OUTSOURCING OF HUMAN RESOURCE MANAGEMENT SERVICES IN

GREECE

Eleanna (Anna-Eleni) Galanaki, Athens University of Economics and Business

Derigny 12, Athens 104 34, Greece, Tel./Fax No: +30 210 8203475
E-mail address: eleanag@aueb.gr

Professor Nancy Papalexandris, Athens University of Economics and Business

76, Patission Str., Athens 104 34, Greece
E-mail address: papalexandris@aueb.gr

ABSTRACT:
Outsourcing is gaining considerable popularity in the field of business services and
management. This paper illustrates the practice of outsourcing HRM functions, such as
training, staffing, rewards and restructuring, in Greece. The analysis draws upon both primary
and secondary data. The findings of the 1999 CRANET survey and a study on the companies
that offer HRM services in Greece are used to set the frame of analysis. A series of in-depth
interviews with HR managers and senior HRM consultants are used to support the quantitative
data.
The analysis suggests that the Greek market of HRM services is still at an initial stage of
development, with limited credibility, while the customers lack the experience of managing
outsourcing relations and are reluctant to establish a partnership- type HRM outsourcing
agreement. Considerable differences are identified between the Greek market for HRM
services and those of more developed markets. The description of the Greek market of HRM
services can be useful to vendors and users of HRM services, as well as researchers dealing
with outsourcing in small markets.
KEYWORDS: outsourcing, human resource management services, Greece

INTRODUCTION
HRM outsourcing means having a third- party service provider or vendor furnish, on an
ongoing basis, the administration of an HRM activity that would normally be performed in-

house(Cook, 1999:4). HRM outsourcing has grown in popularity since the early 90s,
particularly in the US, where up to 90% of the companies outsource some HRM activity, and

western Europe (William M.Mercer and Cranfield School of Management report, 2000,
Banham 2003, Cook 1999).
A key reason for this growth is that many companies find that the use of outside service
providers is more efficient and less costly than hiring staff to handle these functions in-house.
Given that HRM services vendors specialise in the services they provide to their clients, they
benefit from economy of scale effects and these benefits are transferred to their clients. This
effect suggests that smaller companies may benefit more than larger ones from HRM
outsourcing.
Another reason why some companies may turn to outsourcing is the requirement for
knowhow. Either they have not the necessary knowledge, or their knowhow is so outdated that
they need to make significant investments. Many vendors have already made major
investments in HRM tools and techniques and can spread their costs over many clients. In this
sense, outsourcing provides knowledge and competencies that do not exist in-house.
Prior research (Papalexandris et al. 2001, Mahoney and Brewster 2002) has established that
the human resource services that are outsourced can fall into one of the following four
categories:

Recruitment and selection

Training and development

Pay and Benefits

Merger- Outplacement-Downsizing

We are proposing the additional following categories, which may also be of interest and have
also been repeatedly mentioned in the literature (Cook, 1999)

Performance appraisal systems

HR planning

Organisational climate and culture.

OBJECTIVES OF THIS STUDY

Given this background, this paper examines the following issues:

Which HRM services are mostly used by Greek companies and why?

How much the external HRM services market has developed in Greece?

Is there some particular pattern in the use of outsourced HRM services, which could be
identified?

What is the future for outsourcing of HRM services in Greece?

Before answering these, some background detail on Greece is provided. The Greek Economy
is mainly comprised of small and medium sized companies (Observatory of European SMEs,
2002). The dominance of SMEs (companies with less than 50 employees) and middle-sized
companies (companies employing 50-250 employees) in Greece implies that outsourcing
potentially may have more impact than in other countries, as it allows the small sized client to
enjoy the benefits of the economies of scale achieved by the vendor.
Furthermore, it is interesting to study the development of the HRM services market, under the
light of a somewhat delayed development of the Human Resource Management function in
many Greek companies. In the mid 1990s and in some cases even now, the HRM function in
many Greek companies was performed either by the CEO, or by the financial manager
(Papalexandris et. al., 2001). Therefore, this study may provide insight into how the market
for external HRM services has developed in a country where the Human Resource
Management function is generally still under-developed in-house.

