Definition, Significance and Effectiveness of Outsourcing

Definition, Significance and Effectiveness of Outsourcing

Definition

Competition strict business world today, a company is required to improve its business performance through effective management and efficient organization. One of the efforts is to hire labor to a minimum to be able to contribute the maximum extent that the company’s goals. The company attempts to focus on handling the job that became the core business alone, while supporting the work outsourced. The process of this activity is known as “outsourcing”.

By outsourcing, business owners can focus on core business, Cost reduction, investment costs turn into expenditures, no longer think about and take care of labor turnover, part of the modernization business. So the company can make a forecast cost more valid and easier, as some variable cost that can not be predicted to be issued.

Outsourcing Implementation In Company

Most of the companies use outsourcing labor is in the parts that have nothing to do with production but its role is required. Security services, for example, labor is very far from the areas of a company engaged in the production or factory. But the sense of security of riots, fights and theft in the plant is necessary. Therefore we need a workforce that is just taking care of the safety of the plant.

A common problem that occurs in the use of outsourcing, among others:

  • Determination of the outsourcing partner. This is crucial because the outsourcing partner should know what the needs of the company and maintain good relationships with outsourcing partners.
  • The outsourcing company should be incorporated. It aims to protect the rights of outsourced workers, so that they have legal certainty.
  • Violation of the provisions of outsourcing. In order to reduce production costs, companies sometimes violate the provisions in force. As a result of that happening are outsourcing labor demonstrations demanding their rights.
  • Company outsourcing labor to cut salaries without any restrictions so that they receive, reduced more.

It is one of concern for the company to get more information in determining the choice in the selection of outsourcing provider company that will not be problems in the future.

Outsourcing effectiveness

Some things that make outsourcing to be effective is to look very deep to be the reason for using outsourcing, factors of selection of the company outsourcing service providers, as well as the satisfaction of the company to outsource labor. To be more effective, suggested the existence of: Two-way communication between the company and outsource service provider (Service Level Agreement) will be co-operation, changes or problems that occur. Outsourced personnel have training in first in order to have the ability / skill. Noting the rights and obligations of both the outsourcing and labor are written in detail and tell what becomes of their rights. While that led to outsourcing becomes ineffective due to lack of knowledge, skill and attitude of outsourced personnel.

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