Human resources outsourcing in Canadian organizations: An empirical analysis of the role of organizational characteristics, transaction costs and risks

The main objective of this study is to evaluate the influence of three classes of determinants using a sample of 271 Canadian Organizations, namely: (1) strategic and organizational characteristics; (2) transactional variables; and (3) risk factors on human resource outsourcing. Using an ordered probit statistical analysis, the results show that a strategic implication on the part of the human resources department, support from top managers, prior experience with outsourcing and extensive use of benchmarking in human resources management are positively related to the intensity of Human Resource Outsourcing (HRO). We found some support for the transaction-specific variables, most notably for the complexity and the specificity of transactions. Finally, the study reveals that human and business risks appear to be important drivers of a firm's decision to outsource.