Outsourcing is a familiar concept to many organisations.
Large and small companies have adopted outsourcing as a strategic imperative to achieve business success. Businesses outsource non-core functions such as payroll processing, accounting, customer service and other essential functions in a bid to save cost, decrease time to market or access technical expertise.
While outsourcing holds excellent benefits for businesses, it also has the potential for high risks. Unless handled with care, there is a likelihood that engaging the services of an outsourcing partner can over time lead to unhealthy dependency and erode competitive advantage.
Thus, companies need to have a clear vision of what they want to achieve by outsourcing before hiring a service provider. Knowing this will serve as a guide for organisations who are considering outsourcing specific business functions to an outsourcing service provider.
This guide highlights the twenty-one factors that businesses should consider when selecting an outsourcing partner.
Mind the gap: 21 Things to Look Out For When Hiring Your Outsourcing Partner
When choosing an outsourcing partner, one of the most important things to look out for is a strategic perspective.
An outsourcing service provider with a strategic outlook will first seek to understand your business objectives and carry out proper diagnostics by asking the right questions to get a clear line of sight between where you are and where you want to be.
The more connected your outsourcing provider is to your overarching objective, the higher the probability of success. A strategic outsourcing partner will first gain an understanding of current business conditions and build on that to provide creative and innovative outsourcing solutions that tie together with your business objectives.
Project Management Capabilities
The choice of whom you outsource to is crucial to your business success. Hence, you want an outsourcing partner who has project management capabilities; otherwise, there will be a misuse of resources, and quality will be affected.
An outsourcing brief should be treated as a project and executed efficiently. A service provider with project management capabilities will have a clear, organised plan and checklist that will help them meet all the key objectives of the brief and save time and resources.
It is imperative that your outsourcing partner not only understands project management but also has tools, processes, and procedures that will make execution efficient. Download our project management template.
Quality of the Vendor’s Internal Staff
The quality of an employee is critical to the overall success of an organisation. While considering enlisting the services of an outsourcing partner, you should check for how well their internal employees perform.
When an outsourcing services provider has high performing employees, there is an excellent chance that it will reflect in the quality of outsourcing service delivered to you.
Before you sign any agreement, carry out your research to find out how qualified and experienced the internal staff of the outsourcing company are. This is an excellent way of assessing the reliability of the outsourcing service provider.
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Quality of Outsourced /Associate Staff
One way that you can judge the quality of service that an outsourcing vendor will provide is by assessing the quality of their associate staff.
Research, the team that will be assigned to your business to evaluate technical expertise and experience. Having quality outsourced staff is a powerful indicator of the level of performance that can be expected from the outsourced business function.
A good quality recruitment process offers many benefits to an organisation such as high-quality talent, reduced cost, and reduced employee turnover rate.
When considering a service provider, it is crucial to assess how rigorous their hiring process is because it ensures that they are adopting the right hiring methodologies to find, identify and select top talent. Click here to download our Hiring Brief Questionnaire.
Level of Technological Advancement
Technology is a major consideration when choosing a service provider for your outsourcing needs. The business world is rapidly changing in the face of new advancements in technology.
As such, any business that wants to retain a competitive advantage must invest in relevant technology to improve business processes. This is a good way of assessing the extent of their capabilities. Ask the service provider about the tools and technologies that they will utilise to execute your project.
Your vendor must have up-to-date systems and technologies that can handle rigorous outsourcing functions. Workforce Outsourcing leverages several technologies such as Outwork – a field team management solution, AllDayHr – an HR solution for hiring and managing existing teams and Learnry – a learning management system to deliver sustainable outsourcing solutions to businesses.
Standard of Operational Efficiency
Operational efficiency is the practice of improving all your business processes. Having a standard of operational efficiency takes the guesswork out of daily operations and ensures that every employee understands the policies and procedures associated with their roles.
This is another consideration when choosing an outsourcing service provider. The ideal vendor should have standardised processes that ensure that the quality of business results is not compromised and there is consistency across the board.
As a business, this assures you that your outsourced business processes or functions will maintain consistent quality while also being improved to enhance business performance.
