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Outsourcing may be a better solution than cutting jobs

As we enter into a new financial year, it is more than likely that 'cost cutting' will remain a buzz word for many businesses for the year ahead - indeed Alastair Darling has just warned us in his recent Budget speech that "the UK can't take [economic] growth for granted".

For HR professionals, staff cuts have been an all too familiar by-product of cost reductions for the past couple of years and will remain an inevitability for many businesses. But the key to making the right cuts is to consider: are there parts of the business that are ‘fat' rather than ‘muscle' and can any of these elements be better managed outside of the business?

The term ‘outsourcing' will hardly be new for HR professionals: there has been much discussion over several years about the virtues of outsourcing elements of the business either to lower cost locations or to an outsourcing vendor in the UK that can handle the work at a lower cost.  However, outsourcing should also be seen as an effective way of reducing the HR headache. By that I mean the outsourcing of certain non-core elements of the business can in turn relieve the burden for HR managers who often find that too much of their time is spent dealing with issues that are not part of the core business offering.

It is not cost-effective for HR management's time to be absorbed dealing with common issues that occur among lower-paid personnel, such as reception staff, like absence leave, retention and recruitment, or spending time ensuring temporary workers are correctly vetted. To illustrate, if the business is a firm of lawyers, accountants or architects, the HR management should be able to focus on their chief objective, which is attracting, retaining and managing the best talent in accountancy, the law and architecture, rather than managing front of house staff - this applies to any type of business.

Therefore, far from recommending that core elements of the business are outsourced - indeed we are starting to see a U-turn in the financial services profession as banks look to bring their telephone banking call centres back to the UK - it is outsourcing back office functions, the ‘fat' within an organisation, which frees the business up to tone its ‘muscle' so it can leap back into action as the upturn arrives. CallCare provides an outsourced switchboard function that is a service increasingly used by businesses either large enough to have a separate switchboard and front of house, or smaller organisations in need of an ‘overflow' system to decrease the number of calls missed because of lack of resource. In this climate a business cannot afford any call to be missed. Alternatively referred to as a ‘virtual' or ‘remote' reception or switchboard, our call centre is based in the UK so the service is as much about quality improvement as it is about financial savings. Handing this type of function over to an external provider puts the onus of improving the efficiency and quality of that function onto someone else's shoulders: someone that is an expert in that particular field. It also removes the burden of having to decrease and increase internal staff levels in rhythm with the business's performance - instead you can easily scale back or step up the arrangement that you have with the external provider.

What a business absolutely does not want to do is lose valuable assets when making cuts or changes to current systems. HR professionals must consider what forms the corporate memory, knowledge and experience that makes your company what it is. Should you decide to outsource or cut the wrong segments of an organisation you can find yourself in a position where this knowledge has been compromised and intellectual capital is lost.

For the foreseeable future it seems that cost-cutting for businesses will remain an inevitability, but where cuts are made, they should be constantly reviewed by senior HR professionals. A period of making cost savings is an excellent opportunity to take a good look at how human resource in the business is structured and whether alternatives to internal staff in the non-core functions would result in a leaner and more efficient organisation allowing HR management to focus on their main objective of recruiting and retaining key players who need to be poised to take advantage of any opportunities when the upturn arrives.

Rasik Kotecha is founder and director of CallCare