RESEARCH METHOD
Two sources of quantitative data were utilised for the purposes of the current study: the
CRANET Network Survey (1999) and the ICAP Financial Directory (2002). The CRANET
Network Survey, 1996-1999, was run in 25 European Countries and examined the HRM
practices, both cross-nationally and over time. The second source of information, focusing on
the providers of HRM services, was the ICAP Greek Financial directory for 2002, which
gathers the majority of the companies operating in Greece.
The quantitative data were further supported by qualitative analysis. Five in-depth, semistructured interviews were conducted with prominent HRM consultants and professionals in
companies that provide HRM services and another five interviews with top HR managers who
are involved in the decision and management of outsourcing of their companies.

QUANTITATIVE DATA
The CRANET cross-national survey, last run in Greece in 1999, provides information on the
extent of use of outsourcing for the provision of HRM services. Specifically question 2b of the
1999 questionnaire identifies four broad categories of HRM services, namely:
1.pay and benefits
2.recruitment and selection
3.training and development
4.workforce outplacement and reduction

The results reveal that the most outsourced HRM function in Greece is training (60.3%),
followed by recruitment and selection (34.6%). Surprisingly, pay and benefits also appears to
be extensively outsourced in Greece (24.3%), while workforce outplacement and reduction is
outsourced by fewer companies (4.4%)
Figure 1 illustrates the ratings of Greece in comparison with other countries, in terms of the
outsourcing of each of the above HRM services, according to the CRANET results. Table I
summarises the number of countries with a higher ranking in outsourcing of each HR function
than Greece.

Take in Figure 1

Take in Table I
The results suggest that, in Greece, fewer companies outsource their HRM services. This is
most evident in the case of services in outplacement and downsizing, and least in the one of
pay and benefits. Some explanation on these results was revealed by the interviews
conducted with HR Managers, where external collaborators is the exact term in Greek for
HRM providers, in the field of pay and benefits. There, the respondents usually referred to
the use of payroll bank accounts and to the provision of salary surveys. This could be the
reason for the reported high outsourcing of pay and benefits in Greece, according to the
CRANET results. On the other hand, the outsourcing of pay systems design, a service that HR
providers can offer, is not developed in the Greek market, according to the HR managers and
HRM vendors interviewed.
In order to have a clear picture of the other side of the outsourcing relationship, we looked at
data from HR providers. The ICAP Greek Financial Directory (2002), provides representative
data from 22,000 Greek enterprises of all sectors of the Greek economy. Of these, 114
companies whose activity involved services in HRM were identified. Table II summarises the
type of services that are offered by those companies, according to the description of their
activity contained in the ICAP directory.

Take in Table II

Of these 114 companies, 40% were founded within the period between 1996 and 2000 and
22% from 1990 to 1995. Furthermore, 76% of all those companies experienced a profit

growth of up to 700%. Those findings illustrate the recent boost in the sector of HRM services
and call for further, in-depth study.
It should be stressed that the CRANET survey draws information from the companies using
external HRM services, while the ICAP directory provided some aspects of the HRM services
vendors group. Therefore, information was drawn from both parties of the outsourcing
relationship. Figure 2 presents the differences between the findings of the CRANET research
and the ICAP directory analysis.

Take in Figure 2

No particular differences between the proportion of the companies using HRM services and
the proportion of the companies offering such services seem to exist, except for the case of
Pay and Benefits. The slightly higher offer of training and recruitment services, according to
the ICAP directory, could be attributed to the fact that the ICAP directory findings refer to
2002, while the CRANET findings refer to 1999.
In the case of Pay and Benefits, though, many companies use such services (24.3%), while
only 1.7% of the HRM services vendors are specialised in this particular sector. This may be
because these services are currently offered by other providers, such as accountants and
banks. Moreover, the field of pay and benefits services also includes the salary surveys,
which are conducted by one provider for the sake of several clients of the same sector. This
also contributes to a higher percentage of customers as compared to vendors of pay and
benefits services. Greater detail and explication is provided by the qualitative data from the
interviews.

INTERVIEWS
As mentioned above, semi-structured, in-depth interviews were conducted with five
consultants in the area of HRM, and with five HR managers. Companies of all sectors and
sizes were represented in the interviews. The interviews aimed at collecting information and
the personal insights of the respondents on the following issues:

The HRM services commonly outsourced by Greek companies

The reasons why Greek companies outsource HRM

The aims sought for by the companies that outsource HRM

The profile of Greek companies that outsource part or all their HRM services

An insight to the development of the HRM services outsourcing market

5

An evaluation of the quality, reliability, development and competition in the HRM

services sector.

