When many companies begin hiring additional personnel they rarely put their advertisements in the newspaper. They also do not have the human resourced department call any of the people whose resumes they collected the last time they were hiring. They hire an agency to do it for them. Now while the human resources department may hold the final say, the agency is in charge of delivering qualified applicants.

This is called business process outsourcing(BPO). Essentially it is the process in which a company hires out the non core functions of its business to include recruiting. It is not uncommon to call an 800 number for a company and talk to someone from a call center in a different state. While outsourcing some functions of the company may seem appealing, there is another side to consider.

Risk to Employees

Outsourcing a function of the company generally includes issuing pink slips to those working in the home office and giving those jobs to someone else. There has to be a policy in place that allows people who have been let go a way to exit the building quickly and without creating unwanted disturbances.

Call center outsourcing also means that a whole new staff needs to be hired and trained to use the operating system. Then there are the problems of people coming in late or not at all. This is a huge factor when there are employees who work in call center type environments. These facilities are contingent on the people showing up on time for their shifts. When they fail to do so it leaves everyone else scrambling to cover the empty slots.

Technology Risk

Many times the company has to integrate the software with the provider of service. This can be tricky, especially when it comes to responding to customer or client inquiries. If a client calls and has trouble accessing the information they quickly is likely to hole up the business process further trying to get assistance. It is essential that the individual departments communicate with each other so that any problems can be handled quickly without losing future business from the client.

It’s also important that some transactions between the companies take place in the form of contracts and non disclosure forms. In some cases certain companies are privy to certain information that the rest of the world is not. Sometimes they deal with employee’s sensitive information. In either case the contracts and disclosure forms ensure that both sides understand the information that each will be dealing with and the laws protecting such information.

Process Risks

While this portion of the risks breaks down into several parts it really is the easiest to understand. Essentially if the process is failing in one aspect such as efficiency it’s more than likely failing in effectiveness as well. And that means it’s also failing in the qualitative risk, i.e. customer service.

The process risks are all dependent upon each other to ensure that the system works, with customer satisfaction being the most important. If customers receive poor or otherwise negligent service, they will take their business elsewhere. When that happens, the sales volume will plummet and then everyone will be looking for a new job. So it is essential that everyone involved in the process takes the same viewpoint that the customer is the highest priority, without which the business does not exist.

The news about BPO is not all bad as it does allow the company to focus on more important tasks. Outsourcing can be an effective way of obtaining the services the company needs without the burden of additional staff. However, it is extremely important that the risk involved in such a venture have been fully studied to minimize the chance of re-establishing the systems that were outsourced in the first place.