In layman’s term, outsourcing can be defined as a practice which is employed by different organizations to reduce cost by transferring a portion of their work to outside supplies. Consultants are mainly employed by an organization to give advice on a variety of issues. Organizations need the help of consultants to carry out the projects which have a variety of issues after obtaining help from the consultants. Consultants help in the process of outsourcing. Outsourcing is on the rise because it helps the organization to become bigger.
The functions which are carried out in-house are taken over by consultants. This practice of consultancy is gaining popularity over the years because the consultants are able to provide better quality of services. Outsourcing also carry out those functions which were earlier done by the human resource department.
In UK, the organizations which outsource organizational functions include ancillary services like security, cleaning, catering, transportation and buildings maintenance. The trend was different twenty years ago. During that period, larger organizations and public sector managed these services depending by employing their own people instead of going for outsourcing. But now, as the focus is entirely on core business activities, because this is the main source of earning profit. Therefore, in order to reduce the time and effort of the work force to carry out these marginal activities, they prefer outsourcing so that their work force can be utilized in the core activities. Outsourcing organizations providing services such as specialist security, cleaning and catering offer higher-quality standard of service at a lower cost than in-house operations. For these organizations, these ancillary services is the core business and they have the required expertise, up-to-date equipment, and the staff required to run highly efficient operations. If the standards of service fall short than what was discussed in the agreement, the purchasing organization has the right to sign a new agreement with a different provider. This ensures that high standards are maintained.
A service contract is signed between the organization and the consultancy providing outsourcing services. The term of contract generally range from three to five years. If the organization is satisfied with the quality of service provided by the consultancy, the contract is renewed otherwise the contract is terminated. As the business of these outsourcing service providing organizations depend mainly on the quality of services, because the quality of the service is deteriorated, it will be hard to get the trust of the customers, therefore, adequate care is taken to maintain the quality of service so that clients renew their contract with the outsourcing service provider.
But in practicality, it is a different scenario. The poor quality of service needs to be reported to the higher authorities and this takes time. Replacement might not be possible because of the unavailability of different service providers. Though a lot of obstacles are present, yet organizations do not shy away from taking the help of outsourcing. In spite of these shortcomings, outsourcing does help the organizations in the long run.
Links of Previous Main Topic:-
- The nature of human resource management
- Strategic human resource management
- Planning jobs and people
- Strategic aspects of resourcing
- Contractors and their contracts with consultants
- Employment contracts
Links of Next HR Management Topics:-
- Working patterns
- Flexible working hours
- Atypical contractual agreements
- Consultants
- Outsourcing
- Summary proposition in contractors and their contracts with consultants
- General discussion topics in contractors and their contracts with consultants
- Recruitment
- Selection methods and decisions
- Staff retention
- Ending the contract
- Strategic aspects of performance
- Organisational performance
- Individual performance management
