Outsourcing and outplacement

1. Outsourcing and outplacement Module # 4

2. OUTSOURCING • Outsourcing is contracting with another company or person to do a particular function. • Almost every organization outsources in some way. • Typically, the function being outsourced is considered non-core to the business • The outside firms that are providing the outsourcing services are third-party providers, or as they are more commonly called, service providers.

3. Contingent employees: temps, consultants Independent Contractor The Decision to Outsource Work System Design Insource the Work Outsource the Work

4. The process of outsourcing • It encompasses four stages: • Strategic thinking, to develop the organization's philosophy about the role of outsourcing in its activities; • Evaluation and selection, to decide on the appropriate outsourcing projects and potential locations for the work to be done and service providers to do it; • Contract development, to work out the legal, pricing and service level agreement (SLA) terms; and • Outsourcing management or governance, to refine the ongoing working relationship between the client and outsourcing service providers.

5. Advantages of Outsourcing • Allows a business to focus on core activities • Streamlines a business' operations • Do not have to worry about continually introducing new technologies • Improves service quality • Free of Industrial Relations problems • HRP not required much in advance • Increases the control of your business • Makes the business more flexible to change (i.e. demand

6. Disadvantages of Outsourcing • The fear of the service provider ceasing to trade (bankruptcy, etc) • You may lose control of the process • Creates potential redundancies • Other companies may also be using the service provider. • The loss of talent generated internally • Employees may react badly to outsourcing and consequently their quality of work may suffer

7. Outsourcing: Considerations Outsourcing may not be appropriate when: 1. The task is a core activity critical to strategy or technology. 2. Task is highly interdependent with core activity due to technology or work design. 3. Task requires great deal of firm specific human capital or access to proprietary information. 4. Tasks where the employees work in close proximity to regular, core employees and are similar socially to them.

8. Examples of outsourced activity • Information Technology • Human Resource functions • Finance functions • Legal services • Manufacturing • R & D.

9. HR outsourcing areas • Recruitment and Staffing • Employee Data Administration • HRIS • Training and Development • Performance Management • Compensation Management • HR Consulting

10. HR outsourcing areas • Health & Welfare • Annual Enrollment • New-hire and Life Event Processing • Post-employment Administration • COBRA, FSA, Reimbursement Plan • Compliance Services • Plan Management • Traditional and Internet-based communications

11. HR outsourcing areas • Payroll • Time and Attendance • Tax Reporting and Filing • Employee and Wage Verification • Earnings and Deductions • Garnishments • EFT, Third-party Pay

12. HR outsourcing areas • Stock Plans • Plan Administration and Record keeping • Trade Execution and Custody Services • Benefits adminstration • Risk management • Workers' compensation • dispute resolution, • safety inspection, • office policies and handbooks.

13. HR outsourcing areas • Background interviews • Exit interviews • Wage reviews.

14. Outplacement

15. Outplacement • The process of facilitating a terminated employee's search for a new job by provision of professional services, such as counseling,resume writing,alternative career plans etc paid for, by the former employer • It helps in easing employees out of a company by providing paid assistance in finding them new jobs

16. Outplacement the new strategy • Job cuts have become common in the corporate sector but employers do not leave their fired staff in the cold. • There are lot of psychological issues involved during layoff . • Managements are not comfortable handing pink slips either. • Many are hiring what are called outplacement agencies to find suitable new openings for their erstwhile employees

17. Outplacement services offered • Psychological counselling to help the employee come to terms with his or her new ”unemployed state” • Career counselling • Help in resume building • Retrofitting the resume –preparing three or more different resumes • Access to office equipment • Sharpening their negotiation skills • Skill identification, training and negotiating with the new employers • Research on the company and Prepare for the interview

18. Motorola relied on outplacement in 2006 as it was closing down one division and eliminating 150 employees in the process. • A job fair was held on Motorola’s campus with representatives from other companies and recruiters. • Presentations and interviews were done . Those who cleared the interviews were placed with other firms • HUL seeked Outplacement agencies help while they decided to shift their foods division in Bangalore to Mumbai for their employees .

19. CONCLUSION • Companies forced to lay off people are turning to outplacement firms • to help their employees cope with the trauma • find other jobs • ease their transition to the next workplace

20. With the current global economic downturn and tech slowdown in India, making outplacement a revenue-generating model. • CareerNet Consulting, for example, said it did 400 outplacements over the last year alone