How to balance risks and benefits and exploit the potential for value creation.Review of the theory

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In the latest thirty years, outsourcing has deeply revolutionized the life of the firm, through benefits, risks and challenges that have reshaped the traditional organizational structures: the promise of advantages in terms of cost, quality,resources and competences, agility, flexibility and speed has challenged the current organizational structures.  It has been the case for the outsourcing of HR functions.  Differently from the outsourcing of the primary activities of the value chain,HR outsourcing has a double role.Like all the other departments of the firm it is required to operate according to efficiency, towards the overall profitability purpose of the firm, therefore, it can be the target for downsizing or outsourcing practices.Furthermore, the HR department is supposed to support the firm in performing the same analysis for the remaining departments.These requirements force the HR department itself to operate according to efficiency, but also to support the other departments in doing the same.HR department must support the business in the new role of "HR business partner".It requires new competences, which are often missing within the traditional HR offices.These new competences are business understanding, strategic orientation, efficiency, effectiveness and flexibility, which are very different from the traditional ones focused on compliance and bureaucratic processes.Even if these new competences are present within the traditional HR department it would be extremely difficult for the same HR staff to perform both the roles, it is likely that at the end one of the two will prevail.
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