The past few decades have brought enormous changes both to the employment landscape and to recruiting. Probably the most significant change has been in the redefinition of long-established work roles. The 9-to-5, 40-hour work week has been flexed, shared, contracted, globalized and "virtualed" into an entirely new shape. With these changes, specialized outsourcing firms and independent contractors have taken on more prominent and varied roles within the corporate picture.
In the past, outsourced labor focused on professional services - for instance, on accounting or legal representation. Recently, however, outsourced employment has broadened services dramatically. With an increasing number of high-tech companies (even during the current NASDAQ shake-out), it makes sense that outsourcing now encompasses non-technical as well as technical skills. A current example of this trend is customer service outsourcing. Whatever the skill or service, professional or otherwise, this altered corporate environment is here to stay. The reasons for this are fundamental.
Outsourcing:
Lowers costs - limiting, for instance, training expenses associated with full-time staff and limiting investment in capital assets such as office space and equipment
enhances staff work time and efficiency - freeing full-time staff to focus on their own skill sets and allowing companies to tap specialized skills while avoiding the training curve.
Maintains competitiveness with other companies - matching the cost savings of competitors that are using outsourced labor.
Sustains productivity during transitional phases - smoothing production during mergers, acquisitions and market expansion.
Additionally, as Lt. Col. Jacqueline Dovale of the U.S. Air Force's Competitive Sourcing and Privatization department (CS&P) states, the rise of outsourcing "is due to the need to find cost savings by accomplishing activities more efficiently and using those cost savings to fund modernization programs." Outsourcing, then, can increase and improve capital assets, providing long-term benefits that continue beyond an outsourcing contract's duration.
Saying that, the evolution of employment and recruiting means that the role of a human assets manager must evolve. In fact, that role shifts from a narrow focus on hiring to a broad view encompassing managerial and oversight functions. Luckily, with planning, that transition can be accomplished with relative ease.
In or Outsource?
Before implementing an outsourcing plan, a human assets manager must consider their first, and best, employment option: in-house recruiting. In terms of increased staff morale and a strengthened infrastructure - not to mention reduced recruitment and training costs - in-house recruitment always is the best hiring option. That said, such recruitment may not be feasible in certain situations. The very consideration of an outsourcing option suggests that a company lacks employees with particular skill sets - or, at least, does not employ enough people with those skills. Training and developmental programs become central in such situations. Therefore, a human assets manager must ask:
Does the company have any established cross-training, cross-discipline programs?
Has cross-training produced quantifiable benefits?
Does the company offer any developmental programs to employees - access to seminars and conferences or subsidized continuing education?
Can employees easily access company information - meeting minutes, conference papers, press releases, advance notice of training or employment opportunities, et cetera?
Is there employee interest and enthusiasm for cross-training or developmental programs?
How speedily and efficiently might employees be cross-trained for the newly proposed positions?
Will shifting employees to new roles have an adverse effect on other departments?
In answering these questions, a human assets manager can determine if establishing an outsourcing strategy makes more economic sense than providing in-house developmental programs. For instance, the motivation for this decision might be traditional: a steep training curve would not be cost-effective compared to the hiring of skilled outsourced labor. In a high-tech corporation, however, a more common motivation might be that the required skills are low-value tasks. (Software programmers rarely desire cross-training in customer service skills.) As noted, outsourcing allows companies to tap external expertise; to focus on existing, internal skills; and to maintain productivity when incorporating new tasks or when reacting to new market conditions. Additional questions that human assets managers must ask, then, are:
Has the company outsourced labor in the past?
Are competitors outsourcing successfully?
Is outsourcing necessary for competitive reasons?
Is there a substantial, varied and competitive contract labor pool that can meet the company's requirements?
In moving toward an outsourcing plan, a human assets manager also will consider SWOT analyses conducted by HR and other departments. Examining a company's internal strengths, internal weaknesses, external opportunities and external threats, SWOT analyses determine specific and recruitment needs - for example, the expansion of call center staff or the creation of a customer services department that focuses on Internet-based queries.
Outsourcing Relationships: Planning & Maintenance
A human assets manager weighs in-house hiring, considers the contracting market and decides that outsourced labor provides their company with its best employment option. What steps follow? In the past, HR departments focused on staff recruiting - posting newspaper advertisements, reviewing résumés, interviewing candidates and hiring the best candidate available. The assumption in that process was the establishment of long-term employment relationships. In contrast, the current HR environment - outsourced and in-house staff both - is competitive, entrepreneurial, and focused on quality of life issues. This demands that human assets managers be more than recruiters. They must be hands-on managers. That's because, despite popular misconceptions, outsourcing does not provide simple, "plug-and-play" employment solutions. Beyond finding and recruiting contractors, HR managers must incorporate them, as they do with other employees, into a workable business model. With that, the Royal Bank of Canada lists a number of points concerning outsource employment planning, central questions being:
Who - employer or contractor/outsourcing firm - is responsible for task planning?
What are the salaries, hourly rates and overtime rates?
Who determines turnaround times and hours of work?
Where is the work location - on-site or off-site?
Who assigns, supervises and sets standards for individual tasks?
Who reports on outsourced activity?
Who is the communications manager for the employer and for the contractor?
Who covers heavy or special equipment purchases, maintenance and repair costs?
Who is responsible for liability insurance or for bad debt costs?
Who pays for delivery and shipping?
Who covers worker benefits?
Who addresses legal concerns and liability issues?
Who, ultimately, supervises and takes responsibility for production and quality control?
This is a far cry from the traditional newspaper-to-hire model. As Adrian Moore, Director of Economic Studies for privatization research organization Reason Public Policy Institute (RPPI), puts it, "outsourcing is not a magic wand that miraculously lowers costs and improves quality. It is a tool that, implemented properly with performance-measuring contracts, can harness private-sector innovation and make the public dime go farther than it normally would."
Outsourcing: Extra Management Creates Extra Benefits
Clearly, outsourcing is no magic bullet. However, it can provide benefits to companies that commit to planning and maintaining productive relationships with contractors. As the Air Force's Dovale states, "the end result, whether a service stays in-house or converts to contract, is improved performance, more efficient use of resources and savings that can be used for modernization." In short, the benefits are there for development. With a human asset manager's involvement in planning, maintenance and oversight, those benefits can be reaped - serving the needs of companies, their employees and their contractors.
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