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. 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.
Concept of Manpower 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.
Manpower 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:
Demerits Along with benefits people also see some demerits of outsourcing. Some of the disadvantages of outsourcing are:
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.