Outsourcing, contracting-out and the use of labour hire all have potentially dramatic consequences for HRM and human resource development in particular. Advocates of outsourcing have traditionally warned that outsourcing and related strategies should not be seen as simply cost-cutting exercises. Nevertheless, cost reduction continues to be a major motivation for many employers. While there may be short-run cost benefits associated with outsourcing, there appear to be longer term costs associated with declining employer-funded training, skills losses, and reduced employer commitment to human resource development generally, and declining employee loyalty, trust and commitment.
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