Table III summarises the type of company, the number of employees and the services offered
by each of the HR vendors that were interviewed. The interviews, though only five, covered a
large range of HR vendors: a large multinational consulting firm, two small Greek
entrepreneurial firms, and two consulting firms that lease or are the exclusive representative of
HRM tools of foreign agencies. The spectrum of services that these companies offer varies
from solely training or headhunting to total coverage of all HRM services, including strategic
HRM consulting. The respondents are either partners or very senior consultants within their
company.

Take in Table III

Table IV summarises the type, size and sector of the companies that were examined through
in-depth interviews with the HR Manager/ Director. HR Manager A is the HR Director of a
large transport and cargo company; HR Manager B is the HR Director of a large,
multinational car manufacturer; HR Manager C is HR Manager at a very large banking
group, employing 7000 people and HR Manager D is the HR Manager of a medium-sized
Greek textile manufacturer. Finally, Manager E is a Senior Line Manager of a large Greek
pharmaceutical company that does not have an HR department, so the HR functions are
carried out by the line.

Take in Table IV

Profile of Companies outsourcing HRM activities

From the interviews it came out that the profile of the companies that outsource HRM services
is mixed. Many companies that outsource HRM services are medium-sized companies that
cannot offer those services in-house. However, most of the HRM vendors interviewed
reported that their customers include large, mainly multinational companies.
A major finding of the interviews was the identification of different patterns of HR
outsourcing, particularly in relation to the size of the outsourcing company. The interviewees,

when asked about the profile of the outsourcing companies, identified three main groups of
companies that outsource HR services.
A typical group consists of smaller companies, which dont find it necessary to have an
internal HRM department and instead outsource their HRM functions. This is the case
described by HR Manager D, where the company from small entrepreneurial became part of a
larger group of companies. In this transition, all the HRM functions were provided by an
external consultant, who also dealt with the problems raised due to the acquisition. After the
transition was completed, HR Manager D took up the HRM function.
HRM vendors B, C and D also referred to a new trend, i.e. total outsourcing of the HRM
function, whereby experienced HRM professionals, at the peak of their career, leave their
company in order to offer tailor-made HRM services to three or four other, smaller companies.
Their client companies typically do not need a permanent, full-time HR manager, and thus
benefit from the services of an experienced HRM professional handling all their HRM
matters. They usually treat this person as a partner, and expect him/her to develop
considerable insight into the companys vision and strategy. There is no employment relation
between the company and the HRM professional, but rather a loose contract for services that
stipulates some preferential treatment of the company by the HRM consultant. Four such
cases were reported during the interviews.
Another group of outsourcing companies comprises companies employing 150-250
employees. These have an HRM department, but may outsource some particular HR services
in order to save time for their HR staff. They dont seek for highly sophisticated services and
they mostly outsource off-the-self services, in staffing, training and employee surveys.
According to HR Vendors A, B and C, scarcely will the companies in this size group seek for
tailor-made services, due to the cost that such services involve.
The last size group of companies comprises larger companies (with more than 250
employees). According to Vendor A, these are more demanding customers, looking for more
sophisticated services, that will also need to be tailored to their particular needs. They are
more willing to pay for innovation and experience, since their budget allows for it and they are
themselves more knowledgeable in HRM issues. However, in very large companies, such as
the large banking group of 7000 employees for which HR Manager C, works, do not make
much use of HR outsourcing services. Their HR departments are well developed, enough to
deal with most HRM needs. They therefore only outsource very sophisticated, innovative
services, for which they lack the knowhow in-house.
The ideas expressed during the interviews, with both HR vendors and HR managers, on how
companies of different size outsource HR services point to the type of the relationship that

usually exists among the size of the outsourcing company and the type of HR outsourcing (see
Table V). As reported over and over by respondents, two major variables seem to characterise
this relationship:

Sophistication of the HR service, which presents the extent to which the vendors services
are up-to-date, innovative and theoretically sound

Customisation, which signifies the extent to which the HRM services are customised to
the particular needs of the customer (tailor made services)

An additional feature of HR outsourcing is the frequency and types of HR services

outsourced. We are presenting this feature under the column Description of HRM
outsourcing in Table V, as follows.

