When talking about outsourcing, several ideas and concepts come to mind, some true and grounded, others not so much.
It is a trend that is difficult to escape in some sectors and for several companies, especially in certain economic scenarios.
If you and your company are considering outsourcing some area, but still have doubts, the time has come to clarify them once and for all.
What is outsourcing?
Although most people know what it is, outsourcing is handing over to a third party – another company – a certain task and/or responsibility that at first it would be yours.
It is a relationship between two companies and, therefore, B2B or Business-to-Business, in which the contracted or outsourced company provides a service and/or performs a kind of activity or end of the contracting company, through payments and a contract with legal value and established between them.
Although it is not mandatory that it happens in this way, it is already common for for some time, outsource some department or area of the company, such as concierge and security, cleaning, maintenance, or other area of activity outside the one considered to be the main one of the contracting party.
It comes from the belief that everything that I am not an expert or that does not add value to my main activity, I can – in some cases, I must – hand over to a third party to do for me
Not at all right or It is wrong to think like this, but soon we will see that it is not enough to determine when and what I should outsource.
When is it time and what to outsource?
It is common to find the type of approach that establishes advantages and disadvantages of outsourcing, as a way of defining when it is advantageous and which – or which – areas to outsource in a company.
However, it is not it is correct to have an absolute view on the matter, that is, in which what are defended as advantages, always will be, as well as possible disadvantages, are also in any er moment and situation.
Therefore, the same company in two different moments of its trajectory, can be seen in scenarios in which at first it is appropriate to outsource and in a second, it is not . Or vice versa.
Let’s assume the legal area, a common example of outsourcing. At a time when the company has few contracts to be drafted and analyzed, few and eventual actions brought by it or against it and other legal issues are infrequent, having a lawyer or even a formally constituted legal area is not justifiable and here an outsourced fully meets your needs.
But if in the future this scenario undergoes a radical change, having one or more professionals on a full-time basis may be the best solution.
Seen this way, advantage or disadvantage is something that changes with time and condition. It’s not a matter of absolute position.
More than that, it means evaluating a series of variables to then make a decision and that’s what we’ll see next.
1. Costs / investment
It is quite common to decide to outsource services / activities, based on costs, or whether it is cheaper or more expensive. However, relying solely on this criterion or giving it a lot of weight only makes sense when the difference between one and the other is extremely significant – which it is not always – or the necessary investment pushes it in the opposite direction.
Want an example?
Let’s say your company started selling to a retail chain that has stores in states where you don’t have a branch and as part of the agreement with the new customer, you need to have sales promoters in their stores. Hiring, training and having a physical infrastructure and other costs to maintain a team in these conditions can be even more expensive than the profit obtained with the new client and in a case like this, only outsourcing can make the business viable.
It is important to note that it is a decision that does not reside only in gathering numbers and from them, making the decision.
In addition, there are costs / investments that change over time and this also needs to be considered.
2. Know-how / experience
Having the know-how or knowledge necessary to know how to do it in the best or most efficient way, as well as experience, should be another factor to be considered .
When the time and amounts invested – in training, for example – to obtain the results required by the human material available, or even the hiring of professionals with the necessary hard skills implies a large difference in remuneration, it is considered to deliver to a third party that already has both.
It is noteworthy that despite the factor having a relationship with the first (cost / investment), the point of differentiation here is time. In other words, how much time is needed to build this knowledge and acquire the necessary experience, remembering that during this learning process there are mistakes.
If you cannot wait and cannot make mistakes, give it to those who have the expertise for that, it is more suitable.
But that’s not all.
Let’s think about small companies, in which normally there is no Human Resources department, but that from time to time there are routines that are typically your responsibility and that require specific knowledge and experience, such as to hire the right people and lessen the problems arising from not doing it well, such as absenteeism, low performance, high turnover, to name just a few. some.
Many managers insist on trying the wrong way, despite the consequences, instead of handing it over to a specialized company. They think they are saving.
3. Focus on your talent
It may seem that we are dealing with a previous aspect, but the important difference lies in focusing on what are the competitive differentials, the greatest qualities and the talents of the company.
It is more common the smaller the company and when the partners and managers have to be involved and responsible for many or all areas, when the ideal would be for them to focus on what brings results and growth for the company.
