Outsourcing of personnel, in addition to potential material benefits, carries great risks for the company regarding human capital and maintaining control over the company.
When initiating the outsourcing process, one should have a clear goal and a detailed plan for achieving it. You cannot start changes based on a trend.
Each company is individual, and the influence of the human factor in business can be very great. If optimization is a desired process for a business, then for some employees this means layoffs. The other side of the coin is the contractor’s performance. Outsourcing works for results and must have a clear idea of what exactly is required of it.
Please note! It is the customer who determines the outsourcer’s activities, their terms, volumes, and quality. Management of outsourced processes lies with the customer.
Outsourcing of a company’s business processes is an action that takes time and requires careful preparation. Only small businesses can do without optimization and survive in the market today, and even then they outsource at least accounting.
Large companies cannot be effective in all areas, especially in auxiliary or specific areas. For a successful business, you have to think about outsourcing certain production processes.
The organization of the outsourcing process consists of the following stages:
- Need assessment is a preliminary stage that includes a comprehensive analysis of the activities of the company’s divisions. The costs and the resulting results are assessed.
- Evaluation of financial efficiency by departments. Here, the efficiency of departments is analyzed, including productivity levels and wages of individual employees. The purpose of this stage is to identify the least efficient costs or unprofitable areas of activity.
- Evaluation of outsourcing proposals and decision-making. At this stage, you should study the capabilities of the outsourcing company. You can invite managers from several companies to draw up a trial contract and evaluate their potential benefits. Compare your own costs for individual activities and the offer of the recruiting company.
- Selecting an outsourcing company. We study information, reviews of current clients, study documentation, check state accreditation and its registration in the relevant government agencies. The future effectiveness of your outsourcing depends on this stage, without exaggeration.
- Drawing up a contract. Here you will need to accumulate all the information obtained during the assessment of the activities of the department that you are outsourcing. The contract should reflect not only the final goal, but also the ways to achieve it step by step. You should indicate the exact dates for monitoring the work being carried out, volumes and other, qualitative or quantitative, measurable characteristics. The details depend on the type of your activity.
- Transition period. At this stage, the enterprise’s employees are informed. It is recommended that the team be explained the inevitability and necessity of changes. The process can last for 2 months; this is the period provided by law for warning the employee about his upcoming reduction.
There is no final stage. Permanent analysis and management of outsourcing processes will need to be carried out. No matter how qualified, well-known, and reliable the outsourcing company is, you will have to keep your finger on the pulse.
Outsourcing Process Management
Monitoring the execution of work under the contract should be systematic. This will allow you to get the maximum effect from the optimization you have started. In practice, it often happens that at the initial stage, the control is strict, but over time, it begins to weaken.
Please note! The outsourcer’s performance control is assessed by comparing the planned and received benefits.
If your company’s specialists can independently monitor and adjust business process outsourcing, then this is the responsibility of the relevant employee. However, the company often needs the personnel for such work. You will have to bear additional costs by attracting a specialist from outside.
It should be understood that the effectiveness of outsourcing a company’s business processes depends equally on two stages of control. The outsourcer controls the execution of work, and the customer controls and directs the outsourcer’s work. Only live cooperation will be effective.