Outsourcing can hurt a company if not well planned

May 31st, 2010 by Deepak Leave a reply »

Companies offering services such as cleaning, security, customer care, auditing and accounting are today making it easier for corporates to acquire these services at a lesser cost than that of hiring permanent employees for the jobs.
Mr Simon Muthiora, the executive director of Skills Geographic Kenya Limited, a local human resource recruitment company, advises companies to plan well for the activity before embarking on it.
Outsourcing companies need careful planning to establish the services they are outsourcing and whether it will be successful in achieving the core goal, which in most cases is cost-cutting,” he says.
Basically, outsourcing will involve letting go a number of permanent employees and acquiring a new lot of employees who have contracts signed with another company.
A well planned outsourcing system considers several factors, among them the type of services being outsourced, the reasons for outsourcing, how best to acquire the right personnel to provide the outsourced services, and dealing with risks associated with outsourcing .
“For most companies, employees are the greatest assets, hence planning for them is crucial. These include maintenance in terms of benefits and salaries which forms the entire cost of retaining employees, and which is then measured against the cost of outsourcing,” says Mr Elijah Theya, a human resource consultant.

Secondly, when planning to outsource, consider the type of services you need.Core responsibilities that require experts are not outsourced. A company cannot outsource the services of a chief accountant. You may choose to retain a permanent employee for this and outsource payroll accountants,” says Mr Muthiora.
Management of the outsourced staff should also be planned before attempts to outsource are made.This means ensuring that the outsourced employees work within the company’s policies and that they are productive. This can be established through constant communication between the two companies.
Routine management of outsourced staff lie with the outsourcing company while issues touching on staff salaries, insurance, leave compensation and other benefits are dealt with by their recruitment agencies/company.Outsourcing if not well planned could hurt a company by compromising performance. This could subsequently hit customer loyalty.
Take an example of front office services where customers have developed a long lasting relationship with the employees.

Source:-http://www.businessdailyafrica.com/Outsourcing%20can%20hurt%20a%20company%20if%20not%20well%20planned/-/539552/927984/-/s5vsro/-/

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