What is outsourcing in simple words and for whom is outsourcing work suitable?

Content

Outsourcing - what is it in simple words, its main essence The main differences between outsourcing and other forms of cooperation TOP 6 main types of outsourcing Type 1. IT outsourcing Type 2. Accounting outsourcing Type 3. Occupational safety outsourcing Type 4. Legal outsourcing Type 5. HR outsourcing Type 6. Sales outsourcing Type 7. Outsourcing of business processes Type 8. Production outsourcing Payment for outsourcing Advantages and disadvantages of outsourcing How to outsource - step-by-step instructions for beginners Step 1. Analyze the company's activities Step 2. Select an outsourcing company Step 3. Study the terms of the contract Step 4. Sign a cooperation agreement Step 5. Switch to a new format of work Step 6. Organize a control system for the contractor

Types of outsourcing services

As a general rule, outsourcing services are divided according to the area of ​​work. Most often, they are usually used according to the following main categories of activity, according to which it is divided into several thematic subtypes:

• Accounting. This type of service is used not only by small businesses, but also by fairly large corporations. Even if the company has a full-time accountant, the manager may want to check the work and get an objective assessment of how things are being done.
• Audit. A slightly modified manifestation of the previous form. An audit often carries out a check before the control of the Tax Inspectorate. The auditor issues an independent opinion, points out errors and helps eliminate them.
• Maintaining databases, creating websites. Often these tasks are entrusted to invited specialists by small companies that simply do not need a full-time programmer.
• Marketing. Even large holdings that have a staff of marketers often decide to entrust the writing of an advertising campaign to marketing corporations. The reason is the need for fresh ideas.
• Jurisprudence. Paying for a first-class lawyer on a regular basis will be much more expensive than hiring only at the right moments by concluding an agreement with a law firm.
• Security. To ensure plant protection, you need to have the right equipment and the right skills. It is not always possible (and it makes sense) to create a security department within an enterprise - simply enter into an agreement with a security agency.
• Service. Cleaners, janitors, repair specialists - these specialists are most often invited to the organization from outside to perform any specific work. They can come on an ongoing basis, but are not specifically employees of the company.
• HR. Increasingly, the recruiter is also not an employee of the company. There may be several reasons for this at the same time. First of all, this is an objective assessment. Simply put, there is a guarantee that the decision regarding any employee will not be influenced by the personal attitude of the HR specialist towards him. Also, such specialists usually follow new trends and trends in the business world, which allows them to select personnel taking into account all the requirements and techniques that are currently being practiced.

Outsourcing – what is it in simple words, its main essence

Before we begin to understand the very essence of outsourcing, let's try to define it in as simple terms as possible.

Outsourcing translated from English means “the use of external resources.”

Outsourcing is the transfer of some functions of an organization to another company that specializes in this area.

In even simpler terms, outsourcing is when some functions in a company’s work are performed by specialists from another company with specialized specialization.

The main essence of outsourcing can be explained as follows:

Not all legal entities, especially beginning businessmen, can afford to have the necessary personnel to carry out all the necessary functions of the enterprise. In addition, in order for all areas of the enterprise to be at a high level, specialized specialists with a high level of qualifications are needed.

Each organization has its own reasons why it starts using outsourcing. The most basic ones include:

• the enterprise does not have the opportunity to employ additional services, for example, a personnel department;
• the cost of maintaining full-time employees is higher than paying for outsourcing;
• There are not so many internal resources to spend on finding and maintaining personnel to perform secondary functions.

A firm or company that undertakes to perform certain functions at a businessman’s enterprise is called an outsourcing company .

Outsourcing can be:

• partial – this is when functions are transferred partially;
• and complete - if all functions are transferred by business processes in one area of ​​activity.

An example of partial outsourcing is providing enterprise computers with only the necessary programs.

And, if an outsourcing company completely takes over all maintenance of the enterprise’s computers (repairs, software support, etc.), this will already be complete outsourcing.

Here you can read about what consulting is, and here about a consulting company.

