Following the lead of international companies operating in Cambodia, some local businesses are willing to standardise and leverage their operation costs, by thinking about manpower outsourcing from professional firms
Many manufacturing and construction companies are using manpower outsourcing from individual agencies, however the concept of outsourcing is still not broadly understood in Cambodia. This may be because companies have not used professional manpower outsourcing services which have enabled them to save costs, or deal with high staff turnover or labour law.
Concept of Manpower Outsourcing
There are different kinds of outsourcing structures. Normally, outsourcing means subcontracting a third party company for the completion of a task or an assigned project. Manpower outsourcing is also required when a firm needs manpower to complete a routine task or administration works permanently in which they do not want to face a high staff turnover issue. In outsourcing, an external firm or company is responsible for legal compliance and administration work of staff employment or even carries on management or development of a product or on behalf of another firm based on each agreement among both parties.
The main concept started when companies were reluctant to hire new employees for short-term jobs or to face staff replacement. Hiring new employees or staff replacements means more work for HR people. Manpower outsourcing solves this problem, as in this case the primary company does not hire the worker directly. The external firms who supply the skilled or unskilled workers are called manpower-outsourcing firms/agency. In Cambodia now, lack of skilled workers, unclear/time-consuming administrative compliance labor law process, and high staff turnover is another scenario when manpower outsourcing is required. Many manufacturing firms and service providing firms at times, are faced with seeking employees or processing replacements for some positions which they might not, otherwise, have in their resource pool or need to burden due to administration paper work or law compliance.
Manpower Outsourcing Procedure
Once a company decides upon outsourcing, they should look for several appropriate suppliers and ask for Request for Proposals (RFP). Sometimes proposals from multiple vendors are requested. In RFP, vendors cover the process that they will follow to complete the project, current financial position of the company, technical ability of its employees, and all the information, which can help win over the confidence of the company. Then the company negotiates with companies and decides on their “best and final offer”. Both the parties finalise the contract and sign it.
- Outsourcing is required for carrying out a project and responsible for staff performance management or development of a product on behalf of client. This step is the transition of knowledge and information from the source company to the company providing manpower. The delivery schedule is decided for the delivery of the product. Once the project is finished, the source company can decide to terminate the contract or may renew the contract.
- If outsourcing is only required to be responsible for legal compliance and administration work of staff employment, then the process of transferring staff from client to supplier by terminating contract between primary company and staff, and changing to be a sub-contract staff by suppliers bearing risks as employers while performance management is under primary company.
Eventually, responsibilities or liabilities of supplier for clients can be different based on agreement made by both parties. So you should contact outsourcing firm if you need further information related to outsourcing procedure to tailor the service to meet your requirements.
Some of the benefits of outsourcing are listed below:
1- First and by far the most important aspect is cost reduction of development of overall project.
2- Hiring manpower from an outsource company who has good and knowledgeable skilled professionals in the field, can improve quality of the product.
3- Lowering pressure on HR department of hiring and maintaining skilled professionals.
4- Reducing risks of law compliance and Reducing the burden of administration or paper work
5- Companies can put more emphasis on their core business.
6- Gaining competitive advantage and step ahead in terms of law compliance.
Aplus Consulting Co., Ltd
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