Outsourcing problems happen. This occurs in particular when an organization first engages in outsourcing practices. There can be an adjustment phase when entering an agreement with any new outsourcing service provider. It’s a new way of doing business, a new approach; and adapting to your new business partner is important.
While outsourcing problems are bound to happen, there are ways to overcome them. Here are some of the most common outsourcing issues companies face today:
Many companies have certain expectations of how things will work in theory. Often, they do not work out as smoothly in practice. Adding an outsource service provider is meant to help your company improve a function, but this doesn’t always happen right away. Time is needed for both parties to adjust to each other and identify the best ways to work together.
To overcome this hiccup, expect a learning curve and a few rough patches. Build this into your timeline and consider it when setting business objectives.
2. Organizational culture outsourcing problems
Outsourcing will undoubtedly have an impact on your organizational culture. What many companies overlook is potential clashes between the outsource service provider’s company culture and their own.
You can overcome this issue by spending the time to understand the outsourcing company’s culture and approach to doing business. This will help you identify policies or values that could interfere with your working relationship. Both sides will have to give a little to find the right flow.
3. Process adjustments
Once you agree to terms with a service provider, many companies are not prepared to actually start working together right away. This causes work flows to stop, services are not initiated right away, and objectives are not met. To avoid this issue, it’s important to start putting new processes, people, and work flows in place as soon as possible to minimize the ramp-up period.
4. Decision rights and authority
Who makes the decisions is a common source of contention. Internal employees often assume they have the authority and decision rights when, frequently, some authority is transferred to the service provider as part of the outsourcing agreement.
To overcome this issue, companies and outsourcers need to come to a clear understanding of who has the authority and decision-making power for the affected business functions. Write this into the service contract and make everyone involved aware of the terms.
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Jesse’s role with AugmentHR is to seek out organizations that can truly benefit from our unique approach to solving HR and talent acquisition problems. After 17 years in the recruitment industry, Jesse is driven to educate on more efficient and cost effective ways to approach hiring. Jesse has worked in every facet of talent acquisition: staffing, corporate, consulting, and as an independent contractor. He has a keen interest in helping others and spends much of his time volunteering with non-profit organizations, like CivicAction, 360Kids and Treble Victor Group. Always on the move, Jesse fills the rest of his free time competing in a variety of sports. Jesse is a former 5 time Karate Ontario champion, military biathlon champion, and an Ironman triathlete.