To ensure that clients are consistently provided with services that meet regulatory requirements, Workforce Outsourcing ensures standardised operational processes that are in line with ISO 9001:2015.
A client-centric outsourcing provider is focused on creating a positive business experience for its customers by maximising resources and improving business performance.
When choosing an outsourcing service provider, you need to assess how customer-focused they are in their business. The benefit of having a client-centric outsourcing provider is that they are committed to improving their operational efficiency to help you achieve your business goals.
A customer-centric service provider will assign you a dedicated account manager who will ensure that all your business needs for the outsourced functions are met.
When considering an outsourcing vendor, one of the most important questions is “What is your success rate in providing this service?” You need to be confident that you can trust the service provider to deliver the best results for your outsourced business function.
Check their website for their portfolio and client testimonials. Some key questions to ask here are:
- What types of clients have they worked with?
- What are the kind of results they have delivered to those clients?
- Do they have hard figures to prove the results?
- Do they still have ongoing working relationships with these clients?
Partnering with a service provider that has a presence in other countries will offer significant benefits to your organisation.
They have close communication with local customers and can provide you with insights and information into various local markets. They are also able to serve the needs of diverse local markets better and tailor their approach to the local market.
Your ideal outsourcing should also have a presence in other regions within the country. That way, you can access outsourced staff across various states and cities in the country.
Workforce Outsourcing has over 8,000 outsourced employees scattered across major cities in Nigeria. This ensures that there is uninterrupted service delivery for clients who have various branches across the country.
Size of Staff
If your service provider’s team size is too small, you may run the risk of delays, lack of available expertise, or even terrible service delivery.
An outsourcing service provider with a large team will have access to a broad range of expertise and be able to handle your business processes efficiently.
Having a large number of employees also implies that the outsourcing vendor will be able to deliver great business results on projects that require a lot of human resources without compromising on the quality and consistency of service.
A great office environment has a positive impact on the health and well-being of the employees. In your choice of an outsourcing partner, look out for the size and conduciveness of their office environment.
This suggests that the employees will feel comfortable enough to produce their best work. Large office spaces also suggest that a vendor has adequate space to accommodate and conduct a hitch-free hiring process when recruiting associate staff.
Your service provider should have adequate space to accommodate meeting rooms, training halls and assessment centres. This demonstrates that the outsourcing company can hold management meetings and training for outsourced staff easily.
Happier and healthier employees are shown to regularly outperform those in organisations that do not promote health and well-being. Your outsourcing partner must show that they provide basic care for their outsourced staff
You should ask questions like: What employee benefits do they offer the outsourced employees? How quickly are their complaints and enquiries resolved? How engaged are the outsourced staff? Knowing the answers to these questions will help you gauge just how well the outsourcing service provider cares for their outsourced employees.
The employee care unit at Workforce Outsourcing ensures that the outsourced employees are well taken care of. The team makes scheduled calls and visits to staff, organises on-site and virtual training and schedules meetings with them.
Performance Management Capabilities
When it comes to performance management, there are three things that your organisation should ultimately be interested in – performance, productivity & profitability. The most important being profitability.
A business can only be profitable if its employees are efficient and highly productive. Performance management is essential because it helps to increase employee engagement and productivity. Improving levels of employee engagement is the key to boosting productivity and maximising ROI.
When considering an outsourcing service provider, look out for one who has invested significantly in performance management because this ensures that both its outsourced and internal staff have an increased focus on driving business results.
You are also assured that the performance of the employees is being tracked and evaluated, which helps to identify high performing employees who can actively drive your business goals.
Outsourcing comes with several risks. A structured risk management approach will help to identify, assess, mitigate, and produce response plans for the business risks involved if any changes occur in the business operation, systems and processes.
From budgetary, scheduling, relational, technological, performance, personnel, to dependency risks, outsourcing to the wrong vendor can expose your business to these risks and more.
When considering an outsourcing service provider, go for the one that has a structured risk management approach. You want an outsourcing vendor who can take these risks off your organisation and shoulder them in a way that doesn’t affect the required business results.
