Development and Test of a Model of External Organizational Commitment in Human Resources Outsourcing

uman resources outsourcing is the fastest-growing outsourcing segment (Dell, 2004). HR outsourcing takes place when a company contracts with an HR vendor to perform an HR activity previously performed by the company (Greer, Youngblood, & Gray, 1999). Forecasts predict that HR outsourcing will continue to grow by more than 30 percent so that the global expenditure on HR outsourcing in the United States will reach $14 billion by 2009 (Yankee Group, 2005). Today, HR outsourcing involves more than outsourcing HR services such as payroll administration. Instead, HR outsourcing plays a strategic role as organizations are outsourcing HR activities such as training and selection and, in some cases, even the total HR function (Adler, 2004; M. F. Cook, 1999; Greer et al., 1999; Lepak & Snell, 1998). Most prior studies have used transactioncost economics theory (Williamson, 1996) for investigating specific factors that influence the initial decision to outsource HR acDEVELOPMENT AND TEST OF A