Professional Documents
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Final Research
Final Research
A Research Proposal
By:
Cunanan, Kisha S.
Flores, Jatrix E.
Perez, MykaJerylle
CHAPTER 1: INTRODUCTION
Cost Management is how a company plan and control its budget for the needs and
improvements of the firm’s facilities and service but it wouldn’t be implemented without a
manpower what we called Laborers. These are skilled manpower's that has a capability to
work, give service to its organization and able to provide maintenance for the company.
Laborers affect cost management of a company in a way that they serve as an expense of a
company, knowing that they receive salaries and incentives that affects the proper budgeting
while having the laborers that they need with a positivity on their side and maintaining the
efficiency of the performances. One is the company must conduct training in every
recruitment to search for hidden skills that may be suited in their needs before selecting the
Outsourcing laborers may help the businesses to reduce their cost, and every
businesses have a sets of reason why do they have to outsource laborers especially if one of
those reason is lowering labor cost of the company, most of the companies donot want to
trade quality of the goods or services for high prices, high prices resulting from labor
expenses because of too many laborers of the company,outsourcing can help to allows us to
get the best of both the good quality of products and services. Searching a global talent pool is
do the job, some may only have small access to global talent pool. This means that companies
have frequently compromise to find right talent at the right price. Many companies have
found that outsourcing gives them access to talent in other parts of the world. To get the best
chance of finding the right person for the job at the right price companies need to have the
largest possible talent pool to choose. There are many ways to expand it and to certain that a
company can attract applicants for the job. It is important to put the time and investment in a
timely to build the global talent pool so business can choose from them when they needed to
outsource laborers
increasesbusiness flexibility is increasing the speed of business processes and also Gilley and
Rasheed (2000) address that organizations that outsource are seeking to realize benefits or
address issues such as lowering of the overall cost of the service to the business. This will
involve reducing the preoccupation, defining quality levels, re-pricing, renegotiation and cost
restructuring, and thus resources are focused on developing the core business. Hence,
operating leverage as a measure that compares fixed costs to variable costs and as an approach
to risk management and for some types of risks is to partner with an outsourcer who is better
able to provide the mitigation. This is in line with a vast amount of research that has been
Businesses tend to focus on how to minimize the cost or expenses resulting from the
salaries or benefits of laborers that gives addition to firms’ expenses and since competitionhas
Outsourcing may provide a strategy to firms’ goal to minimize the expenses on labor
Assessment of the Effect of Outsourcing Laborers in Cost Management
HOLY ANGEL UNIVERSITY
costs it may benefit on the production both quality of goods or services and good performance
of employees. The outcome of this research will help the organization reduce its demand to
laborers while having efficient performance because it will burden the company to pay more
laborers, because having less but effective manpower will provide better cost management for
the company.
1.What are the reasons for outsourcing laborers instead of hiring directly?
4. What are the factors that using outsourcing can reduce cost?
The research objectives are divided into two: general and specific objectives. The
general objectives of the study were to examine the effect of outsourcing laborers in cost
management in the selected commercial banks and to contribute to the understanding and
knowledge about outsourcing. The specific objectives of the study were to determine the
services companies, and to find out the factors that using outsourcing can reduce cost
Assessment of the Effect of Outsourcing Laborers in Cost Management
HOLY ANGEL UNIVERSITY
This study will show the effect of outsourcing laborers in cost management. Since
outsourcing is the latest buzzword these days, the researchers thought that if this study would
be successful, it would be able to help a certain company to minimize its cost by outsourcing
laborers. The most important benefit is that outsourcing of work allows one to get the work
done at a very low cost and in a much more efficient way. When a particular type of work is
outsourced, the company or organization does not require hiring skilled people for it. There
will also be no need for arranging for training programs. The work will be handed over to
people who are already experts in that field. This will also bring in efficiency and quality in
the work. Outsourcing can also help to make a business more flexible and agile, able to adapt
to changingmarket conditions and challenges, while providing cost savings and service level
improvements.
For future researchers, this study would help the future researchers to be aware and
knowledgeable of the process involving the outsourcing of laborers and its effect on the cost
management. It would help them better analyst and it can be a help as a future reference for
For the students, this study may serve as a guide and reference for the students
For the professors, this research will aid them their discussions regarding related
lessons. It will be much easier for them to tackle related topics about this research.