Take in Table V

As shown in Table V and according to the Interviews, we can claim that smaller medium
companies outsource a large part of their HRM function but the HRM services they seek are
not particularly sophisticated or innovative. It appears that for smaller companies a much more
general background is needed.
Larger middle-sized companies mostly outsource separate, basic HRM services, because their
HRM department covers most of their needs for HRM and they probably cannot afford more
sophisticated, external HRM services.
Large companies outsource in order to cover their need for sophisticated and innovative
services that they cannot procure in-house, but as the size of the company increases,
especially in multinationals, outsourcing decreases because the companies develop more
specialised HRM services in-house. The branches of multinationals also tend to outsource
HR services in global HR vendors to whom their companies outsource HR services at
corporate level.
Current Development of the HRM Services Market
The above-mentioned categorisation of the needs of companies of different size for HRM
services was further developed in the interviews where both the HRM vendors and the HR
managers interviewed agreed that the Greek market for HRM services is divided into:

One group of HRM vendors that follow the advancements in the HRM service sector
abroad, take considerable initiatives for quality improvement and innovation, constantly
train and develop their staff, are characterised by credibility and trustworthiness and

usually offer services with a wider strategic focus. These companies often are national
divisions or representatives of foreign groups of consultants. The cost of the services
offered by those HRM vendors is usually high, so their client base includes mostly the
multinational and large Greek companies, which can both appreciate the services offered
and can afford the price.
The other group of vendors competes mainly on price, not quality. They serve a client base
that is not so knowledgeable on HRM issues, coming mostly from the medium-sized Greek
companies. These vendors are smaller than their counterparts of the other group and
usually cannot undertake projects that require a more strategic view on their clients needs
or imply tailor-made solutions. Moreover, the vendors of the second group mostly offer
services in training, recruitment for low and middle class positions and payroll and
administration. They scarcely offer consulting for the development of performance
management systems or for restructuring and change management, possibly because their
customers are not willing to pay for that sort of services.
The above division in the Greek market of the HRM services is best illustrated in the sector
of training services. According to the HRM vendors offering training services, the market
received a spectacular boost from the mid-80s to the late 90s, due to the European Union
subsidies for vocational training, paid to employers, both as a tax relief and as partial
payment of certain training courses. Unfortunately, the subsidies resulted in a distortion of the
demand for training services. There were companies that would outsource training
programmes just in order to benefit from the European subsidies, and others that would first
assess their real needs and then turn to the external market for the service they needed. These
two different approaches to training ultimately created two groups of training programme
providers. The one group offers tailor-made training services, actively trying to participate in
the stage of assessment of the training needs of its clients, while the other offered custom
training programmes, identical to the European Unions subsidies specifications, without
considerable adjustments to fit the particular needs of the client.
Future Development of the HRM Services Market
All the respondents expressed the conviction that the market of HRM services will grow
further in the future. However, in the case of HRM vendors, this view varied according to the
sector in which each one operates. For example, HRM vendor D, who is currently specialised
in training and has abandoned the area of headhunting he initially operated in, considers
training as more promising for the future. In contrast, HRM vendor E, a specialised headhunter
who has abandoned the field of training, regards this field as more problematic, because
Greek companies still lack a developmental/strategic view over training, with the