Outsourcing examples

In practice, outsourcing relationships can often be found. For example, many manufacturers and retailers cooperate with call centers so as not to organize them on their territory. Recruitment agencies are also in great demand, especially in large cities. Specific examples of using the service are presented below:

1. Ford produces only 1/3 of its products independently, the rest is outsourced to subcontractors.
2. Another giant that has managed to evaluate all the advantages and disadvantages of outsourcing and actively uses this work scheme is the IKEA company. It has virtually no production of its own, collaborating with thousands of suppliers. Transport functions at IKEA are delegated to a third party, so the company directs all its resources to retail sales of products.
3. Back in the 90s, Kodak transferred all IT areas to IBM, which aimed at leadership in this segment and received this opportunity.

Find out about the online service for calculating taxes and generating reports for employees.

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The main differences between outsourcing and other forms of cooperation

The main distinctive features of outsourcing are:

• the mandatory existence of an agreement on the transfer to another company of part of its processes and functions;
• transfer of only non-core cases;
• long term of the contract - no less than one year;
• possibility of transferring business processes (accounting, personnel selection, technical maintenance).

Outsourcing functions

Typically, businesses turn to outsourcing companies to transfer the following responsibilities

• accounting;
• conducting personnel records;
• employee payroll calculations;
• carrying out tax transactions;
• equipment service;
• ensuring the functioning of the office;
• software; Maintenance;
• performing written, oral and simultaneous translations;
• Information Support;
• creation and control of advertising companies;
• security;
• regulation of legal issues of the enterprise;
• development and implementation of projects;
• logistics and delivery management;
• cleaning the premises;
• performance of production functions.

Benefits of outsourcing

In general, outsourcing has a number of advantages compared to traditional employment. In most cases, the correct use of such personnel policies will maximize profits and minimize fixed costs of the enterprise, as well as resolve a number of important personnel issues. The main advantages of outsourcing were discussed earlier. In general, it allows you to:

• Reduce the tax burden.
• Receive effective services from professionals in areas where hiring an employee is impractical.
• Effectively define the scope of responsibility with additional guarantees.
• Optimize working time costs.
• To a certain extent, improve the resolution of organizational issues.

According to statistics, the degree of motivation of an outsourcing specialist, as well as his professional skills and abilities, are higher than those of most full-time employees.

TOP 6 main types of outsourcing

Here we will look at the main types of outsourcing services that are the most popular and in great demand.

Type 1. IT outsourcing

IT outsourcing is the most popular type of outsourcing, including the maintenance of computers, equipment and software. IT outsourcing services also include equipment maintenance and software development.

Type 2. Accounting outsourcing

Maintaining an accounting department is quite expensive for an enterprise - special programs, premises, advanced training for accountants, etc. And in specialized organizations the level of specialists is always higher, since it is profitable for an outsourcing company to maintain valuable personnel.

There are several options for cooperation:

• Accounting;
• making report;
• tax accounting;
• full service (daily accounting, reporting for time periods, creation and maintenance of primary documentation).

Type 3. Outsourcing of labor protection

As a rule, large enterprises have an entire labor protection service, but small ones don’t even think about it. And according to the law, such a rule must be observed. Therefore, it becomes very profitable for many enterprises to place labor protection in the hands of specialists. You don’t have to delve into the intricacies of the work of an incomprehensible department.

Type 4. Legal outsourcing

Almost all organizations have problems with the legal department. Few people can afford such “happiness”, and in most cases it is unprofitable to hire highly qualified workers.

Therefore, in cases of urgent need for legal assistance, turning to an outsourcing company is an excellent alternative to maintaining a staff of lawyers.

Type 5. HR outsourcing

This type of outsourcing can be beneficial for large companies that have high staff turnover and an expansion of staff.

Highly qualified specialists of a special outsourcing company will take on all the work of recruiting personnel, calculating wages, etc.

Type 6. Sales outsourcing

Good sales managers can be very difficult to find. But it is possible to find such companies on the market of outsourcing companies. In addition, you can enter into an agreement with a specialized company for the outsourcing of online stores.

Type 7. Outsourcing of business processes

This type of outsourcing involves transferring tasks for one or more business processes (marketing, logistics, etc.) to a third party.

Type 8. Production outsourcing

This type involves the transfer of the functional part of the production process. For example, one organization entrusts another with the manufacture of parts necessary for the production of the final product.

In fact, there are many more types of outsourcing. Today, any non-core task can be assigned to another organization specialized in the required area. Such delegation of the necessary work helps reduce the financial burden and significantly save time, which allows you to focus on promoting and developing the business itself.

