Pre-requisites of HR Outsourcing:

Pre-outsourcing Preparations:

These involve evaluation of experiences of the other procurers with same vendor, assessing the culture of the vendor company, critically reviewing vendor proposals, evaluation of a potential strategic partnership, and anticipating staff management problems.

Screen the Prospect's Antecedents: 
The outsourcing firm must perform with due diligence to ensure that the outsourcing firm is visible, reputed, dependable and reliable.

Making Outsourcing Really do its Job: 
Managing the negotiation for contract and managing the contract with by embedding with certainty and flexibility.

Insure the Likely Risks: 
This includes assessing the risk of outsourcing by including liability management in the contract and ensuring proper insurance against the same, proper communication with the employees regarding the unexpected costs and possibility of low quality services and the contingency plan against counter party risk.

Sensitize Employees on Returns to Outsourcing: 
Communicating the plan of outsourcing to all those who are likely to be affected, directly or indirectly, by the proposed outsourcing along with benefits thereof, and its impact on pay and career mobility, preferably through employee forums to minimize it well.

Managers to Become 'Alchemists': Alchemists are people who create something out of nothing, who make their dreams come true. They are passionate about what they do, believing it to be important for the world. To manage and work with people who lack long-term vision, the manager needs to build into organizations a culture of trust and control via 'outcomes' rather than by checks on the process. The manager needs to give more space to employees to make a difference, rather than follow the custom. Managers need maturity and grit to manage outsourcing activities.