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Insights   >   Outsourcing and why the world's leading companies adopt the practice

Outsourcing and why the world's leading companies adopt the practice

Author: Thomas Kenworthy
Aug 8, 2022
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Employers • KSA

Whether we look at the GCC or cast our net wider to reach a global scale, there's no doubt that HR outsourcing has become a shopping list for multinational companies to streamline processes and optimize deliverables. In this article, we explore how agile businesses in the region are adapting to the increasing demands of their customers, in a business environment that is arguably becoming more competitive as it matures.

HR Outsourcing is often misunderstood, many companies treat the model as a buffer or band-aid solution to a much larger business issue; but for the few that truly understand the arsenal of benefits it can offer, they're able to adapt and orientate quickly toward market changes. Perhaps this is leading to an increasing number of UAE-based multi-nationals, in particular, who are now leading business restructuring to include an HR outsourcing contingent. So why is that?

"The industry is evolving from a pure cost-efficiency model to new innovative value-creation models."

Deloitte: HR Outsourcing and Shared Services 2019-2023 Global, Middle East and UAE Industry Outlook

 

Deloitte's published study suggests that solutions to extreme cost-cutting measures that formerly provided the compelling reason to outsource may have given way to value-adding individuals who can be cherry-picked and contracted but charged at a project-based level for pre-determined periods. This supplements and enables UAE-based companies to not only create additional revenue streams within their businesses but to create a focus and the ability to apply 100% of their focus on core activities. Time spent ineffectively on non-core activities such as administration of personnel, document processing and back-end functions, act as a counterweight dragging on the heels of agile success.

Since Covid, UAE businesses have grasped the opportunity to re-focus on core activities, increasing their client base, revenue and profit margins. The V-shaped recovery has been a true UAE success story of resilience and the entrepreneurial spirit of its people, but these companies have carefully expanded, treading lightly to enact planned strategies whilst keeping a close eye on the surrounding business environment. The task at hand is balancing a strategy for business growth that retains flexibility, deploying a chameleon-like fabric that acclimatizes throughout uncertainty. But what if there was a bi-product found amongst all these tactful movements, let's say a new market was discovered whereby service contracts or projects demanded faster turnaround times, sourcing of personnel and onboarding with defined SLAs to maximise their value from the end customer. Surely it would be considered mad if these companies had all those resources at their fingertips and the only remaining focus was work winning.

It's for the same reason that shipping aggregators offer such a valuable service; companies recognized that the time spent collating, warehousing and arranging multiple shipments would be much better handled by companies whose job it is, to do so. After all, they have the processes in place to ensure the fastest possible shipment cycle but also liaise with the necessary supply chain stakeholders throughout. It would be reasonable to assume a margin of error from a direct workforce performing such duties, but that mindset changes when the service is outsourced to an aggregator, an expectation of service quality is required and immediately the aggregator is held accountable to deliver.

"Companies are rapidly shifting their focus away from merely contracting out tasks. Instead, they are looking to work in partnership with specialist outsourcing providers to bridge the skills gap, streamline processes and maximize productivity. More importantly, businesses actively look towards outsourcing providers and shared services centers for ideation and innovation."

Ammar Al Malik Managing Director of Dubai Internet City and Dubai Outsource City

 

"Yet, in recent years, the OSS industry and its drivers have considerably grown as organizations are now looking towards OSS to achieve a multitude of strategic objectives beyond just cost. While cost indeed remains a key driver, the ability for organizations to keep up and stay relevant in the modern age of disruption has become equally critical. Organizations recognizing this are now also investing in OSS to multiply performance (speed, quality), reduce capability as well as capacity gaps, increase agility, access intellectual capital, reach new markets and accelerate innovation across their business from back-office support to front-office product and service delivery"

Deloitte: Outsourcing and Shared Services 2019-2023 Global, Middle East and UAE Industry Outlook

 

TASC Outsourcing provides a full end-to-end human capital extension of your business that can facilitate the shift in focus back to 100% core activities. The strategic and competitive advantages cited above can be availed immediately with access to technology and operational muscle that handles processes on mass, day in and day out.

"Moreover, the scope of outsourcing and offshoring has evolved from labour to value arbitrage, which has become a core competence for outsourcing service providers. They can help in reimagining the customer journey across the front, middle and back-office operations to optimize onshore and offshore resources, bring in proprietary tools and build better technology stacks."

KPMG: The move towards outsourcing and offshoring – the challenges and opportunities - UAE Banking perspectives - Evolving infrastructure capabilities

 

Furthermore, with access to a database of more than 800,000 verified CVs the concern raised by CEOs in PWC's 'The talent challenge: Adapting to growth', is somewhat mitigated; "63% said availability of skills was a serious concern, an increase of 5% on 2013."

 

TASC Outsourcing enables its customers to maximise their full potential, and create time for the region's HR Departments, who are challenged to innovate with creative talent retention plans and offer career development, learning and growth; often an impossible undertaking when overloaded with administrative tasks. This is a major consideration and testament to the outstanding customer satisfaction (NPS) that TASC prides itself upon in the local market. Ultimately TASC aims to support its customers and become…

"the best in the world at finding and managing the right talent with certainty faster,"

 Mahesh Shahdadpuri, CEO & Founder of TASC Outsourcing.

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