Who can outsource

From the above it follows that outsourcing often means remote work. Exactly what we do. And freelancers can get a great job in an outsourcing company, work on projects and earn a good income. What activities are in demand:

• IT developers;
• Programmers (website creation and configuration);
• SMM-shchiki;
• Copywriters;
• Photographers, video operators, directors, screenwriters;
• Bloggers (advertising goods and services);
• Accountants;
• Security;
• Cleaning;
• Personnel selection.

What you should pay attention to is that the outsourcing company will pay the wages. This means that not all of the money for the project will be yours. This can be looked at as a disadvantage. But! Outsourcing companies have a name and attract large customers.

We said above that the largest production agencies cooperate with world-famous brands. The projects they deal with require the participation of a huge team of professionals. It is technically impossible to complete such a project alone, no matter how outstanding we are. Agencies hire freelancers to work on projects.

Is it possible that Google or Mercedes, for example, will contact us directly? Hardly. By collaborating with an outsourcing company, there is a real opportunity to work on a large-scale project and add it to your portfolio. This will significantly raise your level in the eyes of customers.

Payment for outsourcing

In fact, outsourced services cost employers more than hiring full-time employees. Only from such delegation of the necessary tasks does the employer enterprise receive a guarantee that the work will be performed at the highest level.

There are three types of payment for the services of an outsourcing company:

• for the result;
• hourly;
• for the time worked.

The most common payment method is payment for results . That is, after the work is done.

Hourly payment is used only for solving non-standard tasks, the cost of which is determined by the outsourcing company itself.

Payment for time worked is usually used when ordering HR outsourcing.

In any case, payment for outsourcing depends and is determined by the outsourcing company itself, which must be reflected in the contract.

What types of external cooperation are not outsourcing?

Quite often, outsourcing is confused with freelancing services, but there is a significant difference. A freelancer is simply a free specialist who, theoretically, can work under an outsourcing agreement, but only if there is one he will be considered an outsourcer. On the other hand, an outsourcer can also be a large company that does not fall under the category of freelancing. Thus, freelancing is a format for finding a job for a specialist, and outsourcing is a type of labor relationship between a customer and a service provider.

Dropshipping is not outsourcing either, since in this case there are no such parameters as: volume of work, deadlines, level of payment and a fixed term of the contract. Theoretically, in such a relationship, the supplier simply nominally sells the product to the dropshipper, who resells it to the end consumer.

Advantages and disadvantages of outsourcing

Understanding what outsourcing is, one cannot help but consider what advantages it provides and what disadvantages it has.

The benefits of outsourcing include:

• more time for core activities that bring the main profit;
• there is no need to train specialists, and the outsourcer company provides high-level specialists;
• production becomes more flexible and can quickly respond to market demands;
• the entrepreneur will know that the services or equipment provided to him will be of the best quality;
• Using equipment outsourced to a third-party company, there is no need to worry about timely service and finding components for repairs; these functions are on the outsourcer’s side.

The main disadvantages of this service include:

• if you get too carried away with outsourcing, you can quietly give it away if by chance the contract reflects the main management functions;
• there is a possibility of losing the ability to effectively manage the company;
• there are variations with the risks of tax deductions;
• risks of loss of the company’s corporate information;
• the existence of disputes that can only be resolved in court.

Pros and cons of providing temporary staff

Each party to such a contractual relationship has its own positive and negative sides. Let's take a closer look at the advantages of staff outstaffing, staff outsourcing, as well as the pros and cons of temporary workers.

