Staff Outsourcing is one of the many human resources (HR) solutions gaining traction in the employment industry. This practice involves using a third-party company to perform tradition HR functions such as staffing and hiring.
This practice became mainstream in the 1980s and through the 1990s. Outsourcing in this era was driven by the public sector, with the private sector catching up in recent years. There are many reasons why organizations use outsourcing solutions, but one critical reason is cutting labour costs and overall business expenses.
According to a recent survey, over 70% of companies cited cost reduction as the top reason for outsourcing solutions. With the costs of hiring a new employee constantly rising, it’s easy to see why outsourcing is a popular choice for many companies.
With that said, organizations looking to set up shop in Uganda should also consider outsourcing solutions for many reasons. According to the World Bank, Uganda’s labor force is estimated to be around 16.5 million, with a significant majority aged between 14 and 64.
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However, more importantly, 85% of Uganda’s labor force lives in rural areas. Access to Uganda’s rural areas has proven difficult as the country is significantly underdeveloped in these areas. As a result, attracting and retaining top talent might prove challenging for many businesses.
Staff outsourcing in Uganda is a top winning business strategy. However, many staff outsourcing models suit the needs of companies where top talent is out of reach geographically or financially. Read on to uncover other essential benefits of staff outsourcing in Uganda.
What is Staff Outsourcing?
Human resource HR outsourcing, also known as staff outsourcing, simply refers to delegating HR functions to a third party, intending to improve productivity while reducing costs. Multiple studies have shown that some companies might benefit more from outsourcing some if not all of the farmer’s HR functions.
The HR outsourcing industry is a large one that is estimated to grow in the near future. A report published in 2020 showed that the global HR outsourcing industry is expected to grow to over $45billion by 2027. This figure came to be following a revision that took into account COVID-19.
Payroll services are perhaps the most sought-after HR outsourcing solutions. However, there are other types of HR outsourcing solutions such as recruitment, compensation management, executive search, and job evaluation, among others. Such activities are repetitive and often require an effort-intensive HR department. However, these activities can be turned over to a third-party specialist who can deliver results.
There are a ton of third-party solution providers in Africa. However, many markets, including Uganda, present a different HR challenge, not to mention the constantly changing business environment. For such reason, you should consider a top HR solutions provider with the experience and professionalism to handle your business’ HR needs in such markets.
How Does Staff Outsourcing Work?
There are many ways in which staff outsourcing can be done. Generally speaking, it starts with engaging a professional HR company to take care of some if not all of your HR functions.
It is worth mentioning that different HR companies provide different HR solutions. Some companies focus on outsourcing common HR functions such as payroll and administration, while others specialize in a more holistic approach. Either way, be sure to confirm the services rendered by the HR company.
Most importantly, you should seek solutions that mitigate your organizational risks while solving your HR problems. With that said, here are a few ways HR outsourcing works.
- Business process HR outsourcing (simply known as BPO). This arrangement involves an external HR management team that handles discrete HR activities such as recruitment or payroll management. However, such services could extend to the entire HR function.
- Application, software, or facilities outsourcing, which pertains to third-party HR firms handling the technological needs of the HR department. It involves installing effective HR software, training the existing staff on HR technologies, or assisting with physical infrastructure to support HR activities.
- Shared Service HR outsourcing involves using HR solution firms to assist with transactional or administrative functions of the HR.
Why do Businesses and Companies Go for Staff Outsourcing?
There are many reasons why a company would go for staff outsourcing services. But perhaps the biggest motivating reason for companies to outsource is to increase productivity while saving money.
With that said, here are other reasons why staff outsourcing.
Why Staff Outsourcing?
Cost Reduction
Globalization is great for businesses, especially when taking into account the role of the internet and e-commerce. However, this phenomenon also brought about competition, especially in emerging markets such as Uganda. But the aim always remains the same; produce high-quality goods at the lowest cost possible.
In most cases, the cost of outsourcing hr functions to professional companies is often cheaper than the cost per employee. This is where outsourcing comes into play. Staff outsourcing provides companies with the chance to cut the costs of their operations. It also allows businesses to focus solely on their operations, maximizing their output.
Risk Management
Outsourcing in companies such as Uganda is worthwhile considering the risk exposure. As mentioned above, Uganda is an emerging market facing several challenges, including human capital. However, it takes a considerable amount of time and resources to put up a facility, fill it with the necessary equipment and employ the required personnel.
Outsourcing in a market such as Uganda’s is an organization’s best bet against risk exposure. For instance, you don’t have to spend a ton of resources implementing new HR software and train your existing staff on the same. The human capital in Uganda will likely make this a difficult task to accomplish. Instead, outsourcing such aspects of the business will cover the risk of failure, retrenchment, and time wastage while maximizing productivity.
