Read on to find out how an organization can prepare for outsourcing provisions, and which methods are the most effective when working with the third party providers (PEOs).
According to Archer Solutions, the growth rate for contingent workforces is 15-25% p.a., whereas other traditional employment is only growing at 1-8% p.a. The popularity of outsourcing employees continues to increase, with PEOs firmly positioning themselves within the resourcing market.
How to Choose the Best Provider
According to CIPD, when selecting the best PEO for your company you should:
- Establish a shortlist of preferred suppliers.
- Identify the ‘actual’ person who will be the key relationship manager.
- Determine preferred contract length.
- Build in contractual flexibility where possible.
The level of service, and therefore costs, will need to be assessed and the outsourcers policies ought to be in line with the company strategy. Communication with organizations currently using outsourcing providers will demonstrate the satisfaction levels of the services used. Recommendations from businesses will provide an insight into how efficiently a specific PEO is at recruiting employees. You will also need to evaluate the geographical and cultural fit with the providers, to ensure that the outsourced employees will be a good fit within the organization.
Protect your Brand
Look after your full time employees and keep them in the loop with the company’s outsourcing activity. They too should have a say in the strategy, so that procedures can run more smoothly and outsourced employees can integrate quickly into the workplace. “The fluidity that allows businesses to seek the most cost effective means of production is, in many cases, impacting on job security, terms and conditions, autonomy and job satisfaction, levels of engagement and employee voice amongst the workforce,” says ACAS.
The incorporation of outsourced employees into the workforce can be hugely beneficial if the right person is placed into the right job. The PEO guidelines should work synonymously with an organizations employment policy, so that the best people are chosen. This is an essential factor when selecting which PEO the business is going to utilize, as essentially they are representing your brand.
Positives vs Negatives
There are numerous factors to consider before hiring and managing outsourced employees. Firstly, the contractual agreement with the provider; these are typically five to ten year contracts. Management should unanimously agree that the PEO is a good fit for them and that they will provide them with the most effective workforce. According to Startup Smart, “people need to realize even though they turn to outsourcing to meet a skill gap or demand, smart outsourcers know they’re hiring people rather than positions.” The right people need to be placed into the right positions, to optimize on the employee outsourcing.
Although there are risks and some hidden costs, outsourcing can actually reduce unnecessary overheads. As the employees are used to working to tight deadlines, they are more likely to work unsocial hours to complete tasks, and are more flexible than contracted workers.
It is in the best interest of an organization, that all aspects of recruitment and outsourcing work together harmoniously, so that an agreed set of quality standards are adhered to. This will ensure uniformity within the brand, and that a common goal can be achieved. Forbes says that, “ultimately, it’s incumbent upon your team to make sure everyone’s interests are aligned and moving towards the same end goal.”
The availability of advice and guidance will help support existing and new employees. Educational resources and training should be easily accessible. The company values should be instilled at the earliest opportunity, so that the workforce is working together to achieve the same objectives.
It’s not an easy process, and the outsourcing may have some initial teething problems, but “if you can manage to develop a deep partnership where interests are aligned, teams are supported and your brand is well represented, you’ll find that you’ll be able to punch well above your weight in the marketplace,” says Forbes. When an effective partnership is forged between a company and an outsourcing provider, the alliance can bring plenty of benefits.
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