Staff Outsourcing is outsourcing operations that provide a critical administrative role such as Human Resources, handling documents, and bookkeeping.

1. AfriBusiness LLP
Supporting Businesses
HR OUTSOURCING
1February 2017
Current Affairs By

2. Staff Outsourcing
…To Outsource or Not
to Outsource, that is
the Question?

3. What is staff outsourcing?
3

4. 4
o Outsourcing is the contracting out of any task,
operation, job or process that was originally
performed by employees within the company
to a third party for a significant period of time.
o Staff Outsourcing is outsourcing operations
that provide a critical administrative role such

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7. What to outsource
7
Grey
Area
Not
Outsourced
In House
if Possible
Outsource
Competitive
Strategic Non-Strategic
Non-Competitive
PricewaterhouseCoopers Model

8. Outsourcing as a business concept
8
The types of activities
that are outsourced have
evolved over time.
Starting out with
activities, more and more
entire business functions
are being outsourced.
Transportation 5%
Real estate 10%
ICT 20%
Manufacturing 7%
Marketing and Sales 6%
HRM 9%
Distribution & Logistics 10%
Finance 7%
Management 4%
Customer services 17%
Administration 15%
Source: The Outsourcing Institute, Dun & Bradstreet, 2010

9. Advantages and Disadvantages of
Outsourcing
9
Advantages Disadvantages
Freeing up of cash: investments can be concentated on
core activities
Increased dependence on suppliers
Optimal usage of knowledge, equipment and
experience of third party
Continuous follow-up and monitoring of the supplier
relationship necessary
Increased flexibility: fluctuations in the workload can
more easily be absorbed
Risks of communication and organizational problems
during the transfer of activities to a third party
Outsourcing leads to easier and more focussed primary
processes in the organization
Risks of leakage of confidential information
Input through an independent party’s point of view
which reduces the risks of introvert short-sightedness in
the organization
Performance incentives and penalties
Risk of losing essential strategic knowledge

10. The outsourcing process
10
Competence
analysis
Assessment
& approval
Contract
negotiation
Project execution
& transfer
Managing
relationship
Contract
termination
Strategic phase Transition phase Operational phase

11. Outsourcing- Pitfalls & Preventive
Measures
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Absence of a Partnership Approach
Lack of Commitment and Consensus in the Client Organization
Lack of Effective Change Management in the Client Organization
Ineffective Governance Structure
Client’s Lack of Knowledge of its Processes
Measuring the Wrong Performance Aspects
Rigid, Inflexible Contract
Inadequate Security, Disaster-Recovery, and Business-Continuity
Plans
Communication Clarity with a partnership approach
Board-level champion and sponsorship for the outsourcing initiative
Change Management to be undertaken when outsourcing
Create mechanisms and forums that facilitate an open exchange of
information and objective feedback
Developing a contractual obligation for both parties to commit
appropriate executive involvement
Create a summary process flow map and prevent micro-management
Regular review of SLAs as to their appropriateness
Contract must include provision for a fair exit process
Thorough testing of the disaster-recovery and business-continuity
processes
Lack of Effective Communication
PITFALLS PREVENTIVE MEASURES
Source: Outsourcing Partners International

12. Finally…
12
Love it or loathe it,
outsourcing is now a
permanent feature of
business life.
©AfriBusiness LLP 2017

13. www.afribusiness.co.ke
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