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The Role of Transaction Costs and Institutional Forces in the Outsourcing of Recruitment
Author(s) -
Dasborough Marie,
SueChan Christina
Publication year - 2002
Publication title -
asia pacific journal of human resources
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.825
H-Index - 33
eISSN - 1744-7941
pISSN - 1038-4111
DOI - 10.1177/1038411102040003255
Subject(s) - outsourcing , transaction cost , business , agency (philosophy) , knowledge process outsourcing , industrial organization , function (biology) , institutional theory , agency cost , principal–agent problem , service (business) , business administration , marketing , economics , finance , management , corporate governance , philosophy , epistemology , evolutionary biology , biology , shareholder
This study investigated reasons for the outsourcing of a core HRM function, recruitment. Drawing from transaction costs and institutional theories, it was hypothesised that the pressure to minimise transaction costs and the presence of industry trends towards outsourcing would be positively associated with the outsourcing of recruitment. Survey data were gathered from 1I 7 HR professionals in Australia. Both hypotheses were partially supported. Specifically, the outsourcing of recruitment activities was positively associated with trust in the agency supplying the recruitment service and with the need to reduce internal labour but not fixed costs. With regard to institutional theory, the outsourcing of recruitment was positively associated with mimetic but not coercive forces. The study concludes that although most assumptions about recruitment agency use are expressed in economic terms, in reality, HRM practices are also influenced by forces exerted by the institutional environment in which organisations are located.