result of not being willing to pay for holistic, tailor-made training programmes. However,
both vendors D and E appear to have been forced to take up more specialised-focused services
and to limit the spectrum of their services. Given the views expressed by all the senior HRM
professionals interviewed and the specialisation tendency expressed in the cases of both HRM
vendors D and E, it could be assumed that in the future external HRM services will have a
larger turnover in total, with higher specialisation of services for the smaller companies of the
sector.
Main Problems Faced in a Human Resource Management Outsourcing Relationship
The most frequently reported problem in the outsourcing relation among HRM vendors and
their clients is the difficulty of the HR managers to express and describe in detail what they
require from the vendor. This problem could be attributed to the lack of experience in
managing outsourcing relations, the importance of which is also stressed in the relevant
literature (Masten and Crocker, 1985, Joskow, 1987, Harris et.al., 1998, Cook, 1999).
An additional problem, to which most HR managers referred, was that HRM vendors lack the
experience and actually learn on-the-job, with the project they are asked to carry out. As HR
manager A reported we feel that the HRM consultants learn from us, instead of us learning
from them. It sometimes is a loss of time, although we outsource in order to save time. This
is due to the fact that consulting HRM companies usually hire young graduates to carry out
projects that require significant HRM experience. On the other hand, the HRM vendors
reported that it is difficult to recruit experienced HRM professionals for consultants positions.
Smaller companies usually expect consultants to offer expertise on every possible matter and
this places great demands on consultants, especially those of older age. At the same time,
increased expectations by companies make them reluctant to accept younger consultants,
something which explains the remark about the age of providers. This problem could also be
attributed to the lack of maturity of the HRM outsourcing market. If the market was more
mature, more experienced HRM consultants would offer their services, and the consulting
sector would be more attractive to work in.
Finally, adversely to the initial expectations of the researchers and to the prior literature
(Masten and Crocker, 1985, Joskow, 1987), the formulation and wording of the outsourcing
contract does not pose significant problems. On the one hand, the legal nature of such a
contract is clear. It takes the form of a contract for works, which, according to both the HRM
vendors and the HR managers interviewed are not complex to formulate or difficult to agree on.
In fact, there are model contracts for each kind of service a vendor offers, which are only
slightly modified to the specific requirements of each customer. Moreover, according to most
respondents, the form of the contract is loose, because the consent between provider

10

and customer is mostly guaranteed by faith and good will. In any case, the small size of the
HRM market, according to HR manager C is a factor preventing violations of the outsourcing
agreement.

DISCUSSION
The findings of the current study, both from the quantitative and the qualitative data that were
gathered lead to some overall conclusions about the characteristics of the Greek market for
outsourcing in HRM services.
Underdeveloped market
The Greek market for HRM services is still less developed than in most western European
countries. This was confirmed by the CRANET survey and by the interviews. The impression
of most respondents on the low quality characterising most HRM services that are offered
and the feeling that the HRM vendors are learning on the project and from their clients is
indicative of the low development of the market. The fact that the HRM consultants often
lack the necessary experience and knowledge coincides with the recent development of the
market and the fact that 62% of the current HRM vendors were founded from 1995 onwards.
It appears, therefore, that the industry still lacks the experience and confidence of older
service sectors, such as the banking sector or the accounting sector. The low development of
the HRM services market is further expressed in a loose structure resulting in the division of
the market, while the current and potential users of HRM services consider the services
offered as of low quality and believe that the vendors lack credibility and are not well aware
of the nature of the service.
As mentioned at the beginning of the paper, the underdevelopment of outsourcing of Human
Resource Management services may be related to the low and recent development of HRM as
opposed to Personnel Management (Papalexandris et. al. 2001). Indicative of this is the lack of
educational programmes in the field of HRM, where the first Master by a Greek University
was launched in 2002. Moreover, the fact that Greece, with 12 million inhabitants, is a small
country may imply that the small size of the market in general does not allow for considerable
economies of scale to be developed for HR vendors. Therefore, HR outsourcing is developing
slowly, as there are not large profit margins in the market.
Divided market
The major effect of the low development of the HRM services market in Greece is its division
in two segments, as described above. The one segment offers more sophisticated services,
which are priced higher, and are perceived as offering better quality and credibility. This

11

segment targets mostly multinational or larger Greek companies and invests much in keeping
up with the advancements in HRM services internationally. The other segment competes
mostly on prices, is comprised by smaller HRM vendors and serves mostly medium Greek
enterprises, usually offering services in the field of staffing, training and pay.
This division of the market implies that there is a different speed in the diffusion of HRM
outsourcing that could be further attributed to the different pattern of HRM outsourcing by
companies of different size, as expressed in Table V, as well as on an overall division of the
Greek economy. This division is not problematic per se. It could prove problematic, though, in
the case of the Training and Development services, for example, if EU subsidies diminish, so
that the market segment that relies on subsidies could loose balance.
Needs of Greek Companies for Sophistication and Customisation of HRM services
Combining the extent to which the two variables of sophistication and customisation that were
discussed in the previous section are evaluated and needed by companies, we can see the main
tendency according to the companys size, origin and nationality (Greek versus multinational).
Figure 2 attempts to present the leading style of HR outsourcing by type of company, as
revealed from the interviews with our respondents.

