Challenges In Resource Outsourcing

Challenges In Resource Outsourcing

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Human resource outsourcing offers plenty of benefits. Outsourcing has provided corporations with cost saving finesse and peace of mind to handle the core activities. But if you are looking for the best human resource outsourcing service for your company, you need to keep certain challenges in mind too. This is crucial to find the right service for you.

Let’s have a look at outsourcing problems and solutions-

1.Choosing The Right Service Provider

The first and foremost challenge faced is finding the right service provider. If you overlook even a single flaw, it can prove be disastrous over the period of contract. Resource outsourcing service should be selected while keeping in mind the requirements and output needed by the organization. Going for a test run before committing to a long term project is appreciable. Also, the ‘Balance Card Score’ method can be applied to the performance evaluation.

2.Project Control and Decision Making

Employees of a business might wonder if they have full project control and authority in the decision-making rights of a business. But, in resource outsourcing, they may not support any changes in the management of the project.

Let’s cite a famous case of outsourcing contract failure here between the State of Indiana and IBM. The client’s representatives interfered with IBM’s management of subcontractors. In this case, the client did not support any changes in project control or management of the project and it eventually led to a contract dispute.

The best way to overcome this challenge in resource outsourcing is to define the outsourcing contract clearly. It should mention to what extent employees of outsourcing companies and clients have control over the project and make decisions.

3.Intellectual Property and Data Security

With outsourcing, comes the risk of losing intellectual properties such as business plans, trade secrets, etc. There is a risk of violation of data security and loss of developed application or its rights.

While working with human resource outsourcing companies, you need to share a lot of information with the company. It might include your business, core operations, business assets, and unnecessary details like resources or tools while working. But you can easily overcome this challenge by signing legally binding documents like non-disclosure agreements.

4.‘Outsource and Forget’ Doesn’t Work

In earlier times, companies used to leave all of the non-core activities to the resource outsourcing companies. But these practices have been long gone. There are plenty of sectors that require companies’ attention even if the services are outsourced. Even if the non- critical operations have been assigned to a third party, organisations still need to be on their toes. It is necessary to face any exigency at the right time.

5.Cultural Concerns

While globalizing companies, there might be plenty of talent available but it has an obvious resource outsourcing challenge due to the cultural barrier. When businesses outsource to offshore destinations they have to cope with two types of differences- corporate and regional differences. These cultural differences may impact the communication, interaction, understanding, interpretation, productivity, and even commitment of the team.To overcome this challenge, businesses should provide awareness to their employees through training programs. Let your employees know about the regional and cultural differences and norms of the outsourcing service providers. Similarly, outsourcing providers can run programs targeting cultures of clients. 

Human resource outsourcing offers plenty of benefits. Outsourcing has provided corporations with cost saving finesse and peace of mind to handle the core activities. But if you are looking for the best human resource outsourcing service for your company, you need to keep certain challenges in mind too. This is crucial to find the right service for you.

Let’s have a look at outsourcing problems and solutions

1.Choosing The Right Service Provider

The first and foremost challenge faced is finding the right service provider. If you overlook even a single flaw, it can prove be disastrous over the period of contract. Resource outsourcing service should be selected while keeping in mind the requirements and output needed by the organization. Going for a test run before committing to a long term project is appreciable. Also, the ‘Balance Card Score’ method can be applied to the performance evaluation.

2.Project Control and Decision Making

Employees of a business might wonder if they have full project control and authority in the decision-making rights of a business. But, in resource outsourcing, they may not support any changes in the management of the project.

Let’s cite a famous case of outsourcing contract failure here between the State of Indiana and IBM. The client’s representatives interfered with IBM’s management of subcontractors. In this case, the client did not support any changes in project control or management of the project and it eventually led to a contract dispute.

The best way to overcome this challenge in resource outsourcing is to define the outsourcing contract clearly. It should mention to what extent employees of outsourcing companies and clients have control over the project and make decisions.

3.Intellectual Property and Data Security

With outsourcing, comes the risk of losing intellectual properties such as business plans, trade secrets, etc. There is a risk of violation of data security and loss of developed application or its rights.While working with human resource outsourcing companies, you need to share a lot of information with the company. It might include your business, core operations, business assets, and unnecessary details like resources or tools while working. But you can easily overcome this challenge by signing legally binding documents like non-disclosure agreements.

4.‘Outsource and Forget’ Doesn’t Work

In earlier times, companies used to leave all of the non-core activities to the resource outsourcing companies. But these practices have been long gone. There are plenty of sectors that require companies’ attention even if the services are outsourced. Even if the non- critical operations have been assigned to a third party, organisations still need to be on their toes. It is necessary to face any exigency at the right time.

5.Cultural Concerns

While globalizing companies, there might be plenty of talent available but it has an obvious resource outsourcing challenge due to the cultural barrier. When businesses outsource to offshore destinations they have to cope with two types of differences- corporate and regional differences. These cultural differences may impact the communication, interaction, understanding, interpretation, productivity, and even commitment of the team.

To overcome this challenge, businesses should provide awareness to their employees through training programs. Let your employees know about the regional and cultural differences and norms of the outsourcing service providers. Similarly, outsourcing providers can run programs targeting cultures of clients.