different types of questionnaires were conducted targeting Human Resources professionals and Line Managers. Analysis of the questionnaire responses resulted in the identification of a number of findings. One of the findings shows that organizations that have high salary expenditure can reduce their costs with up to 30% by outsourcing mechanical HR activities such as recruitment and payroll.

Another finding concerns with the collaboration of the HR department and Line Managers and the causes for inability of HR people to effectively address employees’ inquiries. It shows that HR employees in multinational organizations with presence in Ireland have the expertise to deal with inquiries but do not have the time to address all employees and management issues due to excessive workload.

A third finding of the questionnaires highlights that HRO has impacts on Line Managers’ responsibilities. The research shows that Line managers are responsible for some HR duties and a different management skillset is required as a result of the contracted HR activities.

A fourth salient finding discusses the effects as a result of recruitment services provided by an outside HR vendor. The research shows that people hired by recruitment agencies are more likely not to fit in the corporate culture of the organization which results in them being less confident and less engaged in their work compared to employees hired from an in-house recruiter.


Submission for the Award of Master of Arts in Human Resource Management

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