Niyamath Parveez

The internet has quite clearly made the world seem like a smaller place. Connecting people with so many new communication channels and possibilities has made it easier for firms to interact with other companies and customers but that is hardly the tip of the iceberg. Many of the firms operating in developed countries will consider their cost of labor to be higher than what could be had in many developing countries around the world but working out how to channel and utilize this staff force is difficult. It can be an extremely bad PR move for any firm as it invariably involves placing some local based staff out of employment whilst hiring people from another country that is able to provide labor at a much cheaper rate. This is what is known as offshore outsourcing and has been a staple part of many firms’ international tactics in recent years. However, offshore outsourcing has generally seen jobs and departments move wholesale to a new country, perhaps with new offices being set up specifically for these jobs.

It is obvious to see why major firms with huge work forces will gain a benefit from this but smaller firms are unable to benefit from this. However, the internet has opened up the possibilities to employ a single person or very small team of staff, wherever a firm can find them. This means that no matter where in the world a potential employee is situated, they can be utilized to allow a firm to reduce their labor costs and save money.

There are web sites like the elance site which allows companies to advertise jobs they require to be filled and allow potential employees to tender for these jobs. This site, and many others, has dramatically changed the way that employers go about finding workers and fulfilling their work orders. The beauty of elance is that it is extremely simple for all parties to use the site and this is very useful for encouraging communication and shared workloads. A company will upload details of their job and interested parties can tender for the product, indicating the price they take for completing the job and the deadline with which they will complete the job in. It is possible for the tendering party to supply further information about their experience and credentials for fulfilling the job and there are additional tests than the tendering parties can undertake to offer some guarantee about their working experience. This provides a degree of confidence to the firms who are advertising the jobs and all customers will receive feedback, which also gives some form of indication about the quality of the work of a supplier. Once a winning bid has been accepted, the two parties can start sharing information about the job and it is possible for all parties to communicate directly through whatever mechanisms they choose, which can help speed up the process of outsourcing. If a firm has only infrequent jobs that they need completed in a short time, using an outsourcing site like elance is a fantastic way of working.

One of the things that many people take for granted in any organization is the HR element of the job but woe betide a firm that does not have a good one in place. If employees are unable to book annual leave or request time off, the morale of a company will start to dip very quickly and this can have a massive impact on the output and production levels. For small firms, it may be very easy to organize the HR elements of the job but if the employees contained within a company starts to rise, it may become more difficult to organize.

It is possible to have a company HR department but some of the jobs and software systems used to properly control the comings and goings of staff can be costly and at the moment, this is something that not every firm can afford. In a recession, costs are looking to be cut at every opportunity and some firms may find it difficult to justify the money they would need to spend on a quality HR department. Help is at hand for these firms as they should find they are able to outsource their HR departments and have the work undertaken for them by a quality outsourcing agent.

This is the decision that has recently been taken by Emap, a major magazine distributor and a major company in their own right. The fact that a company such as Emap has so freely moved into the outsourcing industry for all of their HR needs indicates that it is something that may bring a great deal of benefit. Wherever a market leader goes, it is likely that many other firms will follow so do not be surprised if more companies turn to a HR outsourcing specialist to take care of all their employee needs.

Not only is this move one that is capable of providing serious cost savings to a company, it can actually assist in improving the quality of the service provided to all employees. If the HR service being offered by the firm is currently not the greatest, placing the work in the hands of industry experts should see a marked improvement. This is because the outsourcing agent will have a great deal of experience of working with other companies to fall back on and will enable them to work more efficiently if any problems arise. This is the sort of activity and level of knowledge that firms are turning to outsourcing for, not just to make a financial saving.

Of course, in the current climate, any economic benefit that can be obtained should be pursued so the combination of savings with increased level of service is something that should be of interest to everyone. If you feel that your current HR provision is not quite up to scratch or you could obtain a greater financial benefit by outsourcing your HR requirements, rest assured that a great number of firms are thinking the same thing and there is no reason to not jump on board the outsourcing train.

One of the biggest success stories in business in recent years, and let’s face it, there haven’t been too many, has been outsourcing and the developments brought from it. You only need to look at the number of countries surging ahead with plans and hoping to topple India, China and Malaysia from near the top of the outsourcing list. This is because the countries who take on board outsourcing are well aware of the benefits that the jobs and association bring to their nation but the firm who is undertaking the outsourcing is also a recipient of great benefits. Many firms have been struggling to remain financially viable of late but by using outsourcing as a means of reducing labor costs yet retaining a high standard of product, it has been possible for firms to remain trading and build a platform to have a better future.

However, it appears that not everyone is enamored and in love with outsourcing which has caused an uproar in those within the outsourcing community. Okay, not everyone is going to love the idea, especially those who may find that they are going to lose their job because of outsourcing but when a large poll of HR staff are commenting on the effectiveness of outsourcing, it is possibly time to sit up and take notice of what people are thinking.

The Chartered Institute of Personnel and Development (CIPD) have released figures after polling their members which bucks the general trend of how people are viewing outsourcing. Fewer than 50% of those asked believed that outsourcing had been a success and less than 10% of respondents stated that outsourcing had been a total success. This follows on from the calculation that 29% of all companies questioned stated they used outsourcing as part of their HR requirements. Clearly, there is still a long way to go to ensure that outsourcing is rolled out properly amongst the industry but figures like these will do very little to encourage the remaining firms to enter this market and gain the benefits that are being obtained by other firms and departments.

