Rainmaker Staffing
Rainmaker Staffing assists clients throughout the United States and Canada in optimizing the performance of important, non-core, business functions. Our staffing division provides sales and marketing professionals (all levels), public relations personnel (all levels), business management (all levels including CEO/CFO/COO/CIO positions), applications management personnel and advisory services professionals.
The Outsourcing of Personnel provides five primary advantages:
§ Reduced Costs
§ Superior Competency
§ Asset Utilization
§ Economies of Scale
§ Business Risk Mitigation
At the most basic level, companies outsource to achieve Lower Factor Costs – essentially lower wages. As an example, many companies find that wages paid to in-house security guards are comparable to those of highly skilled factory laborers. By outsourcing security, the companies realign the wages with market pricing, consistent with the lower skill level required of a security guard. Similarly, automotive industry outsourcing initially focused on the wage-rate differential between the vehicle manufacturers and those paid by the supply base.
Over time, access to Superior Competency emerges as a motivator for outsourcing. Very often the service provider offers a degree of sophistication that in-house specialists cannot match. Essentially, why spend more to do it yourself, when you can spend less and get it done better?
Improving Asset Utilization provides a related but different motivation for outsourcing. Companies often have underutilized facilities and equipment. When a contract manufacturer takes over a plant in an outsourcing agreement, it can add volume from other customers to improve utilization and the resulting economics.
By concentrating in a single discipline, outsource service providers also can gain Economies of Scale, furthering the cost advantages they can offer original equipment manufacturers (OEMs). Scale economies result from larger facilities, broader and denser networks and even greater purchasing clout.
As an example, the largest third-party logistics providers (3PLs) have enough volume to support regional cross-docks in far more areas than does any individual customer alone. The broader network of cross-docks offers the opportunity to consolidate shipments more efficiently to reduce transportation costs.
The most advanced thinking about outsourcing addresses Business Risk Mitigation. Customers and suppliers can collaborate to reduce such business risks as inventory obsolescence and stock-outs related to volume fluctuations.
Over the coming years, new ways to share risks across the extended enterprise of customers and outsourcing partners will inevitably emerge to drive further strategic outsourcing.
Thoughtful, strategic consideration of outsourcing ultimately offers an opportunity. Think broadly about outsourcing motivations in your industry and apply disciplined analysis of the market and the economics. Understand the facts and your company will benefit from strategic operations outsourcing.
