The title may not appear business-like, but stress among large companies is common. For companies under stress economically, or have their arms stretched too far this outsourcing is the only recourse. No company truly wishes to outsource major functions of the business. But outsourcing does make sense when you find it a logical step to alleviate stress or to enhance focus on core activities.
Outsourcing is like handing over
a function to the backend service provider. But while you outsource a non-core
function to a service provider, BPO is handed over a core function. Remember
BPO is always concerned with international practice and not done domestically.
Thus, outsourcing is done in the
case of noncore functions only. The motive behind both is to destress in case
of limited resources or to improve profit by sharing a function. Companies
facing stiff competition resort to many cuts, and often lay off several
employees. Over-hiring is carried out in times of great profitability, it does
not appear to be a financial burden during happier times.
When profit declines due to heavy
cost burden or due to competition from the rivals the management looks towards
apt solutions. The first step that major companies usually take is to lay off.
While in modern economies and the developed world "lay off" is easy,
it is not so in case many developing economies.
Labor laws can complicate matters after the layoff, and can create
unprecedented liabilities.
Hence it is always wiser to hire
with caution in many countries where layoff is not an easy solution. Recently
we have seen a spate of layoffs by technology companies like Google. Although
this act appears all hunky dory, it will not be the case where ever labor
protection laws are stringent.
Hence it is always wiser to outsource
non-core functions from the very beginning to avoid the saturation tap. The workforce is important, but a wiser
approach that is cautious while hiring can lead to a better future for the
organizations.
For most companies, payroll
management is a non-core activity. The process requires investment in many
power for accounting and that manpower does not assist in core function. Thus,
when the going is not good this every down-the-line staff may become a burden.
Even though there is automation software like Spine HRMS large companies prefer
to outsource payroll management.
Smaller companies can use
automation software like Spine HRMS and manage employees' salaries. Spine HRMS
is a comprehensive software and is equipped with many features that make it
dynamic and holistic.
Larger businesses and corporates
with thousands of employees prefer to outsource payroll management to able
companies. For these companies managing employees and HR is the core function
and they specialize in that. Thus, companies benefit from the service provider's
expertise, reduce employee burden, focus more on core functions and benefit
immensely. However, this act should be carried out with caution as there have
been cases whence the service provider has not been at optimum best or refused
to co-operate.