Take in Figure 2

Push for more specialisation

It appears that for the smaller vendors of HRM services a trend for specialisation of services
and easier identification by potential customers exists. Possibly this trend expresses the need
for higher quality and sophistication of the service offered and a greater maturity both on the
part of the clients and the vendors.
Dominance of training and staffing services - Low presence of consulting services
Training and staffing, which are the most traditional HRM services offered, cover the largest
part of HRM outsourcing. Consulting in HR policy and strategy is still scarce in Greece,
while the HRM vendor is mostly seen as a provider, rather than a partner of the
company/client.
Loose relations among the two agreeing parties
Another attribute of the HRM services market is the fact that both parties of the outsourcing
transaction count more on good will and trust than on the legal contract. This is because
turning to courts is time and money-consuming for contracts for consulting work in Greece,

while the definition of the service to be provided is often difficult. What is more, the small

12

size of the market for HRM services allows for an indirect control mechanism through fear of
loosing ones credibility.
Unsuitable certification procedure
A further reason why the market mostly lies on trust and on informal control and restraint
mechanisms is the weak regulation of the market for HRM services by the State. According to
all respondents, the Greek State has failed to introduce viable certification criteria for the
companies offering employee training or staffing services, while no certification criteria have
been introduced in the case of other HRM services. The certification process focuses on the
infrastructure of the companies in terms of buildings and technological equipment, while
factors like knowledge and experience of the people offering the service, or the effectiveness
of the systems and processes in place is not assessed. This results in the market not
acknowledging the certification, and the certification failing to promote the most competent
providers of the sector, to the benefit of the customers.

CONCLUSION
Drawing upon quantitative data, i.e. the 1999 CRANET survey on outsourcing of HRM
services and the ICAP financial directory for the year 2002, supplemented with 10 in-depth
interviews with eminent HRM consultants and HRM managers, this study presents the current
state in the market for HRM services in Greece.
The major finding of the study is the somehow limited development of the Greek market for
HRM services, which presents a sharp division in two segments. As the market grows,
however, the need for higher specialisation, better quality, correct certification and
recognition of the segment by the State appears necessary. The respondents expressed the
conviction that the market will develop considerably in the very near future, which is also the
belief of the researchers, given the rapid rate of growth of the market up to now, the overall
development of the HRM function within the Greek companies and the pattern followed in
countries like the United States or the UK (Banham, 2003, Cook, 1999, Mahoney and
Brewster, 2002), the pattern of which is usually followed in Greece.
The present study presented the function of the much-discussed practice of HRM outsourcing
in a country that differs greatly from USA and the UK, where most research on HRM
outsourcing has been conducted. The results suggest that, due to the small size of the market,
the problems and issues raised in Greece differ from those in bigger and more developed
countries. Therefore, different factors may affect the decision of companies to outsource some

13

HRM service in Greece, and the strategy and motivation of both vendors and clients of HRM
services may differ from those in more developed countries.
In a country like Greece, with less developed HRM, one of the major objectives is to improve
HR practices in order to increase competitiveness through people. Given the above, and in
view of the small size of companies, companies may benefit from services, which they could
not be able to create internally. Through appropriate use of customisation and sophistication of
their service, the HR services vendors can become key players in the development of the
HRM function.
The description of the Greek market of HRM services undertaken in this study may be useful
to vendors and users of HRM services, as well as researchers dealing with outsourcing in
smaller markets.
One of the main implications of the study both for HR and line managers is the necessity for
good knowledge about HR in order to be in a better position to identify their own HR needs
and to select the best HRM provider for those needs. Given that the decision to outsource
HRM is not always in the hands of the HR manager and other managers are involved, there is
a need for training and good grip in HRM issues.
Moreover, the current study has indicated that the HR provider has to possess general
expertise and convey a message that he can be trusted for his long years of experience in the
market. Further studies on outsourcing of HRM services should focus on the way decisions to
outsource HR are reached by companies, the criteria for selecting providers, the effectiveness
of services offered and the overall role of HR consultants in developing the HR function in
Greece.

