OUTSOURCING | Articles | Umkhonto Labour Holdings

Why outsource?

Business outsourcing, flexible labour relations and atypical employment are global labour trends which South Africa must follow to remain globally competitive.

As the skills shortage in the country becomes heightened and the labour legislation more demanding, outsourcing companies presents an alternative. This includes but is not limited to HR outsourcing, IS outsourcing, outsourcing IT, manufacturing, consulting, technology, project management, web development and Payroll outsourcing.

What are the benefits of outsourcing?

• It reduces operating expenses, thereby enhancing competitive
  capabilities
• It keeps the headcount to a minimum
• By removing the burden of non-revenue generating activities such as
  company human resources, administration, payroll and other related
  legislative costs and requirements, companies can focus on their
  core business issues, thereby decreasing costs and increasing
  performance
• An external provider can do the work more cost effectively than the
  job can be done in-house
• Staff can be managed more efficiently through executing and meeting
  workplace demands
• Outsourcing provides access to best practice expertise from a
  specialist provider
• A company that expand rapidly but growth may not be permanent,
  operating in a shift work situation, uneven workloads throughout the
  year and a desire for a variable cost structure can now be managed
  more effectively
• When workers are no longer required, and the jobs are made
  redundant, they can be removed off site

Outsourcing jobs and your administration functions will reduce operating costs, increase productivity, improve company processes and enable management to concentrate on their organisations core strategies, services, and unique points of differentiation.

These functions are often detailed, repetitive, time consuming and requires a high level of accuracy and competence. The daily duties involve running repetitive daily administrative duties, adhering to recurring activity processes that require high levels of resources that demands efficiency. These are all practices which are extremely expensive to maintain and execute.

By owning the process from initial needs assessment, through planning, design and development, to ongoing management and implementation, most outsourcing companies offer a comprehensive platform which creates a value stream with a clear goal of satisfying the client`s needs.

Due to this the fact that every business centre is unique and has its own set of needs, the solution needs to be tailored to meet to client’s requirements. This achievement is based on extensive engagements and the information gleaned early in the process. Each process begins with an analysis of your labour, administration and HR requirements. This is where we identify the level of service that is required to ensure that the proposed recommendations satisfy all your needs and expectations. Only when the process has been mutually accepted by all parties will the solution be implemented.

Human Resource Management refers to how people are managed within an organisation. The field has been successful in moving from a traditionally administrative function to a strategic one that recognises the link between the employees and the company’s success.

In the past many functions were performed by Human Resource Managers. There is now a trend in which businesses are shedding all functions that are not directly related to their core business, with the Human Resource function now being outsourced.

It is important to determine both current and future company requirements for both core employees and the contingent workforce in terms of their skills/technical abilities, service, support, competencies, flexibility etc. The analysis requires consideration of the internal and external factors that can have an effect on the resourcing, development, motivation and retention of employees and other workers.

External factors are issues that are out of company’s control and include issues such as the economic climate, current and future trends of the labour market e.g. skills, education level, government investment into industries etc. On the other hand internal influences are broadly within the company’s control whereby it can determine and monitor, for example the culture within an organisational which is underpinned by management behaviours or style, environmental climate and the approach to ethical and corporate social responsibilities.