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Tuesday, 28 August 2012

Eight Great Tips To Help You Choose The Most Qualified And Appropriate Offshore Supplier


The subject of offshoring has generated its share of ink and bytes. But, so far, not much ink has been spilt on the subject of selecting the right offshore supplier. I won’t deny the fact that offshoring is a mammoth step to take, and picking a compatible supplier can turn challenging. And believe me choosing a supplier is a difficult task mostly because of the countless options available today. After all, failure to pick the right partner can lead to a disruption of business, or even legal and reputational problems.

But if you are clear about where you want to go and what you want to offshore, selecting a supplier should be as easy as eating pie. Use the following tips as a guideline to review the right offshore supplier.

Tip#1 - Ask for References

A little research will go a long way in finding a qualified and appropriate supplier. This is the first thing you would want to do. Find out how long the supplier has been in business? Whether they have worked on a project similar to yours in the past? How many offices do they deliver and operate from? Search them on Google and other Social Media platforms to understand their brand image. Find out their history and business experience.

Importantly, ask for references,  know their staff retention rates, learn about their work culture, get to know how many contracts they are able to renew at the end of their contract periods, and ask if they have UK-based support staff.

As far as references go, check how long their clients have been with them and if they have referred them in the past. Contact their current clients and find out their levels of satisfaction. Conversation with them might uncover business practices, and how they deal with conflicts or problems. It will also be helpful if you ask for the providers' strengths and weaknesses.

Tip#2 - Financial Viability

The knowledge about the supplier’s financial stability should be of prime importance before finalizing a supplier you plan to work with. Assessment might involve a review of the supplier’s audited financial statements, annual reports, business growth plan and other information that supports financial analysis. Some research on and threatened or pending financial or legal claims on the supplier is a good area to explore.

Tip#3 - Quality Measures

I perfectly understand that Quality compliances are only a good general measure and the best offshore suppliers should have Quality built into their genetic codes.  However, it doesn’t hurt to find offshore suppliers that follow globally-accepted standard models like ISO. Find suppliers that are certified by the latest, revised ISO standards as these adopt a process oriented approach and emphasize on measuring process performance and effectiveness. Other than helping measure and improve quality standards, it also ensures that the supplier follows defined processes and abides by quality parameters set by the regulating body.

In terms of quality, ensure that your offshore supplier delivers similar or better output than your own internal resources. Don’t settle for anything less.

Tip#4 - Language & Cultural Congruity

Many an offshoring deal has been marred by poor communication. There is research based evidence which says that 38% of outsourcing deals fail because of a lack of cultural congruity between the supplier and client.

We suggest you spend at least a fortnight with your offshore supplier to get a first-hand experience of their work ethos and culture.  Get involved with them; attend the staff meetings; interact with your extended team. This is the best way to experience their work culture.

Tip#5 - IT Infrastructure and Technical Capacity

ISO 27001:2005 is a legit proof for an offshore supplier’s IT capabilities. However, the next best bet would be a visit to the offshore supplier’s workplace and finding out if they use the best IT Infrastructure. A personal visit helps understand if they have the proper technology to handle your project. Moreover, you will be able to analyze and understand their processes, methodologies and workforce employed to run your payroll process.

Tip#6 - Reporting Tools

Look for a supplier with a proven track record; suppliers that provide reports on a daily, weekly or bi-weekly basis. Along with helping you monitor the performances of people that work on your process, you will get time to take action as the work happens. The only thing that should change when you offshore is the location the work is being processed at.

Tip #7 - Awards, Affiliations & Industry Recognitions  

Awards and industry recognition is a good general measure to learn about the reputation and quality of your offshore supplier. Research says that companies just like employees perform better if they are recognized for their accomplishments. Also, recognition speaks a lot about the quality of a supplier and the strength of its management team.

Tip#8 - UK-registered Supplier

Last but no less important than the first, before choosing your supplier, take some time to learn about the owners of the company and the country laws they operate under. It is important that you choose a UK-registered supplier as it makes things easy and you don’t end up chasing people in a foreign land, if needs be.