Advantages of leasing temporary staff for an employer

• Quickly attracting the required number of employees for a certain period of time;
• Reducing enterprise costs. The entrepreneur does not pay tax deductions for these employees. Thus, it can maintain the status of a small business, and this entails additional government subsidies and simplified taxation. There is also no need to waste time and money searching for personnel and specialists. Often, an independent search for personnel is more expensive than recruiting personnel through a recruitment agency;
• No downtime. Recruiting firms, thanks to their extensive database of employees, can select an employee with the required qualifications in a matter of hours. This saves a lot of time for the client company, for which it is important that the work is completed on time;
• A hired employee can become a permanent employee. If you like how the hired employee performs his duties, then you can offer him a place on a permanent staff. Thanks to outstaffing and leasing, you can create a team of professionals and trusted people;
• Increased internship time. Many entrepreneurs perceive temporary hiring as an internship for individual employees. Legally, any employee must train for no more than 2 weeks. But often this time is not enough to understand a person and adequately assess his abilities. An employee will work at a certain enterprise for no more than 9 months, and this time is enough for him to prove himself;
• The advantage of personnel outsourcing, outstaffing and leasing is to reduce the load on the accounting and HR departments. Due to the fact that all personal documentation and deductions for the employee are maintained by the recruitment agency, the accounting and personnel departments maintain less documentation;
• The staff is being reduced without losing qualified employees. Thanks to outstaffing, you can significantly reduce the number of employees after a formal transfer to another company. In reality, a person does not feel any changes and continues to fulfill his duties;
• Replacement of key employees during vacations, sick leave, etc. Every employee is entitled to vacation, but during this period someone will have to do his work. This is where a temporary employee comes to the rescue.

Disadvantages of hiring temporary staff for an employer

• Wage. According to current legislation, the salary of a temporary worker should not be lower than that of a full-time employee of this qualification;
• Unfair attitude of the leased employee. Very often, temporary staff do their work carelessly. Such employees understand that this work is temporary and do not overwork themselves. Although it depends on the human qualities of the employee;
• Limited period of stay of a temporary employee at the enterprise. A temporary worker cannot work in one organization for more than 9 months, so after this time he will have to be hired as a permanent employee or replaced with another leased one (possibly less experienced);
• Information leak. If an enterprise with a high level of secrecy uses the services of outsourcing companies, then you need to be sure that these are trusted people who will not take advantage of their official position. Therefore, you need to carefully choose a company that provides personnel outsourcing services;
• Also, with outsourcing, no one is immune from poor quality work. In this case, the company that transfers part of the functional tasks cannot properly control the execution of the work, because does not have the necessary leverage.

Benefits for the employee

• Flexible work schedule. A hired employee, depending on the work performed, may have a flexible schedule;
• Employment in large companies. A leased employee has the opportunity to work in large organizations, while he gains invaluable experience, and all places of work are recorded in the work book;
• Continuous experience. By changing places of work, the length of service is not interrupted, because the person is officially employed by a recruitment agency;
• Regular salary is not lower than that of employees of the same qualifications;
• Opportunity to get a permanent job.

Disadvantages for workers

• The main disadvantage of being an employee is the constant change of jobs. It is because of this that many people do not like to “jump” from one place to another.

How to outsource - step-by-step instructions for beginners

If you understand what outsourcing is, evaluate its pros and cons, and decide to switch to it, you can use the step-by-step instructions below for beginning businessmen.

Step 1. We analyze the company’s activities

Just after hearing about the benefits of outsourcing, you should not rush to enter into an agreement with an outsourcing company. It may also turn out that you don’t need it at all.

Therefore, first of all, you must carefully analyze the activities of your company. That is:

• determine the goals and objectives of the transition to outsourcing;
• calculate how much it costs to maintain a full-time service;
• calculate how much outsourcing services will cost;
• compare the indicators and draw conclusions.

The better you analyze your business, the more accurately you can determine whether you need to outsource or not.

Step 2. Select an outsourcing company

The success of your enterprise depends on how seriously you take the outsourcing company. for this you will need:

• make a list of requirements for the outsourcer;
• then study the market and settle on several companies that best suit your needs.

When choosing a specific outsourcing company, you need to pay attention to the following criteria:

• reputation of the outsourcing company;
• work experience;
• presence of reputable clients;
• reviews about the outsourcing company;
• availability of an appropriate license;
• must have insurance.

Before concluding an agreement, negotiate, clarify the terms of cooperation, and only then make your choice.

It would be best if you, for help choosing a company, contact specialists who can provide good advice. It is desirable that such a company works in different legal areas and has a solid reputation.

Step 3. Study the terms of the contract

When concluding a contract, you will need to provide the outsourcing company with a list of functions that you are outsourcing and discuss all the details.

It is especially necessary to pay attention to the following terms of the contract :

• subject of the agreement;
• number of employees involved,
• their qualifications;
• the amount of work to be performed;
• cost of contractor services;
• procedure for payment for services;
• rights and obligations of the parties; duration of the agreement; procedure for accepting services.