References
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2. Cook, M., 1999. Outsourcing Human Resources Functions. Strategies for
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4. ICAP, 2002. Greek Financial Directory. ICAP. Athens

14

5. Joskow, P., (1987). Contract duration and relationship-specific investments: empirical

evidence from coal markets. The American Economic Review, Vol. 77, N. 1, pp. 168-185
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candidate countries. Luxembourg: Office for Official Publications of the European
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10.Papalexandris, N., Chalikias, J. and Panayotopoulou, L., (2001), Comparative Research
in Human Resource Management Practice in Greece and the European Union. Editions
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Outsourcing. Research Report, June 2000

15

Figure 1: 1999 CRANET Research Findings on HRM Outsourcing by Country

90%
85%
80%
75%
70%
65%
60%
55%
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%

Outsource Pay & Benefits

Outsource Training & Development

Outsource Recruitment & Selection

Outsource Workforce Outplacement/ Reduction

17

Table I: Countries ranking higher in outsourcing than Greece, by HRM service

HRM services

No of countries outsourcing more than Greece

Training & Development

16 out of 26

Recruitment & Selection

16 out of 26

Pay &Benefits

9 out of 26

Workforce Outplacement/Reduction

21 out of 26

Table II: Companies operating in the Greek HRM services market

No. of
% of
Services Offered

Companies

Recruitment & Selection Services

42

Companies
36.84%

Seminars & Training Services

79

69.30%

BPR and Merger Consulting Services

3.51%

General HRM Consulting

12

10.53%

Salary Surveys and Pay

1.75%

HRM Information systems

2.63%

18

Figure 2: Findings from CRANET and proportions in the ICAP directory, under the section of
HRM services providers

Pay and Benefits

24,30%
1,75%

4,40%

Merger- OutplacementDownsizing

3,51%

60,30%

Training

69,30%

34,60%

Recruitment
& Selection

36,84%

0 %

1 0 %

2 0 %

3 0 %

4 0 %

5 0 %

6 0 %

7 0 %

8 0 %

CRANET data- Proportion of companies that use the service

ICAP data- Proportion to the total HR services providers market

Table III: Interviews: Group A- HRM Vendors respondents

Position

Senior
Vendor A
Consul

Type of Company

Multinational

Persons
employed
25 people

General Human Resource

in HRM

Management

Consulting Firm, also

offering Auditing

Vendor B

Vendor C
Vendor D

Founder

Partner,
Founder
Founder

Services Offered

Greek firm

5 people

General Human Resource

Management
Major focus on training,

Greek Firm using tools

15 people
leased from foreign
Greek firm

development and
3 people

Training services

6 people

Headhunting

Greek, exclusive
Vendor E

Partner
representative of well-

19

Table IV: Interviews: Group B- HR Managers respondents

Type of Company

HR
Manager A
HR
Manager B
HR

Greek Company.
Greek Division of a

Sector of

Emp-

HRM

Position of

Activity
Transport &

loyees

dept.
2

respondent
Human Resource

Car Industry

400

Multinational
Greek Group of
Companies.
Greek Company,

Banking

7000

4
persons
40

acquired by a larger

Manager E

Pharma-

owned company.

ceuticals

Director, Greek
Human Resource
Manager

130

1 person

Industry
Greek group of
Greek, family-

Director
Human Resource

Persons

&Finance
Textile

HR

persons

Cargo

Manager C

Manager D

273

New Human
Resource Manager

No
360
HRM

Senior Line
Manager

20

Table V: Extent of use and specialisation of HRM services used by companies of different
size
Company

Sophistication2No of

Size

Employees

Small

<50

Smaller

Large

Large
Multinationals

Customisation3 of

Outsourcing
Scarce HRM Outsourcing

Low Sophistication,
50-150

Medium
Larger Medium

Description of HRM

Total Outsourcing
High Customisation
Low Sophistication,

Outsource particular issues upon

Low Customisation
High Sophistication,

need ex. Training, Recruitment

Outsource particular issues upon

High or Low Customisation

High Sophistication,

need ex. Training, Competencies

Scarcely Outsource and if so, they

150-250

>250

>500
may do it through the Company

High Customisation
1:Categorisation of Company Size according
to Observatory of European SMEs (2002)
2:Sophistication signifies the extent to which the vendors services are up-to-date, new, and
theoretically sound
3:Customisation signifies the extent to which the HRM services provided are customised to the
particular needs of each customer

21

Low Customization

High Customization

Figure 3: Need for Customisation and Sophistication in HRM outsourcing, according to

Greek Respondents

Smaller Medium
Companies

Large Greek and

Large Multinational
Companies

Larger Medium
Companies

Large Greek
Companies

Low Sofistication

High Sophistication

22