The influence of business strategy on the decision to outsource human resource activities

Purpose – This paper seeks to examine whether the decision to outsource human resource (HR) activities and the performance of the HR department are influenced by the particular business strategy espoused by the organisation. Four distinct strategies are considered: quality‐based, proactive, breadth, and reactive.Design/methodology/approach – The data for the study were obtained from survey responses from 232 organisations, of which 113 were engaged in HR outsourcing.Findings – The findings suggest that there is a significant relationship between organisations with proactive strategies and the decision to outsource both traditional and transactional HR functions. Breadth strategies demonstrate a negative significant relationship with outsourcing of traditional functions. Outsourcing of both functions has a significant relationship with HR performance – traditional with a positive impact and transactional with a negative impact.Research limitations/implications – The paper focuses on the perceptions, knowle...