Assessment of the Effect of Outsourcing Laborers in Cost Management
HOLY ANGEL UNIVERSITY
The mains source of the data was partly qualitative and quantitative. It’s qualitative
because the researchers gathered information through an interview. The researchers also
gathered information through the financial statement of the banks to quantify if the
Introduction:
A literature review was undertaken using citation, database, and hand searching
methods from libraries. It helps the researcher to go beyond the boundary of search to explore
maximum information that is relevant and close to the research topic in order to explain the
importance of specific research topic though the type of studies that includes in the literature
review may vary but the basic purpose remains constant. There are multiple studies and
reviews that cover a wide range of research questions and issues regarding components of
importance of outsourcing. This section is divided into the following parts. Firstly, the reason
Definitions of outsourcing:
Outsourcing laborers are used by some companies to lower their labor cost, for some
companies it is a better revenue realization and some of their investment may return because
of low labor cost, and by outsourcing laborers there will be a increase in speed of production
Assessment of the Effect of Outsourcing Laborers in Cost Management
HOLY ANGEL UNIVERSITY
and the quality of service of outsourced activities. The term outsourcing covers many areas,
some activities to an outside party while some remain in-house. Outsourcing can also involve
the transfer of both people and physical assets to the supplier, stated by (McIvor, 2009). It is
the process of hiring another individual or company to handle business activities for you.
Frank Siepmann (2013; managing risk and security page 2) stated that outsourcing is
nothing new, but it might have had a different name (outsourcing became a term for this in
1989; Mullins, 1996'). The concept of having another company to provide services for cost
savings can be traced back to the 1950s and 1960s. Companies started moving away from the
traditional model of the large integrated company that owns, manages, and
directly controls its asset. In those years until maybe the 1990s, companies mainly used
outsourcing as a tool to address skill needs that were not available within the
organization.While Mclvor (2010) stated that the business world and the organizations adopt
the principle of outsourcing to expand their market beyond their national boundaries. So
outsourcing can utilize as a new strategy for the business organization to run their ventures
more effectively. Oshri, Kotlarsky, &Willcocks, (2011) also states that The other definition
put forward by Vivek Sharma, Varun Sharma, K.S. Rajasekaran (2016), there has been a
major influence on the growth of the bank markets due to outsourcing capabilities and
It is no wonder that banks are big outsourcing players. Outsourcing is one of the tools
of the trade rather that an end itself, and can lead to process of optimization
Researchers stated that one of the biggest expenses that organizations have is
labor,expenses such as bonuses, office space, support personnel, computers and software
Assessment of the Effect of Outsourcing Laborers in Cost Management
HOLY ANGEL UNIVERSITY
licenses, internet access, training , recruiting and retaining employees and drinks that a
salaried employee gets add to the overhead costs. Organizations are turning to outsourcing
rather than adding their headcount (Strauss, 2004) Apart from actual cost savings, the
organization can achieve a leaner balance sheet by divesting assets that would have otherwise
been required in-house. This can have a favorable impact on the financial stability of the
Ade Asefeso (2011) addressed that the benefit of outsourcing for the company is that it take
heavy workload off and divide it to offshore companies to do part of the company's workload.
Because of this, the company will be able to focus on more important matters to make your
company more competitive in the world of business. But Virginia Doellgast and Elisa Panini
(Outsourcing challenge, pg. 16), stated that the effect or impact of outsourcing laborers from
offshore companies. The outcome of outsourcing, it decline in job quality because of lower-
skilled workers and ones who were easily outsourceable. Many individuals or companies
that provide outsourcing services are able to do the work for considerably less money, as they
don’t have to provide benefits to their workers and have fewer expenses to worry about. Ade
Asefeso (2011) addressed that cost reduction business outsourcing can help lower your
time business outsourcing let you take on projects right away and start on them immediately.
