Why outsourcing is key to tackling unemployment – HR experts

Bisola David
Bisola David
Why outsourcing is key to tackling unemployment - HR experts

Human resource professionals have advocated for the use of outsourcing as a powerful technique for addressing the country’s unemployment issues.

In an exclusive interview with The Punch, the immediate past president of the Association for Outsourcing Professionals of Nigeria, Dr. Obiora Madu, stated that outsourcing would be helpful to the economy in the long run.

“In Nigeria, we are not seeing outsourcing the way it should be, because we are concentrating more on human capital, and human resource outsourcing, that is what a lot of people are doing,” he said.

He warned that job losses might result from how local outsourcing was being handled by businesses in the country.

According to Madu, there are numerous outsourcing initiatives in the areas of logistics, software, and IT services. He also mentioned that a Nigerian outsourcing firm now has 1,500 employees that work for overseas businesses.

“What matters is that there will be a bigger playing field if Nigeria becomes a destination for outsourcing,” according to Madu.

However, if global outsourcing businesses are established in Nigeria, many outsourcing jobs would be moved out to other countries, which will increase the creation of jobs. Subcontracting is opposed to outsourcing. They differ from one another.

He pointed out that businesses that outsource their human resources make sure that their employees get pensions and other legal benefits.

“It is a collaborative arrangement where you and the principal decide on the workers’ compensation up front in the context of true outsourcing. Your income is a management fee that is calculated as a proportion of the total worker payments,” he said.

He claimed that subcontracting frequently results in workers who are underpaid, which has a negative impact on both the quality of the business’s customer service and its overall performance.

In a similar vein, the Head of Human Resources at the Chartered Institute of Bankers of Nigeria, Tolu Adedayo, stated that there may be long-term employment implications for outsourcing in Nigeria.

According to him, “This means that outsourcing has both potentials, benefits, and hazards, but before making a decision in this regard, enterprises must take into account any potential consequences of outsourcing.”

“Outsourcing helps firms concentrate on their core strengths while outsourcing non-essential services to outside providers, increasing productivity and efficiency. Leveraging those providers’ resources and skills would be beneficial for the company.”

He claimed that outsourcing can help firms cut costs by removing the need to engage and train workers for non-core tasks. This is especially useful for Nigerian companies where labour expenses are rather high.

Adedayo pointed out that outsourcing improves access to talent and facilitates the availability of a larger pool of professionals both domestically and abroad.

He clarified that the workers must undergo a thorough background check, and the outsourcing corporations are responsible for any liabilities related to the workers.

He added that this might be an issue for Nigeria, especially given the country’s high unemployment rate, because outsourcing could result in job losses as businesses shift non-core services to outside providers.

“Some companies have created policies that have given experienced, qualified, and competent outsourced staff the opportunity to be absorbed or converted to full staff,” continued Adedayo. This will really help with demotivation.

Furthermore, a lecturer at Crawford University and an expert in labour relations and human resources, Dr. Justice Ngwama, claimed that outsourcing was crucial to the modern economy.

According to him, outsourcing was primarily done so that businesses could focus on their core skills.

He observed that outsourcing facilitated exploitation because outsourcing corporations typically pay whatever they want to workers in the form of salary and incentives.

He asserted that “they take advantage of the country’s current unemployment situation for this criminal treatment.”

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