Outsourcing company - what is it and what services does it provide?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Currently, part of the staff for any organization can be provided by an outsourcing company. What are these services, and how such companies work - let's try to understand this article.

Prerequisites for occurrence

Outsourcing, as a separate line of business, emerged from the practice of conventional recruitment agencies. Ordinary employment agencies tried to employ their applicants for a permanent job. But there were also firms that needed workers temporarily, for example, to replace a sick employee or to perform some one-time work. The services of an outsourcing company are aimed precisely at filling this gap. The word "outsourcing" in translation from English means "external source" and gives an understanding of a third-party supplier.

On the other hand, the company needs to hire employees to perform a certain area of work. Such a firm does not need to inflate the staff and pay taxes for employees whose work will be useful only for a strictly limited time. Outsourcing will also come to the rescue here.company. The work that required temporary employees will be completed, and the company itself will pay off the outsourcing firm, without worrying about the calculation of salaries, bonuses and taxation of temporary employees.

How it works

Temporary recruitment services are currently provided by an outsourcing company. What are these services and how is recruitment done?

For example, an organization is preparing for a general tax audit. To prepare for this event, the accounting department may require temporary employees to double-check primary documents. For example, an organization applies to an outsourcing bureau with a request to allocate several employees for a certain time. The Bureau provides them with temporary employees according to the contract. These employees are not included in the staff of the organization, they do not receive a salary there - all payments are made only through an outsourcing bureau.

Types of outsourcing

Currently, there are various types of outsourcing, the range of services depends on the type and completeness of the functions transferred to a third-party organization. Distinguish between partial and full outsourcing. Partial - this is when part of the functions is transferred to third-party workers. If an employee of an outsourcing company takes on all the work in a particular department, then this type of service is called full outsourcing. What does it look like in practice?

If the problems of setting up and upgrading computers in enterprisesare shifted to the shoulders of a third-party enterprise - this is a complete outsourcing. If a third-party enterprise is responsible only for system administration and updating databases, and a full-time employee deals with hardware problems, repairs and updates, this is private outsourcing. The type of services required by the enterprise is specified in the contract signed by the outsourcing company. What is this document?

Typical outsourcing contract

The contract is the basis for formalizing the relationship and obligations between the customer of services and the outsourcing bureau. In the main part of the document on the provision of services for a fee, there are paragraphs on the delegation of functions, which will be carried out by the outsourcing company in the future. Service is carried out after the preliminary selection of candidates - the customer of services can insist on self-selection, interviewing and checking the qualifications of applicants for temporary work. Or maybe outsource these responsibilities.

Typical contract should contain the following items:

• privacy - customer trade secrets, non-disclosure clause and warranties;
• detailed requirements for a candidate for a position with a list of personal characteristics: availability of relevant education, necessary experience, work in a certain position, etc.;
• work conditions - list, volume, terms, etc.;
• outsourcing responsibility for poor quality services - fines, pen alties, returncash, other.

Popular outsourcing

Today, temporary employment firms specialize mainly in the following activities:

• IT-outsourcing - this means work on web programming, website development, maintenance, administration, creation and maintenance of unique software.
• Production outsourcing - involves the transfer of part of the production functions to the company. For example, an advertising agency commissions an outside organization to distribute flyers and flyers.
• Business process outsourcing – when it comes to outsourced employees to perform one-off jobs. For example, additional staff of accountants and lawyers during the tax audit.

Alternative job opportunities

For students or persons without a permanent place of employment, the opportunity to improve their financial situation is provided by work in outsourcing companies. Feedback from temporary workers suggests that such cooperation provides a small but constant income.

Outsourcing provides an opportunity to try on other activities and try to find yourself in another speci alty. It is also suitable for those who do not see themselves in a permanent place of work, who want to develop. It is also good for beginner businessmen - you can feel the process of production or sales from the inside, having worked as a temporary employee at an existingenterprise.

