The introduction of the new licensing decree in 2010 for manpower outsourcing services by the Ministry of Human Resources and Emiratization, was an important milestone in the manpower outsourcing history in the UAE which was aimed at making a clear distinction between companies that can outsource manpower and those that cannot. This was a departure from the previous practice where companies under the context of Consultancy Services, Annual Maintenance Contracts, and Managed Service were providing their manpower to customers for short-term and long-term deployment. Today there are over 100+ service providers to choose from in the UAE and this leaves HR or Contracts Managers with a dilemma on which service provider should they sign up to outsource and what are the important parameters that they must consider to make outsourcing successful. In this write-up, the focus shall be the white collared outsourcing and the following are some of the parameters to prequalify a suitable manpower outsourcing partner.
1. Compliance:
The most important criteria is the correct license. The service provider's license activity must clearly define the labor-regulated terms, the absence of which both the firm availing the service and the service provider could be penalized.
2. Track record
while the length of time is not necessarily the best yardstick it does provide a list of clientele whom they can go to. A customer base of well-known brands will go a long way in ensuring that the company has a good track record and credibility in white collared outsourcing.
3. Outsourcing framework
Fixed margin or percentage of the salaries or mark-up based. Fixed margin is a monthly fixed fee, with all other directly attributable costs back charged. This model offers more transparency on the costs but the customer will need to go through all the supporting documents and bills on a monthly basis. Whereas a markup-based fee structure covers all the statutory payouts, visa costs, provisions for sick leave, insurance, and risk associated are taken up by the service provider, which will be slightly expensive.
4. Payment terms:
Funding is an important element in the outsourcing industry, as in any other. Some customers agree to fund the salaries ahead of the payroll and obtain a discount, while post-payment attracts a small premium. The most important element is the ability to pay salaries on time to the employees through the Wage Payment System.
5. Insurance options:
This is an important variable cost. Most outsourcing providers have a basket of insurance policies and coverage to meet the varied requirements of the customer from a basic coverage, to mid-level, and premium insurance to suit the employee levels.
6. HR Culture of the Manpower Outsourcing Partner
White-collared outsourcing needs to ensure that the employees are provided with a service commensurate with their grades and social status. It is important that the service provider has a strong HR culture, team, and infrastructure to ensure this.
7. Transparency and ethics:
Companies with a strong professional and ethical culture are a must to ensure that the employees are not short-changed at any point in time with a commitment to meet the contractual tripartite agreements, that are in place between the company, service provider, and the outsourced employees.
8. Strong contracts:
A comprehensive and well-defined contract protects all parties, as it is important that the service provider or the customer has a well-drafted agreement that covers all aspects of the outsourcing service to ensure that the deliverables and performance are as per the agreed terms both in letter and spirit.
9. Recruitment service:
Most service providers provide recruitment as a value-added service for outsourcing for generic positions such as Admin and support staff. However, if they are difficult to locate scarce resources, then a recruitment fee might be added.
10. Resourcing:
The service providers with a good media outreach can resource better talent, including access to job boards, newspaper adverts, and a professional presence in Social media, which also demonstrates their transparency of business operations and outreach to customers and employees.
The above parameters are some of the basic parameters that organizations must consider while establishing partnerships with Outsourcing Companies.