Human Resource

Outsourcing

Prepared By: Ralch A. Cuaresma

Outsourcing

What is Outsourcing?
■ Outsourcing is a strategic decision to give a task
or activity to an independent contractor who
determines how best to do the task or activity.
■ The firm and the independent contractor become
partners and may establish a long-term
relationship.
■ Examples of outsourced activities: IT, HR, Legal
services, Manufacturing, R & D.
■ Note: Outsourcing transactions are done in the
market.
Outsourcing

Outsourcing Advantages:
■ Better quality people and knowledge may be
applied to an activity or task by the outsourcing
firm.
■ Reduction in administrative costs may be
possible when certain tasks are outsourced.
■ Outsourcing certain activities and employees
that do not fit with company culture may be used
to preserve a strong culture or employee morale.
Outsourcing

Outsourcing Disadvantages:
■ Outsourcing may lead to loss of control of
certain activities which may be a problem on
time sensitive projects for example.
■ Outsourcing an activity may result in loss of the
opportunity to gain knowledge and information
that may have general application to other key
processes and activities.
What is Outsourcing?

■ Outsourcing -
■ “the strategic use of outside resources to perform
activities traditionally handled by internal staff and
resources”

■ Why Outsource?
■ Provide services that are scalable, secure, and
efficient, while improving overall service and
reducing costs
Reasons for Outsourcing
■ Traditional role - reaction to problem
■ Reduction and control of costs
■ Avoid large capital investment costs
■ Insufficient resources available
■ Modern role – business strategy
■ Allows company to focus on their core competencies
■ Keeping up with cutting-edge technology
■ Creating value for the organization and its customers
■ Building partnerships
Problems With Outsourcing

■ Loss of Control
■ Confidentiality and security
■ Selection of supplier
■ Too dependent on service provider
■ Loss of staff or moral problems
■ Time consuming
■ Provider may not understand
business environment
■ Provider slow to react to changes
in strategy
Outsourcing

Critical Thinking Questions

1. The university hires many
contingent faculty (“adjuncts”) to
teach courses on a part-time
basis. What challenges does this
present to university
administration? Why are these
adjuncts hired in the first place?
When is the right time to outsource?

■ A Company Should Outsource When You Need

to Focus on Your Business-Critical. Adding
people to your team to do skills not part of your
core business can be daunting, time-consuming
and expensive, not to mention limiting to your
business growth.
 Three Phases of Outsourcing
■ Decision – When a company to reduce costs and increase
efficiency by hiring another individual or company to perform
tasks, provide services, or handle operations that were
previously done by employees within the company.
■ Transition - is usually the first stage in the outsourcing process
following signature of the outsourcing agreement and involves
the new supplier taking over responsibility for the provision of
the outsourced services. (Movement)
■ Operation - he practice of operational outsourcing involves
using a third-party company to help complete the operations
needed to build a successful business.
 ACTIVITY

What is Philippines famous outsourcing?

Why Philippines is being chosen in outsourcing?

■ The Philippines is known to be the “BPO capital of the

world.” Due to its fast growth and development, the BPO
industry in the Philippines is still one of the top outsourcing
destinations in the world.
■ Due to the relatively low cost of living in the country,
the operational costs can be significantly lower than
what foreign investors pay in Western countries. This
makes the country more appealing as an outsourcing
destination for many companies around the world.
 The Good of Outsourcing to a Company

■ Outsourcing to the Philippines with Outsourced

means that you save money on recruitment, HR
and staff salaries. We also provide all the
infrastructure and resources your offshore
employees need to fulfil their roles with your
company, saving you even more money.
The future of the world is in my CLASSROOM today!