OUTSOURCING Outsourcing simply means obtaining work previously done by employees inside the company from sources outside

the company. If someone has specialized in an activity which is not strategically critical to the business, and is able to do that cost effectively, it is better to get it from outside. The organization gets benefitted in the form of excellent quality, reliable supply and in at low price. The performance by outside parties, on a recurring basis, of tasks that would otherwise be performed in-house. Today many Indian and overseas companies have realized the importance of manpower outsourcing. Outsourcing means subcontracting a third party company for the completion of a task or an assigned project. TYPES OF OUTSOURCING:Business Process Outsourcing Information Technology Human Resources Sales & Marketing Finance Administrative All Others

Outsourcing is changing the way HR departments operate as well. Technology makes it easy to outsource HR activities to specialist service providers, by allowing service providers real time internet based access to the employers human resource information database. Payrolls(salary administration), benefits, applicant testing and screening, carrying out reference checks, exit interviews, employees training etc, are some of the popular human resource tasks that are being outsourced currently . Human Resource Outsourcing Human resource outsourcing is process in which a company utilizes the services of a third party to care of its HR functions. A company may outsource few or all of its activities to a single or combination of service providers. Eg, the decision of Unilever to outsource its HR activities- mostly transaction oriented such as pay roll administration, applicant tracking, training and development, record keeping, performance appraisal follow up etc.Accenture appears to be in the right direction. These are basically people and effort intensive activities but are quite routine in nature. Such repetitive work can easily be turned over to third party specialist- who would be able to deliver excellent result, leading to significant savings in cost and effort.

Allow HR to focus on core competencies 2. Creates strategic opportunities for HR professionals 3. Improve quality, efficiency, and effectiveness 4. Relief from administrative burdens 5. Reduce operating costs Employee outsourcing is a practice that many companies around the world are adopting for to achieve greater organizational flexibility, improved efficiency, reduced overheads and a hassle free HR management. From clerks to top management employee outsourcing is fast catching in the corporate world, says an IIM-A professor who is currently studying new t rends in the outsourcing industry. Employee Outsourcing effectively relieves the management of client organizations from day to day HR operations management issues, saving their time and enabling them to focus on more strategic and value adding initiatives.
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Manpower outsourcing is required when a firm needs to complete a task in which they don't want to hire new employees. Outsourcing is one of the most efficient ways to save cost. Currently many information technology (IT) firms and call centers rely on outsourcing. In outsourcing, an external firm or company carries on management or development of a product on behalf of another firm. The concept started when companies were reluctant to hire new employees for short-term jobs. Hiring new employees means more work for HR people, security checks, and other overheads, which was not a worthy undertaking for a small project. Manpower outsourcing answered this problem, as in this case the primary company doesn't hire the worker directly. The external firms who supply the skilled workers are called manpower-outsourcing firms. Lack of skilled workers is another scenario when manpower outsourcing is required. Many IT firms, at times, require people well- versed in specific technology, which they might not, otherwise, have in their resource pool. In such cases, they can hire skilled professionals also called consultants to complete their tasks.

Following are the services provided by the consultancies houses as part of Employee Outsourcing for their clients:Or following are basic HR functions that are outsourced by an organization as part of employee outsourcing programme. Recruiting, hiring and outplacement of employees. Completion of joining formalities, background checks and verifications. Maintenance of personal files. Processing of salaries and pay packages. Income tax management for employees. Medical benefits / insurance management. Prerequisite handling. Terminal benefits management. Performance appraisal result coordination. Training needs analysis and facilitation. Subsidies and employees loan processing and custodial services. Staff surveys and motivational analysis. Satisfying EOBI, social security and other work place regulations. Indemnifying (securing against future loss or damage) the organization of all statuary legal obligations.

Manpower / Employee Outsourcing Procedure Once a company decides upon outsourcing, they look for an appropriate supplier and ask for Request for Proposal (RFP). Sometimes RFPs from multiple vendors are requested. In RFP, vendors cover the process that they will follow to complete the project, current financial position of the company, technical ability of its employees, and all the information, which can help win over the confidence of the company. Then the company negotiates with companies and decides on their "best and final offer" (BAFO). Both the parties finalize the contract and sign it. Next step is the transition of knowledge and information from the source company to the company providing manpower. Delivery schedule is decided for the delivery of the product. Once the project is finished, the source company can decide to terminate the contract or may renew the contract.

Some of the benefits of outsourcing are listed below:

1. First and by far the most important aspect is cost reduction of development of overall project. 2.Hiring manpower from an outsource company who has good and knowledgeable skilled professionals in the field, can improve quality of the product. 3. Lowering pressure on HR department of hiring and maintaining skilled professionals.

4. Companies can put more emphasis on designing and research of a product rather than putting effort on meeting deadlines.

Demerits along with benefits people also see some demerits of outsourcing. Some of the disadvantages of outsourcing are:
1. Employee outsourcing can impact workers or employees of the company. Sometime companies cut jobs in their companies and outsource the work to a third party. 2. Most often outsourcing companies are not able to meet the standards and timelines. 3. There are also concerns related to fraud and security, as there is always a chance of identity theft or misuse of sensitive information. 4. Future Companies today compete to sustain their clients and yet provide a quality service. The only way they can survive is by reducing their running cost. IT is one of the best and most efficient ways to reduce the cost of development of a project. 5. If a temporary employee is exploited at a work place, the staffing solution

company may not support him or her as nobody likes to lose a client firm.