A reliable service provider should be able to identify possible sources of catastrophic risk, measure potential effects on the business and then select appropriate countermeasures that may prevent or mitigate the effects.
In considering a service provider, you must take into account its HR Competencies. Review the hiring policies and processes of your outsourcing partner.
It will help you highlight the knowledge, discipline, and skills that would be provided during the engagement process for your business in terms of value.
Your ideal outsourcing vendor should have a corporate culture that encourages learning, growth and rewards performance. It should be able to communicate efficiently and effectively, your business goals and objectives to associate and internal staff.
The ability of an outsourcing provider to effectively manage its employees will have a ripple effect on the quality of service provided by the associate staff.
Your ideal outsourcing partner should also demonstrate critical evaluation skills, business acumen, conduct research, collect and analyse data, and use the results to support the outsourced business functions.
Reporting and analytics have become critical for every organisation. It helps to show trends and performance that will guide business decisions.
Your potential service provider must have an effective reporting and analytics template that will enable you to measure performance and ROI on the outsourced functions effectively.
Find out the frequency of the report. Will it be monthly, quarterly or annually? Also, enquire about the various metrics that will be used in the report.
What will they be measuring? How extensive will the report be? The results from the report will help you make informed and evidence-based decisions to grow your business.
As a business, understanding the reasons behind the various rules, laws and regulations that govern your industry will help you take advantage of any of the benefits they offer while you remain compliant. This should be the case for any service provider you are considering.
A compliant outsourcing partner will help you avoid the risk of fines, penalties, or lawsuits that can impede work, affect productivity and invariably lead to poor business performance. Research on the internet to find out more about your outsourcing service provider.
Find out how compliant they are with health and safety practices, regulations in your industry, regulations in the vendor’s industry, infrastructure, legal obligations and employee benefits.
Learning and Development Opportunities
An organisation that invests in the development of its employees will experience improved productivity and employee performance. This is why one of the factors you should consider when choosing an outsourcing provider is how much they invest in developing their associate staff.
The associate staff will be directly responsible for handling your outsourced business functions. It is, therefore, essential that they are equipped with the right skills necessary to perform optimally at their jobs and produce significant business results.
Your outsourcing provider should demonstrate that they can provide consistent training and development for the outsourced staff to keep them updated with trends in the industry.
One of the factors to consider in the choice of an outsourcing service provider is strategic partnerships. A service provider that has secured partnerships with reputable bodies and organisations will benefit your business greatly because they will be able to leverage those partnerships to access a broader range of expertise and resources to provide you with the best services.
For example, Workforce Outsourcing is a member of various bodies such as the Association of Outsourcing Professionals Nigeria (AOPN) and Human Capital Providers Association of Nigeria. We also have a number of partnerships with HMOs, insurance service providers, among others.
Our Global partnerships also ensure we stay current with HR best practices and can manage multi-cultural teams effectively. Access to strategic alliances will also give your business a competitive edge and increase your market share.
An outsourcing partner that can demonstrate in-depth knowledge of various industries and market trends is one that is valuable to your business.
A service provider with experience and industry knowledge can forecast issues, provide solutions and manage accompanying risks. To gauge how much experience and industry knowledge an outsourcing partner has, ask about past clients, projects completed, and how intensive those projects were.
The management team of the outsourcing company who will be working with you should also demonstrate extensive experience in implementing your business projects.
Outsourcing can be highly beneficial. As the business landscape continues to evolve at a rapid scale, it has become even more crucial for companies to leverage outsourcing as a tool to help them remain competitive.
Nevertheless, like any other valuable business concept, it needs to have the right factors in place to produce the desired business results. One of these factors is the right outsourcing partner.
The choice of an outsourcing service provider can either drive business growth or erode competitive advantage. There is a great need for businesses to become strategic about their choice of outsourcing service partners.
Workforce Outsourcing has over the last 17+ years worked with various organisations across diverse industries as a strategic outsourcing partner.
Our outsourcing service leverages the latest technology and world-class processes; our extensive experience cuts across various industries and global strategic partnerships to deliver successful outsourcing solutions to you. Contact us to get started.