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Should You Outsource Your Workforce?

Outsource Your Workforce? Should you Outsourcing Facts and Figures In fact, 40% - 50% of the top 500 companies in the world outsource, here are the biggest players: Outsourcing was formally coined as a business term THE INTER NET in 1989, mainly due to the availability of work through the internet IBM 63,700 EDS 22,400 Dell 17,450 £300 2003 - The outsource market is worth over $300 billion globally Cognizant 15,000 BILLION Siemens AG 15,000 India's outsource market was worth $12 billion in 2005, which made it the largest in the world at the time General Electric 14,250 Convergys 14,000 Accenture 13,000 In 2011 there were protests and riots outside Google headquaters in India, after a spam update resulted in a huge drop in outsourced work Computer Sciences Corp 10,800 Intel 10,426 Types Of Outsourcing Staff Augmentation Project outsourcing This is where are specific outsourced workers with specific skills integrate with your own workforce. This can really help workers learn new skills on the job, help you stay in control, and all with minimal outlay This outsourcing model usually referrs to shorter-term, project based outsourcing. If a company has a short term need for services or skills they do not have (e.g. for a certain project), they can outsource it Plan Managed services Out-tasking In this case, one particular section of a business (a 'service') is outsourced to a company, usually on a longer term basis. They act as managers of this section and consult on other possible outsourcing areas This is a more specilaised form of outsourcing, whereby certain skills or sets of employees are utilised to fill gaps identified within a company. Build-Operate-Transfer The BOT model is where partners are contracted to set up franchises or subsidiaries of the company, usually overseas. This means the partner faces all the problems and risks in setting it up, whilst the company reaps most of the rewards PRO's and CON's PRO's CON's Flexible costs One of the greatest benefits of outsourcing is that it's scalable, and can be ramped up and down as required, making the costs extremebly flexible. In uncertain modern economies this is very useful Work not done on site With some outsourcing operations, work is done off site. In this cae you have less control over what is done, and making changes or analysing problems may take longer and be more difficult Timescale Since outsourcing uses a company that specialises in a certain area, the timescale on setting something up is far quicker than training and doing it in-house Risk of exposing confidential material When outside workers are brought into a company, there is always the risk that sensitive business material could be at risk Business focus Having a specialist company come into your business and run a department allows other employees and management to focus on the core business activities Lack of focus It is unlikely, but if the company you're dealing with has many other customers it may not be as focused on your tasks and goals, because it's juggling other priorities Reduced costs Hidden costs Again, it's unlikely, but there is a small chance that hidden costs could make an outsource operation nearly as expensive as doing it in-house, but this usually only applies in complicated situations across international boundaries Apart from complex situations mentioned opposite, outsourcing is usually done to save money. By using outside contractors you can save on both operational and recruitment costs Reduced risk Outsourcing companies take a large share of the risk when taking on a contract, thereby reducing the risk to the business. This in turn can lead to a more relaxed and productive workforce Level playing field Hiring outsource companies levels the playing field between small and large businesses. They may even use the same company! Facilities management and Manufacturing support services Facilities management and manufacturing support services are relativel new disciplines within the wider outsourcing market. Facilities management referrs to the process of outsourcing a whole department, with staff, management, equipment, accounts and all other issues taken care of, whilst manufacturing support services supply skilled staff for a certain department within a company. With companies looking for any competitive advantage in this tough economic climate, they are some of the fastest growing markets around the world: The UK Facilities 150 Management market is worth .and employs over 140,000 people billion pounds annually x1000 Sources: Techsunite.org AktrionFM Theartofservice.com www.aktrionfood.com Skillsfundingagency.bis.gov.uk

Should You Outsource Your Workforce?

shared by Designbysoap on Nov 05
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With economic times as tough as they currently are, more and more companies are looking to find cost and efficiency savings by outsourcing and using facilities management, but is it worthwhile?

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