But Jan Drahokoupil (2015) argued that it is likely to generate additional coordination and
monitoring cost. Businesses are outsourcing their laborers with the interest of lowering their
labor cost, like salaries and employee benefits, but companies do not think of others cost that
will be affected if they outsource. Lowering labor cost means adding cost in other aspects
related in outsourcing the laborers Kenneth Boyd (2013) supported that there is more to
Assessment of the Effect of Outsourcing Laborers in Cost Management
HOLY ANGEL UNIVERSITY
outsourcing decision than just lowering costs. We also must consider what we will be giving
up, because there is a possible loss of control over a company's business processes over the
production of goods and services, because of the companies outsourcing strategy there will be
a lack of control sometimes or because of lack communication there will be a poor quality in
Based on the above definitions, an incorporated definition that includes all features of
outsourcing and provides a structure of orientation for this study as given below: -
outsourcing, a planned decision includes the contracting of activities or business that are non-
strategic and predetermined process that are essential for providing services and production of
goods by way of contracts and agreements with other companies that have higher capabilities
to do these activities with the focus of betterment in the competitive advantage. (Abdulkader,
2016)
It was pointed out by Fretyag et al., (2012) that outsourcing operations has become a
complex as they involve a lot of business functions. The firms have a tendency to outsource
mentioned about how outsourcing can bring changes to the organization. Some functions of
outsourcing are to be changed from time to time because the processes can’t remain same.
Sometimes the employees may have to consult with employees of foreign origin and so they
need to change their work methods slightly. Even though it looks simple the management will
have to take it critically serious because these changes will remain static throughout the
process of transition. The change in the management process aims at the correct
between the department of outsourcing and maximizing savings and values. To meet the
required.
Company focus is an important thing to improve the performance of the business. It’s about a
clear focus in the core competencies of the organization, and identifying the best fit with
service providers to meet the organization’s needs. Outsourcing provides flexibility and
economies of scale for contracted products and services with a goal of reducing costs and
improving efficiencies. The more a company is focused the more chances it has to see
different side that need improvement in order be better, effective and create a competitive
Assessment of the Effect of Outsourcing Laborers in Cost Management
HOLY ANGEL UNIVERSITY
advantage. The ultimate goal of every business is to grow as much as possible, to expand its
operations and to make as much money as possible. In order to truly expand, companies often
enter new markets. Outsourcing can utilize as a new strategy to run their ventures more
effectively and because of outsourcing it is easier for companies to be known and grow even
more.
Gerald Hanks (2008) said that the primary benefit that companies gain when they
outsource is a reduction in labor costs. When companies hire directly it will cost them more
due to expenses related to the employees. But with outsourcing, it is costless and because the
labor cost is reduced, the company will realize higher revenue and as a result a higher return
on investment
Outsourcing laborers is one of the most powerful trends and these activities conducted
for many reasons. It is referring to handing over the whole or part of human resource which is
Investigate several variables such as cost efficiency. Finally, the study will propose the
theoretical framework based on past studies conducted as well as to conclude the overall
study in terms of outsourcing laborers transferred to the service provider. However, transfer of
the employees in the current organization to the service provider cannot be guaranteed and
failure to do so will subject to the redundancy and liable for the retrenchment or layoff
benefits. Nevertheless, the discussion whether to outsource laborer function still occurs and
focusing in benefits and costs of outsourcing HR needs versus creating internal programs.
