New human resource management practices in knowledge-intensive business services firms: The case of outsourcing with staff transfer

Abstract

This article investigates the human resource management practices that underpin a specific model of organizing knowledge-intensive business services (KIBS). Drawing on data from four countries, it examines HR practices in two global IT services firms — EDS and IBM. The market for IT services depends very much on outsourcing and the transfer of IT workers from the client to the IT firm. This has theoretical and empirical implications for how IT firms manage recruitment, skill development and job security. The evidence supports an alternative framework for understanding four key influences on HRM in large specialist KIBS firms: i) inter-organizational relations (tight inter-linkages with client organizations); ii) contract performance conditions (outsourcing contracts); iii) knowledge flows (inter-organizational transfers of highly skilled IT workers); and iv) the economic and institutional context (industrial relations institutions). The article demonstrates that these internal and external conditions generate new tensions and conflicts in the design and implementation of HR practices.