5 Challenges to Outsourcing Manpower (and How to Overcome Them)

Many professionals will certainly agree with this quote by Mr. N.R. Narayana Murthy, Chairman of Infosys Ltd. “You must treat your employees with respect and dignity because, in the most automated factory in the world, you need the power of the human mind. That is what brings in innovation. If you want high-quality minds to work for you, then you must protect the respect and dignity.”

As simple it may sound, managing manpower effectively could be quite daunting.

We stay in a rapidly changing, complex environment and with the introduction of stricter labor markets; economic uncertainty like recession and globalization are reasons sufficient enough to make us concerned

In this article, Mr. Atul Mahajan, Director Trendsetters Facilities & Technical Services (TFTS) which is Delhi’s leading manpower and labour outsourcing company.

Here are 5 challenges of outsourcing manpower and ways to deal with them.

  1. Disconnection With The Staff:

The term “man” isn’t part of the title “manpower resources” for nothing. Manpower representatives are critical to helping employees feel like they have a voice and are valued. Assigning these duties to computer software or to an off-campus third party can lead to staff feeling disconnected or discontented from their employers and employers not fully understanding their staffs’ requirements.

  • Problems that take longer to fix:

In circumstances where an error has been made – say with payroll or with the number of vacation days an employee has – using a third-party vendor can mean a long wait before the error is fixed, leaving the employee angry or disappointed. In addition, when an employee quits and the business is using an outside recruiter, the hiring and training process can take longer than an in-house manpower department, which can be more proactive about hiring and training employees before positions even become open.

  • Reduced Flexibility:

In smaller sized enterprises especially, manpower representatives and managers can help employees out in a pinch – paying out unused vacation days in an emergency or letting them adjusted into next year’s leave early. When manpower system becomes automated and/or outsourced, these types of accommodations for loyal workers can be difficult if not impractical.

  • Security Concerns:

Many service providers use web-based software to handle manpower functions, leaving sensitive employee data vulnerable to security threats as well as crashes. Checking your vendor’s security record and calling references is essential will looking around for any web-based manpower services.

  • Limited Choices:

Organizations using a Professional Employer Organization (PEO) to handle everything from hiring to sacking and payroll to insurance might find that they have limited options when it comes to selecting benefits for their organization. By handing off control of certain functions to a third-party, you’re also restricting your company to whatever packages that PEO has to offer.

How To Overcome These Challenges:

A satisfied, efficient staff is the biggest competitive advantage a business has, and you can help create a company culture that values and understand employees and their contributions by making sure their voices are listened to. As you can see from the list above, one of the biggest challenges of outsourced manpower is not having someone who can troubleshoot the day to day problems, frustrations and miscommunications that are inevitable in any work environment.

Luckily, for companies considering outsourcing, they can pick and select which functions they wish to hand over to someone else, keeping personnel on hand to handle those important interpersonal relationships and to act as a liaison between employees and your manpower vendors.

While some vendors have an everything-or-nothing policy regarding your manpower functions (they either want to handle all of them or you can’t use them), many offer an ala carte option, allowing you to decide which things you’d like to keep in the building and which can be performed elsewhere.

The common services offered by manpower companies include:

  • Payroll services (paying employees, handling taxes and keeping track of sick time and vacation)
  • Benefits (health insurance, life insurance, accident insurance, etc.)
  • Manpower management (recruiting, hiring, sacking, exit interviews, annual reviews)
  • Risk management (employee compensation, safety, conflict resolution, company policies, etc.)

While outsourcing any one of these would save your business time and money, remember that it might be wise to keep people-centric jobs (thinking hiring, sacking and reviews) on the premises. Additionally, allowing your employees to express their frustrations and concerns about the outsourced services will help you better analyze what’s working and what isn’t to find the best remedies for your business.

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