How much is their time worth?
It is often said that their time is very expensive to occupy and worry about certain activities.
Everything done under these conditions is a waste of time and talent and still does not produce the best result.
4. Results
None of what we have seen so far makes sense in isolation. It is always necessary to observe the results obtained.
It is the typical situation in which a third party is able to deliver a result in such a better way, that it is enough to justify a cost that is eventually higher.
It also ends up being a consequence of having the know-how and expertise and because it is the talent of the third party and not yours. A classic example is Advertising and Marketing agencies, an area that is often outsourced.
In fact, the results presented, since they turn out to be a combination of the factors that we have seen here, is one of the best factors to be considered.
5. Dependency
The level of dependence of the activity that is outsourced, particularly related to strategic and structural issues, such as sales, for example, must also be considered.
In other words, how much the company depends on this activity for its results, as is the case of a service provision that is decisive in the quality of its final product / service, or in meeting deadlines, or even in determining the price .
Think that if there is a strong dependence and for some reason it is necessary to change the service provider, something quite possible, the results will be impacted by the high level of dependence. Or even if the results presented are bad, yours will be too.
6. Partnership
And speaking of results, the better the outsourcing will be, the better the results and that ends up passing through the term that has been used in a banal way – partnership.
More than simply hiring a third party to provide services, if the business relationship develops as a legitimate partnership, in its broadest sense, the results will be amplified for both parties.
Cautions to be observed in relation to the outsourced
Once you have decided to outsource any area of your company, it is not enough to search the Internet, hold some meetings and decide on the one who gives you what appears to be the best commercial proposal.
It is necessary to keep in mind some points and be careful about yourself.
1. Confidentiality
In some cases and depending on which area is outsourced, the company’s strategic information will be known to the partner’s employees, either because they are physically on the company’s premises or because they have contact with company’s employees.
This is especially sensitive when the outsourced provides services to other companies in the same segment.
There should be no conflicts of interest and on the company’s own initiative contracted, it must restrict when this may eventually occur, even for ethical reasons.
2. Subsidiary liability
For those who believe in the false paradigm that outsourcing is a means of not being responsible for the workers who provide services to the third party, there are certain legal issues that put this myth to the ground.
Employees of the contracted company must be registered in the work card, legal working hours, vacations, 13th salary, FGTS and social security issues, aspects of work safety and everything else that is determined by collective agreements and conventions of the professional category to which they belong.
In other words, they have all the rights guaranteed by the legislation, just like their own employees.
This same legislation guarantees them that if for any eventuality the contracted or outsourced company cannot afford or comply with these legal guarantees, the contracting party must do so. This is what is known as subsidiary liability.
3. Formally constituted
The Outsourcing Law – Law 13,429/17 – which was approved on March 31, 2017, establishes several parameters against which outsourcing must take place.
Among the many points that even contribute to a safer relationship for both parties in legal terms, it is established that companies must be formalized with the National Registry of Legal Entities (CPNJ) and registered with the Commercial Registry.
In addition, there are other requirements that must be observed, such as, for example, the share capital must be in accordance with the number of employees of the service provider, with values and numbers for that.
It is highly recommended to consult the law whose link we have provided above, so as not to miss any important points.
4. Working conditions
It is the responsibility of the contracting company to guarantee the safety, hygiene and health conditions of outsourced employees, when the work is carried out on its premises or in a place designated by it.
More than a legal requirement, it should be borne in mind that the quality of life at work is an issue closely related to the results that these employees can provide.
Even when this is not the case, the concern with the outsourced employee must exist. Remember that, especially in the various service situations, the outsourced employee is a representative of the company in the eyes of the consumer. For the latter, there is no distinction between one and the other, after all when he calls a 0800 number and is answered by the outsourced person, he thinks he is talking to his company.
5. References
Search for all kinds of references about the candidate company. From other clients for which she has already provided services, as well as contact them to find out more.
Good companies – from any area – in addition to not opposing, they anticipate and present commercial references.
Internet searches can also be very useful. Evaluate your digital reputation, ratings when they exist, comments and interactions on social networks, responses to comments on blogs and other types of information. and websites and everything that is possible to gather about them.
Conclusion
Outsourcing services / activities can be a great alternative for certain areas and moments of a business, as long as some care is taken.