The Inevitable Footnote

So now that you have established what to look for in an offshore supplier, it must have become a lot easy to link your requirements. Right? Well, honestly, at first glance most offshore suppliers might seem to serve the purpose. Nevertheless, before you hit the road don’t forget to perform a due diligence on their financial stability, track record, data security measures, reporting tools, industry recognitions, the country laws to which they comply, and most importantly their quality of service.

With careful planning and evaluation you should find the most capable supplier and enjoy the benefits of offshore outsouring.

Wednesday, 22 August 2012

Eleven Benefits of Offshoring Your Payroll

You probably have heard a lot about payroll offshoring. It is beginning to be seen as a response to an increasingly competitive marketplace. And not without reason. Research credits the rise of  payroll offshoring to the need for businesses to manage costs and improving business efficiency during these unstable economic times. 

Forced by the early 2000s recession and interested in achieving a competitive advantage, UK businesses took to payroll offshoring as early as 2003. Offshoring as predicted quickly turned into a strategic activity and a key part of wider organizational change programmes. The early success stories further helped champion its case. Today more and more non-core, routine tasks like payroll, accounts preparation, management accounts, bookkeeping, and VAT has found its way into offices in countries like India, for whom these back-office services are a specialty. 

Offshoring companies can help achieve significant cost-savings only because they work from a location where the overheads are lower than in the client country. The money saved can be passed on to clients, devoted to the company’s core activities, i.e. things that a business can do most profitably. Additionally, the money can further be channeled into funding more sales and marketing activities.

Other than the quickly visible benefits of cost-savings, offshoring the payroll helps reduce overheads that come in the form of: recruiting and training specialist payroll staff, buying and maintaining systems and software, and dealing with HMRC.

Including the above, the following eleven benefits explain why business owners should stop processing their payroll in-house:

1. Lower operational cost

This is commonly cited as the primary driver. Under an ad-hoc business model, businesses pay for the resources as and when they need them. Even if they sign up for a dedicated resource, substantial reduction in costs is quickly visible. It is not uncommon for businesses to reduce their in-house payroll costs by close to 50%.

2. Increase payroll efficiency

This is perhaps, after cost reduction, the second most cited benefit. Small and medium sized businesses lack access to resources such as technology and infrastructure to perform an efficient payroll. However, when they offshore such a task to an offshore specialist, they can easily achieve the highest efficiency and productivity levels that their big competitors do. An offshore supplier can create this level playing field only because they are specialists who operate from a location where the overheads are lower than the client country.  

3. Improve margins

For businesses, payroll processing is generally considered a low-margin activity. Offshoring not only reduces costs but ups the margin. It is especially beneficial if businesses have huge volumes of payroll work.

4. Save time

Offshoring allows businesses to spend billable time on delivering higher value work, building and maintaining client relationships, and growing the business. It also frees up an in-house employee's time which can be spent on more productive duties.

5. Get a competitive advantage

Gives businesses the edge over competitors as they can now expand their business by offering higher valued services to their clients.  A recent survey of QX’s current clients found that offshoring allowed them to take on more profitable work.

6. Avail flexible resources

One of the most unique benefits that lets businesses run a lean operation- During peak seasons when they are inundated with work they can easily scale up the offshore team, and when work is slow they can scale it down. Further, they don’t have to worry about back-ups to cover holidays, sickness, maternity, together with the time and cost it involves.

7. Escape the maze of legislation

Offshore suppliers take care of staying a step ahead of the ever-changing raft of legislation. They take over the complex legislation, and work in partnership with HMRC and Companies House so businesses can  concentrate on delivering the primary services of their company.

8. Gain control

Pre-defined SLAs and KPIs give a business full control over their offshore operation. With offshoring, they  even get to manage the workforce in their own way through a single-point-of-contact located offshore who reports directly to their Head of Finance.

