Employment outsourcing services are the key to saving cost and effective operation which is the main principle of many young businesses these days. The main idea is to outsource repetitive and high-in-risks tasks to an expert organization to minimize costs and boost the business performance.
Certainly, there are numerous benefits for this new labor model. However, there are some disadvantages that might concern the user organization, depends on each business model.
Advantages of EO:
• Cost- and material-saving: The service fees from HR agencies are usually much lower than fees for HR internal department. Besides saved materials such as salary, or benefits for internal HR department, companies can also get rid of the risk of paying compensations in case of incidents. Spaces and materials, such as office supplies, can also be cut down to the minimum thanks to the outsourcing.
• Time-saving and interfered workflow: The precious resources of time will be saved significantly since all of the repetitive tasks have been outsourced. The workflow will also be maintained smoothly thanks to the loosen management responsibility for the executives.
• Guaranteed outcome: Thanks to the expertise from HR agencies, the HR management will be conducted in a professional and know-how system, which can ensure the outcome.
Disadvantages of EO:
• Commitment can be a problem, since labors hired by intermediaries are likely to build trust with the agency, instead of the rightful employer. This is the core problem, which leads to other following obstacles.
• Undemanding labor causes the unsatisfied performance and rooked working ethics. The end product, the brand image, or the “face” of the company, will be damaged accordingly if such “uncertainties” keep occurring in the long run.
• Gaps between agreed conditions and actual outcome are also quite common in the client-agency relationship. The received outcome may be unmatched with the contract on the aspect of time, process, or performance.
• Cost-wasting: Cost is certainly the essential motivation for companies to acquire HR services. However, mistakes in choosing the agency or being misled by poor organizations can lead the client to the massive loss in capital.
By using the EO service from the intermediaries, business leaders decide to make an investment. And like other crucial investment decisions given out every, a careful and profound consideration, which must include both prospective benefits and potential risks. In order to to take full advantage of the EO service, which is cost-saving and smooth workflow, leaders must understand their business’ needs, capacity and model, as well as go through a profound decision-making process.