Abstract

This research assessed the extent of outsourcing service provision and use in Hungary. Clear differences are noticeable in the way different businesses use Human Resource Outsourcing (HRO) practices. While large organisations tend to outsource operational HR tasks, small firms often outsource full HR functions. The research evidenced cost considerations and the search for external expertise as the main drivers behind outsourcing decisions, but additional reasons included acquiring technology, minimising risks and internal bias. Performance assessment criteria for outsourcing cooperations emerged as critically difficult to agree. HRO as a business model is a solution with significant potential. The Hungarian practice was found to be similar to that of the Western territories beside lower demand, especially among small companies, which stems from the unfamiliarity with the practice. Further research is required in the field to address the perceived low demand and sophisticate the practice to attain a brighter outsourcing landscape in Hungary.