Labor Outsourcing, Memo of Transmittal, Essay Example

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This is to inform you that these are the findings of the labor problem facing the company. The report gives in detail the current recruiting, hiring and training position of the company, notes the challenge in it, and gives the conclusions and recommendations for the said problem. It is important to know that the said problem is greatly affecting the company in terms of costs and thus profits. In order to cut the company’s expenditure it is essential to turn to the labor outsourcing.

I would like also like to give credit to the rest of the team; Richard Baker, Ted Goodman, and Moses McKinney for their contribution in the research and the compilation of this report.

Executive Summary

The company has in the past experienced challenges when it comes to the human resources department. It has no experience in that area and has often found it quite hard to hire skilled and experienced work force. The essence of this report is to illustrate these problems and craft viable solutions to overcome these situations. It is therefore necessary to hire a human resources outsourcing firm to facilitate the recruitment, hiring and training of the company’s employees.

Introduction

The purpose of this report is to address the labor issues challenge facing the company and outline the solutions to the same. Research within the company has proved that there is need to bring in labor outsourcing firm so as to cut the huge expenses the company is currently facing, and thus increase the profits. In today’s world of cut-throat competition among firms, the most important tool for success is to have a cost-leadership advantage.

Labor Outsourcing

Since the company was founded 5 years ago, it has greatly spent much on employees in terms of employee salaries and wages, insurances, medical covers and so on. This has led to the re-thinking of ways to cut these costs to maximize efficiency and profits of the company.

From my research, it is usually very expensive for the company to recruit, hire, and train its employees. This increases the costs of the company by a large margin. To cut these costs, it is necessary to hire a labor outsourcing company to cater for the labor needs of the company. Not only does it reduce the expenditure but the country also benefits in the terms of macro-economic aspects. When we outsource labor, we get a better control over quality since only the best outsourcing firm is granted the bid. There are also the benefits of having deferred payments.

Companies have resolved to this type of outsourcing and have greatly cut their costs tremendously. This shows that if the company does the same, it is also most likely to benefit a lot. This reduces the company costs and thus increases the profits. Having a human resources outsourcing company reduces the costs to the company in that there are no insurance costs for the company as the outsourcing company provides the employees with the same.

Conclusions and Recommendations

In outsourcing labor, fixed costs are converted into variable costs. Capital is also released for investment in other areas of the company. It also cuts large expenditure during the company’s early stages of operations. This makes potential investors to be attracted by the company, since capital is directed into the revenue-producing channels.

The company should thus hire an outsourcing firm. This should be advertised in the newspapers and media houses to ensure that the bids are fair to all prospective outsourcing companies. The management should ensure that only the best firm providing the service gets the bid.

References

Anonymous (2007). How Do I Outsource Labor to Control Costs? Retrieved January 15, 2010 from http://www.allbusiness.com/human-resources/workforce-management-hiring-recruiting/3904360-1.html

Hartman C. (2003). Outsourcing Labor Offshore. Retrieved January 15, 2010 from http://www.htrends.com/trends-detail-sid-8156.html

Mike (2009). Advantages and disadvantages of outsourcing. Retrieved January 15, 2010 from http://www.ls-marketing.com/business/tips/advantages_and_disadvantages_of_outsourcing/

Theodore F. di Stefan, (2006). Why Money Chases Cheap Labor – The Outsourcing Phenomenon. Retrieved Jan 15 2010 from http://www.crmbuyer.com/story/48622.html