Here it is also important to take into account that the legislation of the Russian Federation does not in any way regulate the issue of providing outsourcing services. This is a big disadvantage of working with third parties. Therefore, the contract becomes the only source of control over the fulfillment of the terms of the transaction.

It is very important to reflect all options for resolving all possible issues and controversial issues. It is necessary to describe in detail the list of services provided. The agreement is signed by the parties who have the right to do so. Also, be sure to check whether the outsourcing company has a license to provide services.

Step 4. Sign the cooperation agreement

A lawyer must be present when signing a cooperation agreement. This will ensure that the contract is drawn up in accordance with all legal regulations and will be the key to successful cooperation.

The signed agreement must necessarily contain a section on maintaining confidentiality and transfer of information in the event that you terminate the agreement unilaterally due to the partner’s failure to fulfill its obligations.

Step 5. Switch to a new work format

Once you enter into a collaboration agreement, the goal is for you and your employees to reach mutual understanding with your partner. You will need to try to provide as accurate information as possible about the situation at the enterprise, and the contractor will need to fully understand it. The faster you reach mutual understanding, the faster you will see the results of your new cooperation.

Who can provide outsourcing services and how such labor relations are regulated

In fact, external labor resources can be either individual independent specialists or large companies. At the same time, they can be an independent business entity, parts and divisions of large companies, as well as simply individuals.

Officially, the concept of outsourcing does not exist in domestic legislation, as well as a strict sample contract. Consequently, when formalizing such labor relations, the interacting parties can be any legally capable persons and legally operating organizations between which the contract for the provision of services applies. Such an agreement usually stipulates:

• list of works (services);
• qualifications of attracted specialists;
• turnaround time;
• liability of the parties and fines imposed in case of failure to complete work on time;
• payment format for services;
• duration of the contract;
• requirements for maintaining data confidentiality;
• conditions for early termination.

At the same time, the contracts themselves can be drawn up for outsourcing, provided in various volumes:

• Complete - with this format, the contractor receives complete (or almost complete) information about the company’s activities and performs all types of work in the selected sector. For example, this could be the development and integration of optimal logistics processes at all levels of the company.
• Partial - only part of the work in a certain area is transferred. For example, the tasks of an outsourcer may only include servicing specific software, without access to the entire IT system of the enterprise.
• Joint - provides for the transfer of part of the services under subcontracts. Thus, outsourcing of accounting services for an enterprise can be carried out by one specialist, and the submission of tax reports can be carried out by a subcontractor attracted by him.
• Intermediate – involves transferring the company’s own specialists under the management of an outsourcer.

Personnel outsourcing - focus on targeted business processes.

Practice shows that, as a rule, the best results are obtained by narrow specialists who are professionals in their field and have quite a lot of practical experience. The main reason for this phenomenon is that day after day these people practice their skills and improve their professional competencies, concentrating on the result and quality of the work performed and the service provided. In the process of professional activity, they are not distracted by other types of activity, regardless of what work is their professional field of activity, even if it is physical labor or a mental process. Such people always have order in their heads and in their work, their qualifications, experience and practice allow them to provide services of the highest level and quality.

A similar situation often arises in business. Managers understand that they spend too much time and effort on things that are in no way directly related to the quality of the product or service being produced. The responsibility of any company leader and manager is the company’s development and financial efficiency.

In conditions when legislation determines the rules of work, labor and tax documentation presses under the pressure of responsibility, when an error in the execution of accounting documents can cost the company dearly, the first person in the organization has no time to think about the strategic development and planning of the future of his company. Then what they teach in all business schools can come to the rescue - delegate some of the functions and responsibilities, in particular, you can outsource such business processes as hiring and rotation of personnel, as well as full accounting and legal support for the functions of selection, search, support, reporting and provision of specialists with appropriate qualifications.

In this case, outsourcing allows you not to be distracted by processes such as recruitment, employment, registration, rotation and support of personnel; personnel records management; calculation, accrual and payment of wages; legal aspects, accounting and nuances of personnel work. All this goes to the control of the partner - the outsourcing company, and the manager can only think and act in the direction of how to improve production, increase the company’s competitiveness and earn an additional ruble.