T he outsourcing industry has come under intense scrutiny in recent times with many associating it with anti labour practices. In this interview, Mr. Alex Okoh, Chairman of Resources Intermediaries, an outsourcing company established ten years ago,  attributed much of the challenges of the industry to misconception and  lack of regulation to drive professionalism, adding that outsourcing is still a viable business in spite of macroeconomic challenges.

Excerpts

By Babajide Komolafe

What was the outsourcing industry like when you started 10 years ago and what it is today?

Ten years ago the outsourcing industry was essentially unstructured. It wasn’t professionalised in terms of the service offering and the way that the services were offered. It was a developing industry at that time. So we thought that there was a huge opportunity in that space given the unstructured nature of the business and the opportunity that we saw in bringing the requisite level of professionalism and structure into that business.

Mr. Alex Okoh

And over the years, that is essentially what we have tried to do. We have tried to bring structure, order, professionalism and also in terms of the service offerings to able to tailor it to the needs of the clients in the market. So 10 years post, we have been able to move the industry forward and set the standard basically to redefine what it takes to offer professional outsourcing in that space.

Is outsourcing  a profitable business considering the challenge in the economy?

I won’t use the word profitable because every business is set up to make a profit. But I think that it is extremely viable. In fact, it is even more viable now than ever before. Outsourcing, at least the way we practice it, offers a win-win proposition for our clients. And if you look at the cost structure of any business, personnel cost usually is a key component of the operating cost of most businesses.

Now, when you have a downturn, typically the first sufferers in a situation like that are personnel. This is because you want to cut cost by laying off staff because you see a downturn in the economy. But if you were subscribing to outsourcing model, that challenge will not be critical for the business organisation. This is because in the first place, the personnel would have been managed by an outsourcing partner in the first place and the critical cost that hit your bottom line would have been moved to an outsourcing vendor who helps to manage all of the personnel cost that usually becomes a challenge for businesses in a downturn environment.

Now, when you look at even the personnel cost that we are talking about, there is a stated cost on the book and there is also the unstated cost that the personnel incur for the business, which is over payroll. But if you adopt an outsourcing model, all of that is left for your vendor to manage as they relate to the personnel that is under their management. So, it is a more cost effective way of managing your personal input into your business. So, both in boom and bust, it helps to manage your personal cost more effectively, more efficiently.

What policy recommendations will you make to government to enhance the industry and your operation?

I think that we need to bring some order, structure and government regulation into how outsourcing is practiced. At least to take out the charlatans and those who are taking advantage of the market. So I think that by stronger regulation by government would be helpful to this industry. So, we want to be able to set the standard for those who can practice outsourcing and perhaps push that process to lead to some licensing framework.

Outsourcing is generally perceived as contract labour or casualisation. What is the difference?

Outsourcing is not contract staffing and it is not casualisation, if it is practiced the way we do and in a professional sense of it. Why? That is because these staff that are deployed to the third party clients are actually the staff of the outsourcing partners. So, at Resource Intermediaries, the personnel under management are actual staff of Resource Intermediaries, enjoying all of the benefits that regular staff would be enjoying.

What is just different is that their places of redeployment where they render the services are not within the office of Resource Intermediaries. So these staff are ours, they are employed by Resource Intermediaries, they have the term of engagement defined by Resource Intermediaries and then deployed to our clients to render those services for the client. So, they are not causal staff, they are not contract staff and as far as we are concerned, they are staff of our company and then those staff are now deployed to the services they render to the clients.

So, is not casualisation. However, the concern you expressed is valid because that was what pervaded in the industry pre our entrance and that created a negative image for outsourcing firms. So we are not contract staff provider, we are an outsourcing company providing services and personnel to clients relative to their needs. Contract staffing means that you do not have fixed terms of engagement, you can lay off tomorrow, you can be laid off in six weeks. So there is really nothing fixed in the terms of engagement and benefits.

Contract staff typically do not have a pension scheme; they do not have a health scheme, so there are various benefits that a regular staff would enjoy in a regular engagement. However, if RIL were to engage that service on an outsource basis, the staff that will be coming to serve you will be permanent staff of RIL enjoying the full benefits of pension, medical or whatever it is from us. However, what you pay for those services to us is fixed.