9. Share risk

Another less-spoken about benefit which directly affect the growth of a business. Offshoring when used as a business strategy allows a business to significantly reduce their company’s exposure to risk. To add to that, it reduces the risk of having one employee responsible for payroll who may not be available at a critical time due to sickness or holidays.

10. Access to a specialist team and industry best practices at a low cost

This is especially beneficial for small and medium payroll service bureaus, accountancy practices and recruitment companies that are looking for ‘specialist’ employees. Offshoring opens access to a team of professionals who are specialists at running their payroll. Particularly in areas of technology, offshoring provides an instant access to industry best practices that might be too cost-intensive to buy or hire.

11. Level the playing field

It's a given that small or medium sized enterprises can't match the in-house quality of non-core tasks that big enterprises can maintain. This changes totally when SMEs get access to a specialist team that in the past was only available to big enterprises.

Wednesday, 1 August 2012

Top 4 Reasons RPO Companies Are Moving Offshore - Part 2

This is the second part in the blog series discussing why more and more RPO businesses like yours are choosing to move their non-core operations to offshore locations. In Part 1, we looked at the efficiency issues a business was riddled with before they decided to offshore. We also examined that saving time and money, along with a desire to maximize efficiency, were the primary drivers behind this trend.

Through Part 2 of this blog, while still continuing my conversation with Chris Harrison- QX's VP for the Recruitment Division, I hope to bring two other equally important reasons to the discussion table. This is only to encourage you to understand that you don't need to travel the rough road that businesses these days usually do, before they realize that offshoring is quickly turning into a contemporary business strategy.

Reasons # 3 & 4 why RPO companies are moving offshore..continued

# 3 Offshoring Improves Turnaround Time (TAT)

It’s no secret that offshore companies are more productive because they work out-of- hours and weekends.
According to Chris, “Your offshore resourcing team not only saves you time by working on admin functions, but also gives you a valuable time advantage over your competitors. While your competitors are on their way to work, you already have CVs of active candidates in your inbox ready to be sent to your client. And this greatly reduces the time-to-hire. Offshoring literally puts you hours ahead of your competitors.”

He is interrupted by a phone call before he comes back and continues, “Let’s be honest. Time is of essence here; especially so, for a staffing company. Since most businesses would like the talent acquisition/hiring to be done in the shortest time possible, offshoring should be as a shot in the arm for every business that is reeling under the pressure of budget and competition. With quick turnaround times and an improved candidate quality it’s a bet you can’t lose.

When I asked him for some numbers he said, “We source and format hundreds of CVs each day. With this kind of volume, and the speed at which we deliver, it becomes an important metric from a business standpoint.”

# 4 Offshoring Improves Staffing Scalability

Your work volumes change like the whims of the seasons. Specialist offshore RPO companies offer economies of scale i.e. an option to scale the size of the offshore team as per your needs. This, as per Chris, is one of the most prominent reasons why businesses today are choosing to offshore.

I asked him how QX clients benefit from the option of scalability.  “At QX, our clients get the option of scalability with both the ad-hoc and dedicated engagement models. Depending on work volumes, you can choose the one that fits your needs. When you are inundated with work during peak seasons you can easily scale up the offshore team, and when work slows you can scale it down.”

When I asked him if he could point out 1 more reason staffing companies should hitch the offshoring wagon, he concluded by saying, “There could be 10 other smaller reasons that could warrant the case for offshoring, and we’ve talked about the most important ones. Nevertheless, I would like business owners to know that as the offshoring trend continues, the recruitment functions will move toward the center stage and dramatically change the way the Staffing Industry operates. I think it could be the very decision that separates you from achieving peak performance and success.”

The Bottom line

As the Staffing Industry evolves you will need to push yourself to find your company’s success, how you can save time on admin functions and gain advantage over your competitors. I hope this post encourages you to make that decision you’ve long been thinking about. Call QX today on 0870 803 1033 or contact me at anil.nair@qxltd.com and lets discuss how we can work together.

In the meantime, if you have any thoughts, suggestions, ideas, or even arguments please don’t hesitate to share them in the comments section below.