Outsourcing work base

Personnel is the main advantage that a good outsourcing company has. Feedback on the work of temporary employees is the capital of the company, with the help of which the company will constantly expand the client base of customer organizations. Thanks to the distraction from secondary tasks, full-time employees can focus on achieving the main goals that the company's management sets for itself.

Outsourcing Benefits

The undoubted advantage of such cooperation is cost savings. When concluding an agreement on the involvement of third-party workers, we can safely predict a reduction in costs by about 20%. These savings come from a reduction in investment in intangible resources such as training, internships for a new employee, maintenance of their own staff, reduction in the staff of administrators and accountants for timesheets or payroll. The costs of the enterprise are reduced due to the temporary disability of the employee - in case of illness, the outsourcing bureau simply sends a new, no less qualified employee. And if a layoff is coming in the state, you can try to substitute an outsourcing worker for a new amount of work and analyze the efficiency of his work in terms of energy costs.

Additional benefits

Outsourcing would also be a good option for foreign enterprises or for firms opening new activities. Foreign specialists may not be fully aware of the intricacies of legal and accounting support adopted in our country. For the competent management of economic and tax accounting, outsourcing workers are invited, who will perform their duties until the appearance of full-time employees.

When developing new activities, hiring temporary workers will help the company's management to evaluate live the profitability of a new undertaking, calculate the necessary costs and see the effectiveness of a new line of activity “idle”.

Disadvantages of outsourcing

Of course, such cooperation has its pitfalls. First of all, it is a constant dependence on another enterprise. If a temporary employment agency loses its staff, then all this will immediately affect the reputation of the company that has concluded an agreement with it. There may be some breach of confidentiality - temporary employees can go to work at a competitor firm and unwittingly reveal the commercial intentions of the company where the outsourcing company sent them last time. What this information is and how it will be disclosed depends only on the personal data of the employees sent by the outsourcing company.

Reviews from employees working in the staff of the customer firm can also affect the effectiveness of outsourcing. There is also a risk of non-acceptance of temporary employees by the staff of the company. Perhaps temporary workers will be seen as competitors rather than helpers. This imbalance in relationships can be bad for cooperation.

How a recruitment company works

A good example of a professional hiring and offering of temporary employees is United Outsourcing Company.

UAC positions itself as a diversified holding of a new type, offering personnel assistance to enterprises involved in various economic sectors. The company's talent pool is data on the many employees of basic and high qualifications that can be involved in various areas of economic activity.

Basic types of UAC services

The combined outsourcing company is currently offering its recruitment services in:

• accounting and legal support - allow you to save on employment and training of full-time staff, get efficient work without spending money on advanced training for permanent employees;
• information and technical support - allows you to provide software support for all existing computer networks;
• call-center services are a comprehensive information support and an effective communication channel for the development of the company. An experienced call center operator can create a favorable reputation for a company or brand, increase the loy alty of company partners and customers;
• provision of own business premises for business meetings, conferences, meetings and presentations;
• domestic and administrative services - implies the centralized provision of any business entity with low-skilled personnel -cleaners, movers, waiters, dishwashers, cook assistants, maids, couriers;
• protection and security of the premises are provided by carefully selected personnel, using which you can significantly reduce the risk of theft and damage to property.

This versatility allows UAC to comprehensively support the customer, offering him the maximum of services. Not surprisingly, the company concludes over 500 new contracts every year, of which about 90% are extended for the next period. The efficiency of service provision allowed the company to enter foreign markets - various outsourcing organizations operating in Kazakhstan, Armenia and Belarus operate under the United Outsourcing Company brand.

Employee reviews

Many online reviews about UAC indicate that this organization does not often come across jobs, and getting a long-term position there is quite problematic. Nevertheless, regular UAC employees say that the flexibility of the schedule and the constant surfing on other companies allow you to explore your own profession from various angles to the subtleties.

As you can see, the diversity of services provided by temporary employees allows both the client company and the outsourcing company to stay afloat. And you should not speak contemptuously about temporary work not in your speci alty, which outsourcing can provide you with at this time. After all, a new experience will certainly help you soon finda permanent job or start your own business.