Take Advantage of Global Opportunities
Over the past few decades, outsourcing has provided individuals from all over the world, including their world countries to earn a decent living at competitive salaries. Additionally, outsourcing has also helped organizations across the world. Companies such as Ford, Fox News, General Motors, and IBM have significantly benefited from outsourcing.
Businesses can now take advantage of opportunities on a global scale. Organizations can now focus on new solutions, new products, and new markets while delivering most if not all of their HR functions to the outsourcing companies. If you are starting your business in Uganda and want to know more about what outsourcing can do for your business, don’t hesitate to get in touch with us at Flexi Personnel.
Other Factors to Consider When Outsourcing in Uganda
Other than cost savings and the pricing scheme, there are several other factors that businesses need to know before outsourcing their HR functions. They are as follows;
- The Service Level Agreement– This is one of the most crucial aspects of outsourcing that you should look at before outsourcing your HR functions. This document will help you avoid any grey areas about the quality of services that you’ll be getting.
- Supervision– Before choosing a HR outsourcing firm, it would be best to know if they can work with little to no supervision. There should be no room for sloppiness.
- Ability to meet deadlines– Ability to deliver on time is an important factor. Remember, time is money and if a vendor fails to deliver on the set deadlines it can lead to major bottlenecks.
To Whom Should You Outsource Your HR Functions?
Now that you’ve decided to outsource some of your HR functions in Uganda, your next query becomes who to outsource them to? There are different types of organizations where you can outsource your HR functions. They are as follows.
Administrative Service Organizations
As the name suggests, these organizations provide administrative HR functions. Such functions include processing payroll, accounting for payroll taxes, and performing direct deposits. Assuming you are not from Uganda, you should consider such organizations, as most of them go as far as assisting with legal concerns, insurance, employee compensation, and other compliance issues.
Human Resources Organizations (HRO)
HR organizations are designed to provide HR services to businesses. However, these HR organizations are tailored to provide such services to large organizations (over 1000 employees). It is common for businesses to outsource all their HR functions to these organizations.
Should this happen, the HRO will take full responsibility for the company’s HR department. However, larger companies tend to keep strategic HR functions in-house and will often outsource tactical and administrative HR roles.
Staffing and Recruiting Agencies
As the name implies, these agencies focus solely on the staffing and recruitment aspects of HR. However, these aspects of HR are some of the most important yet time-consuming and costly. In fact, a study by LinkedIn showed that it could take anywhere from a few days to months before hiring. Additionally, but it takes a longer time for organizations to hire senior management staff.
It doesn’t stop there; the cost of having ‘bad hires’ could weigh heavily on an organization’s resources and ability to become profitable. However, top HR firms such as Flexi Personnel, will not only help you fill positions requiring highly qualified staff, but they will also help you meet your short-term and long-term needs on the same.
Agencies like Flexi Personnel typically have a large pool of top talent and qualified candidates. This means that it takes them a shorter time to find qualified candidates who meet your business requirements.
Professional Employer Organizations (PEOs)
You are better suited to working with PEOs if you are a mid-to-large-sized company. These organizations are better equipped to handling companies with less than 200 employees. Businesses enter into a co-employment relationship with PEOs, allowing the latter to manage their employee records, taxes, payroll, compliance, performance management, and more.
Verdict
The HR plays a huge role in the success of your company. However, outsourcing HR functions has proven to be a top winning strategy for businesses, especially in emerging markets like Uganda.
To sum it all up, HR outsourcing solutions will help you cut costs, mitigate HR function risks, and take advantage of market opportunities. For such reasons, it would be in your business’s best interest to consider outsourcing, especially when setting up camp in Uganda or any other Sub-Saharan country.
Are you Looking for Staff Outsourcing Services in Uganda?
The market for HR outsourcing, particularly in countries such as Uganda, is not getting any easier. HR demands in Africa and regions like Uganda are constantly changing, making it challenging for companies to nail their HR solutions accurately.
For such reasons, it would be in your best interest to consider an experienced and professional HR solutions provider. Flexi Personnel has mastered the complete process of HR solutions in Africa. Our expertise and in-country knowledge of over a dozen African countries, including Uganda, has enabled us to cover the full spectrum of HR services.
Additionally, our experience has led us to work with top organizations from all over the world. We are constantly adapting to the changing and competitive markets in Uganda and Africa as a whole. We would like to work with you on your next project. Please feel free to contact us for more information at Flexi Personnel.