Assessment of the Effect of Outsourcing Laborers in Cost Management
HOLY ANGEL UNIVERSITY
According to Tom Kosnik2006 , still has authentic fact about the advantage and
organizations by an agreement to a third party Based on previous studies, there are many
human resources outsourcing frameworks available in the literatures. In order to gain batter
ideas on this, several selected human resource outsourcing frameworks will be analyzed and
examined. The studied by Azhar, examined the relationship between HR outsourcing and
positive HR outcome as presented in. The studied divided the HR outsourcing into four type;
This study is a descriptive research which involves the quantitative and qualitative
decision to outsource or not based from the companies’ data through survey and interview
with supporting information in their Financial Statements. This study will show how effective
The study aims to know the effect of outsourcing laborers in cost management and if it
brings positive or negative impact. Because researchers would like to elaborate every effect of
costs. The researchers would also like to determine the effectiveness of outsourcing in a
Assessment of the Effect of Outsourcing Laborers in Cost Management
HOLY ANGEL UNIVERSITY
certain organization if it is increasing productivity in their part and make every milestone of a
company more effective. The researchers aim to recommend some possible improvements in
outsourcing for picking the best possible laborers that they can hire in a certain company for
conducted to gather information and data.The study is under the case study classification
accurate way. The qualitative analysis is conducted by the researchers with a systematic
inquiry into meanings, attempting to interpret and explore attitudes, behavior and experiences
through primary and secondary data collection approach and quantitative analysis is primarily
concerned with the measurement of attitudes, behaviors, and perceptions. In order to collect
required information and data for the research process, the researchers has adopted the
The unit of focus of the study would be banks in Angeles City, Pampanga that outsource their
laborers, with a total number of 28 different Banks in Angeles City, Pampanga. The
In the data gathering of the study, the researchers will use interviews, surveys and the
financial statements of the banks that will allow them to gain sufficient information about the
effect of outsourcing laborer in the cost management of different banks. The question in the
interview does not just gives way in understanding and gaining knowledge but it will also
helped the researchers to confirm if the banks chosen for thestudy about outsourcing laborers
have the effect in the cost effectiveness, market efficiency and in the productive efficiency of
the banks in outsourcing their laborers, as well as if the delivering of the services are well-
organized. Some of data will be found in the financial statements of the banks that will give
the researchers a significant and dependable information's as to how it affects the cost
effectiveness, market efficiency and productive efficiency of banks through outsourcing their
laborers. In addition, the interview questions will give the researchers an insight as to how
Research data gathered by the researchers are primary and secondary sources. Primary
sources are gathered by interviewing the selected respondents from the different Banks in
Angeles City, Pampanga. Primary data are gathered for the purpose of knowing if the process
and result of outsourcing laborers is cost effective, market effective and has aproductive
efficiency. The researchers got the variables in the Financial Statements of the banks. The
main advantage of personal interviews is that they involve personal and direct Contact
rates, but interviewers need to have developed the necessary skills to successfully carry an
interview for the flow of the interview to be flexible. The research structured
Questionnaires were administered through the managers by the researcher during normal
working hour. Participation was voluntary for all respondents and confidentiality of responses
was assured.
The research used a semi-structured questionnaire as a guide for the researcher and
additional questions were made during the interview. The secondary data that will be used for
this research are form the various related studies and literature and throughout the internet to
support the research. Interview is one of the procedures we used because it is essentially,
The researcher’s data analysis was partially a qualitative and a quantitative analysis.
The researchers will use qualitative in interviewing a chosen respondents, which are
commercial banks, and review the responds of the chosen respondent if their outsourcing of
laborers are cost effective, market effective and productive efficient in their cost management.
The researchers also will use quantitative analysis where the researchers will review the
really a cost effective, market effective and productive efficient in their cost management and
will be based on the respondents interview and financial statement will determined if their
outsourcing is effective. The researchers will make a comparison between the year the
respondent did not outsourced and compared with it with the year where the commercial
banks start to outsourced their laborers up to the present year to find out also if their strategic
decision of outsourcing their laborers is cost effective, market effective and productive
Additionally, the results the researchers will be acquired in the comparison of amount
from the year they did not outsource and from the year they outsource, will be used to
evaluate the ability of the commercial banks strategic management in outsourcing their
laborers is the researchers will make a comparison between the year the respondent did not
outsourced and compared with it with the year where the commercial banks start to
outsourced their laborers up to the present year to find out also if their strategic decision of
Assessment of the Effect of Outsourcing Laborers in Cost Management
HOLY ANGEL UNIVERSITY
outsourcing their laborers is cost effective, market effective and productive efficient in their
cost management.
In this study, the researchers ensured that the participants are not subjected to harm in
any ways. Therefore, respect for the dignity of research participants was prioritized. The
participants were fully informed regarding the objectives of the study, the researchers
provided sufficient information and assurances about taking part to allow the participants to
understand the implications of participation and to reach a fully informed, considered and
freely given decision about whether or not to do so,without exercise of any pressure or
coercion.
during the interview. Confidentiality was also observed during the interview; the researchers
assured that all information acquired in the interview will be kept undisclosed.
Assessment of the Effect of Outsourcing Laborers in Cost Management
HOLY ANGEL UNIVERSITY
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Assessment of the Effect of Outsourcing Laborers in Cost Management
HOLY ANGEL UNIVERSITY
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