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For
example, if company decides to buy a specific piece
of machinery necessary for the operation of the
company, then the machine purchased will have its
projected output, with relatively stabile
performance within the projected life span. The
performance of the machine is easily predictable. We
know the purchasing cost, capacity, maintenance
requirements and approximately the moment when the
machine needs to be replaced.
With
human resources the situation is quite opposite.
Employment does not have that huge initial cost. But
the employee will cost a lot of money on the long
run. Employee needs the constant training.
Employee’s performance output can vary
significantly. Yet no machine still can replace the
human resource intelligence, creativeness, wisdom
and experience. Human resource is precious for the
company, since experienced and trained employee is
difficult to be acquired.
Still,
growing base of the company employees can be a
burden at the moments. If the company have specific
business with seasonal activity fluctuations, then
the employee base that is needed for the peak season
activities can be a cost burden during the off
season period. Simply you are paying employees that
are not fully utilized.
Another
problem of a large employee base is the focus
loosing. For example, the sales oriented company
have a strong need for developed sales, marketing,
financial and logistic department, but does not
really need to put significant focus to supporting
services as maintenance, security, cleaning,
canteen...
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The
solution for modern company is the human resource
outsourcing of seasonal and non-vital employees.
Simply, hiring the external agency that deals with
human resources outsourcing that will "land"
employees of needed qualification is a easier way
than giving the employee contract to every
individual engaged in business activity. Actually,
there is no real employment by the company, since
the company is renting and paying for the given
service of human resource outsourcing, instead of the employment salary.
The
human resources outsourcing have positive business
impact. There is no need to seek for employees
directly. There is no need for interviewing,
administration, while the training is either minimal
or is not needed at all. All this should be provided
by the external agency that enables the human
resource outsourcing service. Also this type of work
force engagement is cost efficient, since you engage
service when you need it, while you do not pay the
service in the period when is not needed.
On
the other hand, the human resource outsourcing has
its drawbacks. Outsourced employee is not directly
motivated for the work process. Supervision is
indirect. Motivation of outsourced staff is lower
than when it comes to regular permanent employees.
The
key is to use human resources outsourcing in a
balanced way, as it is required by the business
itself. There is no universal blueprint of setting
the layout of human resources across an
organization. Basically, the human resources
outsourcing should be tailored according the
specifics of the company.
This
is an example of the Sales oriented organization
that outsourced some services partially, while some
other fully...
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The
human resources
outsourcing pattern can be
different for some other organization. For example,
the company that is oriented on research, development, and
production can actually outsource the sales
department. Usually, these companies are not well
know, while their products are well sold. The Compal
Electronics company is probably not well known, even
for the people who consider themselves to be
computer literate. In fact, Compal is the second
biggest producer of laptops in the world! Reason why
this company is not perceived as well known brand is
the fact that they fully dedicated to development
and production, while leaving outsourced companies
to brand, advertise and sell laptops.
So,
there are many different ways to utilize human
resource outsourcing. The outsourcing of human
resources should be done according the specifics of
each business needs. Primarily, human resources
outsourcing should be mostly focused on seasonal and
non-vital functions. Although, the Compal case shows
how the outsourcing of the vital business function
as the sales and marketing can be possible. Whatever
method of human resources outsourcing is chosen it
is important to achieve the organizational
efficiency, flexibility and cost efficiency that
will bring the completive advantage to the company.
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