HR BPO – Can cheaper mean better?

A study on profitability of outsourcing was carried out by Nasscom. According to the study, paperwork flow accounts for 5% to 15% of companies’ turnover, as well as 45% of management work time. Close to 65% of surveyed European companies do not monitor such costs and merely 10% are capable of evaluating their expenses in the field. The reason? Quite frequently, the companies cannot afford to spend their time on analyzing processes not related to their core business. Subsequently, the costs of these processes accumulate and their quality is low.

A study on profitability of outsourcing was carried out by Nasscom. According to the study, paperwork flow accounts for 5% to 15% of companies’ turnover, as well as 45% of management work time. Close to 65% of surveyed European companies do not monitor such costs and merely 10% are capable of evaluating their expenses in the field. The reason? Quite frequently, the companies cannot afford to spend their time on analyzing processes not related to their core business. Subsequently, the costs of these processes accumulate and their quality is low.

The solution to the problem of time consuming business processes and costs related to them lies in outsourcing. According to the Nasscom’s study, BPO may reduce costs by up to 40%.- 50%.

Companies offering BPO services take advantage of highly specialized, dedicated IT systems. Outsourcing frees company’s resources and provides faster results than traditional solutions. Moreover, outsourcing eliminates backlog resulting from vacation time, medical leave of absence and work overload. Promptness and high quality of services are top priorities of any outsourcing company. Without outsourcing, comparable results would entail significant expenses such as:

• IT system implementation (in case of businesses without any IT system)
• continuous availability of trained personnel
• employment of system administrators capable of providing technical support
• purchase and maintenance of an IT system
• personnel training and access to business news
• recruitment of qualified personnel and employee turnover due to medical leave or layoffs

Consequently, outsourced business processes are managed in a timely manner by the best specialists available and the costs are split between several clients of an outsourcing company. Moreover, an outsourcing partner remains solely liable, both legally and financially.