An appealing idea

Wednesday, 31 March 2010 13:34

A few good reasons why outsourcing personnel suitable for various job functions is becoming an appealing option

When it comes to staffing solutions in South Africa, there largely has been an allegiance to tried and tested methods of human capital management. It was only in the last decade with challenges such as skills shortages, economic recession, subsequent job losses and the evolution of management practices that outsourcing staff has become an option for businesses, which in many instances already had tried everything else.

The benefits of outsourcing staff are fast becoming more apparent. It is an ongoing experiment that seems to meet the needs of both employers and employees. Initially met with apprehension, outsourcing staff has proven to be effective, not only from a financial point of view but from an operational point of view as well.

As a business practice, outsourcing staff can be defined as allocating certain job functions to either a company or individual outside the company’s in-house departments or employees.

From the onset, it is apparent that the practice of outsourcing reduces or completely eliminates the cost of recruiting, hiring and administrating staff. Because staffing is generally the largest cost centre within a business, companies that outsource have the opportunity to optimise their profits and productivity.

A vast amount of resources is spent on employee-related management and administration. By minimising this function and expense, managers and business owners are free to focus on the company’s core business, improving processes and increasing profits rather than administration relating to staff.

Apart from lowering costs, there is also the likelihood of increasing the quality of work being done by outsourced staff.

Skills training and development is an ongoing business investment that can prove costly and time consuming. By choosing the correct company or individual to outsource to, businesses can benefit from a wide range of skills and experience without the expense and interruption of training staff.

The limitation of management to deal effectively with complicated legal and even common labour issues is a perpetual obstacle for a number of businesses.

Outsourcing provides an alternative to having to spend valuable managerial time on administration of that nature.

In most instances, outsourced staff procedures and management are not the responsibility of the client but the outsourced company or individual. Some staff outsourcing concerns also can provide companies with the unique opportunity to meet BBEEE compliance and again, improve the overall business environment within their particular sector and make a sustainable contribution to the country’s economy.

Outsourcing staff can increase the competitive advantage of a business. By having the resources of leading and highly specialised skills, business owners and strategists have identified outsourcing as a way of staying ahead of the competition.

The way South Africa does business is changing constantly and gaining momentum, perhaps faster than a business owner can prepare and orientate his/her in-house staff. Outsourcing the necessary skills is regarded as an effective business practice all over the world to increase competitiveness and stay progressive.

The decision to recruit in-house staff is sometimes laden with a myriad factors that are not always the best possible fit for a business. Factors such as company culture, morale and personal preconceptions can complicate the employment process. While some businesses may choose a candidate based on the likelihood of that new employee’s integration into the company, the employee may also lack some of the skills required to improve the business.

Outsourcing then becomes more attractive because the focus is on employing the right skills to ensure overall growth.

The overall operational goal of any business is to supply a product or service that impacts the target market and generates income for the business to survive. That objective is both as a result of and subject to the quality and quantity of staff within that business.

Businesses that outsource staff are making a decision to stay technologically progressive and guarantee the consistency of their product or service.

Technology is a responsibility of business. By staying up to date with advances in technology, businesses have a vehicle from which to gain competitive advantage or improve their offering to clients. Outsourcing can mean exposing your company to systems that can make an overall improvement to the way things are done. Staying up to date can be costly and a full-time responsibility, but outsourcing is a way in which to manage this function.

Service levels also can vary depending on internal staff and structures. By negotiating the best possible contract, companies can set the level of service they want to offer and have something to measure that objective against. Outsourcing can enforce consistency of the level of service and often allows a business to make use of value-added services such as industry specialist programmess.

The popularity of outsourcing is increasing in line with the country’s objective to establish itself as a serious contender in the global economy. Businesses have begun to see the benefit of reduced costs, varied and focused management, consistency of quality and improved performance because they are necessary, not only to survive, but to succeed.

Outsourcing provides those options and yields positive results.

No longer merely a business science experiment, outsourcing staff is fast proving to be an effective business practice.

Taryn Springhall

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