As with all surveys, care has to be taken about how was asking the question and why they were asking it? If many of the people currently employed in the HR industry are asked about outsourcing, they may have a fear that they will lose their own jobs to outsourcing and therefore may be keen to push a negative image of outsourcing. This would make sense when trying to reconcile the opinion that most other industries and departments have about outsourcing, the vast majority of which seems to be of a popular note.

These findings probably tell consumers more about the reliability and honesty of people answering surveys, and indeed the reason why surveys are commissioned in the first place, as opposed to being a true gauge on outsourcing in the HR industry.

One of the key factors in using an outsourcing firm is the fact that as well as the employees, they can bring a great number of services, products and infrastructure benefits to the agreement as well. In cash strapped times, this ability is something that greatly appeals to the firm looking to outsource. This can be seen in a recent example in Chandigarh where the Chandigarh Transport Undertaking (CTU) look set to outsource their labor requirements.

As well as the staffing issues that come with it, part of the tendering list has raised the issue of the outsourcing firm replacing the buses that are currently being used. A new fleet of vehicles will greatly improve the service offered by the CTU and should be of benefit to the commuters and passengers who use the service on a regular basis. It is quite probably that the current regime would not have the money to fully restock their bus fleet but by making it part of the outsourcing arrangement, it is a service that can be rolled out sooner than you would expect.

Whilst this news is expected to be welcomed by the public of the local region, the trade union group for the CTU is up in arms and has voiced their displeasure about this outsourcing move. It is very clear to see why trade unions are opposed to outsourcing as it means a loss of jobs for their members but more importantly for the people who run it, a loss of power for themselves. In many countries where trade unions still have a lot of power and are capable of causing great difficulties for a firm, there has been an acceptance that utilizing outsourcing can provide great assistance in diluting the power of trade unions. Trade union members are clearly opposed to any such action but with the current financial crisis facing the world, firms are looking to cut back on all costs and using outsourcing can help them on many levels.

With bus driver and conductors roles being placed under the spotlight by this decision to outsource the staffing of the CTU, there is no doubt that there is a lot of jobs at stake. With 100 new buses looking to be introduced in the near future, this accounts up to 200 new staff members but with part-time, shift work and contractual obligations, it is likely that a total of 250 people will be hired by the firm who wins the outsourcing contract.

Although many of the current workers will likely find employment with the new outsourcing firm, who will be keen to use their experience and skills to maintain a good standard of work, it is likely that the contract hours and overall terms of pay will be lower than what they were previously on. However, with the choice of reduced pay or no job at all, it is likely that most staff members will sign up for the outsourcing firm, which is an issue that causes discomfort and displeasure to the trade unions and general public.

RPO, or Recruitment process outsourcing as it is called, has always been used by many MNC-s to simplify the process of hiring new employees. The process is simple; the outsourcer hires the services of some recruiting service provider and specifies the requirements that candidates would have to meet in order to be eligible for the jobs available. The service provider then interviews candidates according to those guidelines and sends the candidates (who satisfy the requirements) to the outsourcer. The service provider in this case takes full responsibility about the quality of the workforce that it provides to the client.

There are definite benefits to the process. On one hand, the outsourcer saves precious time that would otherwise be spent in hiring candidates. On the other hand, the process relieves the outsourcer from having to hire experienced HR professionals, who can demand quite a high salary figure based on their qualifications and experience levels. Besides, the personnel who work at the offices of the service providers are usually highly qualified HR professionals who have been dealing with recruitment procedures for years, and have a clear idea about the tricks of the trade. Finally, the process does conform to the cost cutting policies of almost all large companies.

Recruitment process outsourcing service providers boast of quite a few qualities that they possess. However, outsourcers should check the backgrounds of these providers to make sure that the providers have the capability to back those promises up with solid performances. Recruiting service providers often boast that they can, in fact, improve the quality of the workforce in the outsourcers company to a great extent. They also claim to be able to provide highly qualified employees at minimum possible salaries, and recruit a sizable workforce for the outsourcer in very little time.

These promises all sound great, and indeed, some recruitment service providers do live up to these promises. They strive to recruit highly qualified professionals for their clients. But, there are some problems that recruitment process outsourcing service providers will always face. These include:

1. The recruitment process outsourcing service providers are almost always out of the loop regarding the projects that are being handled presently by the outsourcer. They are, at best, given a general idea about the qualifications that are required by the candidates to get the job. This makes hiring proper candidates quite difficult for the service providers.
2. The outsourcers seldom hire the services of a provider with ample time in their hands. They reach for the numbers at the last moment and put pressure on the providers to amass a sizable workforce quickly. This lack of time can cause major problems in the recruitment process of the provider.
3. Large companies with good reputations in the industry are already viewed as employers of choice by many qualified candidates. In these cases, the outsourcing service providers are usually not able to add much to the reputation of the company by taking over the recruitment process.

In spite of these drawbacks, outsourcing of recruitment processes is still followed by many companies. It is also quite likely to be followed by many others in the coming years, because of the savings it provides and the problems that it solves in the entire recruitment process.