Old School vs New School Series: From Staff Leasing to Outsourcing to Impact Sourcing

February 17, 2017 Claire Ponsaran No comments exist

Employers used to hire college graduates and kept them around until they reach retirement age. Employees were paid with a standard compensation and benefits package that includes a suitable pension plan and unemployment insurance.

The World is Changing

Today, employees rarely stay with one company for many years. Because they belong to the Millennial generation, they’re used to living from paycheck to paycheck and hopping from one job to another.

While many companies have begun offering extra perks, such as special discounts at Starbucks or gourmet food at the cafeteria, the compensation and benefits package normally suck for the rank-and-file employees in small to medium-sized businesses.

And with the rise in popularity of contingent work or freelancing, few home-based workers receive a complete set of benefits from their ephemeral employers.

The World has Changed

Globalization has led businesses to shift their investment focus from the manufacturing sector to the service sector. It seems “old school” employment models do not apply anymore to this new world.

Businesses began to adapt by taking advantage of staff leasing. While this approach led businesses to exploit loopholes in the tax system and tempted them to steal from their employees, staff leasing remains one of the effective ways of lowering the overhead costs of a business.

Staff leasing, however, will not remain competitive for the long-term. If you want to reach your business goals at a faster pace than usual and survive the challenges of growing your business in a new millennium, consider outsourcing.

Outsourcing is the New Staff Leasing

Outsourcing has the same benefits as staff leasing. It lowers your overhead costs and your taxes.

Onshoring or nearshoring allows your business to calculate the costs using familiar formulas and computation tables. And, you don’t have to worry about drastic fluctuations in the currency exchange rates.

Offshoring, on one hand, drastically reduces your overhead costs and other expenses. There may be a difference in the quality of work, especially when speaking and writing in English. But, many outsourcing workers in developing countries have great work ethics. They’re more likely to stay with one company for a longer time than their American counterparts because of employer loyalty.

Different outsourcing models are available for businesses that plan to outsource to an offshore location. They may build a captive contact center and have complete control over the day-to-day operations of the offshore company.

Some businesses may opt for a managed services model that allows them to have greater control over the work processes of their outsourced staff. These processes include setting up the workstations, installing the required software, evaluating the work performance of their staff, having a say in disciplinary actions and decisions to terminate employment, and deciding when to end the contract without repercussions.

Socially Responsible Outsourcing

And now, outsourcing has evolved from a purely for-profit endeavor to a business activity with a heart. Businesses are concerned about their outsourced staff’s health and the quality of life they have. Some outsourcing companies have begun paying their people up to 10% more than the standard rate for their region. Outsourcing has branched out to the knowledge processing field where jobs tend to last longer than call center jobs.

This is the new face of outsourcing. It’s generally known as impact sourcing or socially responsible outsourcing. But it can also be called fair trade outsourcing or strategically sustainable outsourcing.

Impact sourcing aims to provide jobs to less fortunate individuals who have the right qualifications with the purpose of helping them raise their economic status while also helping clients from developed countries find low-cost skilled labor. Socially responsible outsourcing companies provide stable jobs to qualified workers just like staff leasing.

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