Developing a Model of Human Resource Function Outsourcing with a Downsizing Approach in the Iranian Tax Administration

Abstract

This study aimed to develop and validate a model of human resource function outsourcing based on an organizational downsizing approach in the Iranian Tax Administration. This developmental–applied study employed a mixed-methods sequential exploratory design. In the qualitative phase, the participants comprised university faculty members, senior managers, deputies, and experts of the Iranian Tax Administration, as well as specialists familiar with outsourcing and organizational downsizing. Eighteen participants were recruited through purposive and snowball sampling until theoretical saturation was achieved. Data were collected through semi-structured interviews and analyzed using the Strauss and Corbin grounded theory approach through open, axial, and selective coding. In the quantitative phase, 550 participants were selected using simple random sampling, of whom 530 returned analyzable questionnaires. A researcher-developed questionnaire containing 27 items across six major categories was used for data collection. Its content validity was confirmed by eight management experts, and its internal consistency was supported by a Cronbach’s alpha coefficient of 0.89. The qualitative and quantitative data were analyzed using MAXQDA, SPSS, and SmartPLS, with partial least squares structural equation modeling applied to validate the proposed model. Structural equation modeling demonstrated that all factor loadings exceeded the acceptable threshold of 0.40, confirming that the observed indicators adequately represented their corresponding constructs. Moreover, the t-values associated with all structural relationships were greater than 1.96, indicating that all hypothesized relationships within the model were statistically significant at the 95% confidence level. The coefficients of determination for the central phenomenon, strategies, and consequences were 0.847, 0.762, and 0.621, respectively, demonstrating the model’s satisfactory explanatory power. The assessment of the overall goodness-of-fit index further supported the adequacy of both the measurement and structural components of the proposed model. The validated model indicates that effective outsourcing of human resource functions within a downsizing framework requires the simultaneous management of causal, contextual, and intervening conditions, accompanied by educational, motivational, supportive, legal, strategic, professional, and outsourcing-management initiatives. Applying this model may assist the Iranian Tax Administration in reducing organizational costs, improving productivity, strengthening organizational interactions, enhancing creativity, facilitating adaptation to environmental changes, and concentrating internal resources on core functions.