Yes, you are right in the current economy outlooks and also current HR practices. However, there is nothing is impossible. As what you mention, could employees relations are outsource? Yes, why not? Those activities like attitude survey, employee handbooks, company publications, labour law compliance, as well as labour relations could be outsource. Then just the HR department can focus on Core Competencies by eliminating the non-Core Competencies. Besides, not all HR managers are well known with Employment or Labour Laws, thus, they can always outsource to someone to do for them. This same when goes to the labour relations, HR may look for some vendors or professionals to help in order to re-close the gap between boss and the subordinates, rather than waste time and money to develop and build such system. And again, HR can focus on what is supposed to be focus.