Growing trend in Human Resource Management in recent years has seen a steady increase in Human Resource Outsourcing (HRO) practices. Many companies outsource some HR activities and becoming a new engine of growth to the organization. By engaging human resource outsourcing activities the organization so called gained flexibility, competitiveness and profitability. Intriguing facts that, many studies conducted on this issue found negative light; lead to job lost, risk to the organization i.e., reduces organization capability across functional synergies and reduce creativity. Hence, the study on this subject is inconsistent and inconclusive, not extensive as well as still at the seminal stage. Therefore, the aim of study is to investigate the effect of cost reduction and business strategy on human resource outsourcing practices. Meanwhile, the specific objectives are to analyze the relationship between cost reduction and business strategy towards human resource outsourcing practicing. The result revealed that, both variables are supported and affected the HRO practices. The findings of the study may provide a systematic guideline and could be used by the government to consider whether this exercise is worth it or otherwise.
