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(I) Project Initiation: At the first stage, the need for outsourcing HR activities has been identified, specific area of HR activity that need to be outsourced, and proper plan and time duration of its completion has been set.

(II) Strategic Consideration: After the successful completion of the first stage, second stage is started where cost-benefit analysis is done to assess the risk associated with each HR activity, which is considered for outsourcing.

(III) Vendor Evaluation: At this stage, external service provider's proposal is analyzed to identify the gap between the HR requirement and the vendor service responses.

(IV) Corporate Communication: Here, right message is delivered to the right audience, at the right time across the entire organization, and through sharing expectations, employees' fear is reduced.

(V) Contract Management: At the last stage, a contract on business principles of flexibility and cooperative decision making is made that makes way for realistic expectations of achieving cost service benefits. Another plan is also made in order to review the relationship of on-going outsourcing plans.

The Challenges Being Faced

India is making progress by leaps and bounds on one hand, and on the other hand, there are several important challenges being faced by the industry. These challenges are: -

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* Contributed by: -
Sheeba Rehman,
Sr. Lecturer - Management,
IMS, Noida.
Article posted on November 2, 2008.