The Management Paradox of Digital Outsourcing: The Experience of Companies in Central and Eastern Europe

Abstract

The purpose of this study is to analyze a human resource management (HR) tool and an element of managerial controlling architecture in organizations in Central and Eastern European (CEE) countries – digital outsourcing. The relevance of the research lies in defining its applied management context, including decision-making, responsibility allocation, control mechanisms, and building trust in the «company-customer – digital service provider» relationship. Based on the analysis of digital HR outsourcing practices, including payroll, HR electronic document management and the use of intelligent HR platforms, it is shown that the digitalization of the external course of processes is accompanied by a change in the logic of management control. This is reflected in the shift of the latter from operational monitoring to risk-oriented and predictive models. In the course of the study, the management paradox of digital outsourcing was revealed, which consists in the fact that the transfer of operational functions to an external provider does not lead to a decrease in the managerial responsibility of the customer company, but, on the contrary, increases the requirements for manageability, data interpretation and institutionalized control of decisions. The author of the article shows that in the CEE countries the effectiveness of digital outsourcing is determined not by the level of technological automation of HR processes, but by the quality of the corporate governance architecture and the development of a management controlling system. The results obtained are of practical importance for organizations implementing digital outsourcing of HR functions in the institutionally heterogeneous environment of the CEE countries.