Outsourcing; Cost Savings or Risky Business
RPOs, HROs and BPOs all have one thing in common, cost savings. Utilizing economies of scale and by leveraging business potentials and synergies from within your organization these services can dramatically increase productivity and efficiency. The risk, and there is always risk, is loss of control of the processes which may define your organization. Owners and managers must weigh the risk of losing direct control over critical business functions for apparent short term gains. Does the recruiting process follow EEOC guidelines or support your company's mission statement. The 'whys' in any endeavor are often more important than the 'what's'. Don't forget the core beliefs that put your firm in the successful place it is.
Are there processes which if outsourced create greater long term costs from litigation such as negligent hiring, discrimination or other actionable suits against your firm. Even if the BPO claims that it will indemnify your company in that event you can bet the opposing party will still go for your pockets as well.
Make sure the outsourcing partners are fully disclosed and that their processes have been vetted. Background checks for instance can be done for as little as five dollars through a third party database. Does a five dollar background check sound like a good idea? Do you think a jury would think so in the event of a negligent hiring suit? Do you think the board of directors would agree if profits have been diminished due to employee theft and embezzlement which causes 33% of business bankruptcies? Will OSHA care that you saved money when work place accident increase due to inferior screening processes?
The FCRA can fine up to $50,000.00 per incident per applicant that has not been screened according to their guidelines. Does a cheap background check meet those guidelines and is your BPO an expert in these matters? In most cases no, they are not. Remember risk mitigation is an important part of a companies continued growth and success. Would you buy $5.00 fire insurance? No, it wouldn't seem reasonable. So remember when it comes to protecting your most valuable assets, your employees, outsourcing for a short term gain may cause a long term loss!
