Reversing ugly trend of outsourcing in Nigeria

Outsourcing, a word that came from the phrase outside resourcing, became a key part of international business economics in the 90s. Subcontracting is the practice of assigning or outsourcing specific parts of the obligations and tasks under a contract to another party known as a subcontractor. Outsourcing is prevalent in strong-matrix environments where complex project planning, execution and monitoring are norms.

Outsourcing, as against the popular ugly perception, is not done to swindle middle-level managers and entry-level employees. Companies primarily outsource to reduce outlying and non-core business expenses, including taxes, energy costs, and excessive government regulation. Maximizing the use of external resources, accessing world-class capabilities, optimum utilization of core staff for other functions, reducing and controlling cost of operation and maximizing efficiency for time-consuming activities are some of the other reasons companies outsource.

The enormous merits of outsourcing cannot be completely expounded here. In every attempt to explore reasons companies outsource, risk management comes to the fore. The probability of occurrence of identified and unidentified cost and schedule risks in tech projects especially, are always very high. Not even the most robust risk response strategy can guarantee zero risk occurrence and impact. Hence, the need will always arise to plan how to mitigate, transfer or completely avoid all risks when they occur.

N1trn debt: Reps query Acting NDDC MD, summon Alaibe, Ekere, others

Only risks resulting from natural disasters are either shared between the client and contractor or between the contractor and subcontractor in pre-defined percentiles, or owned entirely by the client with adequate fallback planned. Ownership and management of risks are not burdens any organization wants to bear. Hence, to shelve the rigor and cost of risk management activities, a large portion of the overall project work, especially at the execution phase, are contracted out.

The exponents of the concept of outsourcing did not intend it to make employees feel inadequate, though that is what is largely obtainable in Nigeria, especially within the telecoms sector where there seems to be no more dignity in being outsourced. An externally sourced employee works on a project managed by a client to his company. The employee is entitled to all benefits, major and fringes, that are available in his company (the outsource company). He has a parent company to return to on expiration of the client’s project. This is what professional outsourcing stipulates.

Sadly, in Nigeria today, the wanton rate of unemployment has been hijacked and outsourced staff are being widely mistreated. Companies now either establish outsource companies or contract them to recruit project team members on harsh terms. Outsource companies are made to abide by clients’ dictates, however unpopular and nonconforming they are to the tenets of the outsourcing practice. Low salaries, next to no pension remittances, unreasonable extension of work hours without pay, few leave days and zero leave allowances are a few of the harsh realities of outsourced staff in Nigeria.

If this trend is not quickly checked, more regulations will be slighted. The Nigerian Ministry of Labor and the Association of Outsourcing Professionals of Nigeria (AOPN) must begin to enforce strict compliance with existing labor laws. There must be heavy penal charges against organisations that run contrary to the laws guiding recruitment and management of human resources in Nigeria.

When outsourcing is practised within its tenets, the disparity between full-time staff and outsourced staff will be completely removed. In the end, companies will remain competitive and the Nigerian economy will stay afloat turbulence.

Segun Akande,

segunolaakande@gmail.com