12 Trends Shaping the Outsourcing Market
Rather than just seeking the lowest prices, buyers are relying on more sophisticated techniques.
In January my IT Business Edge colleague Susan Hall wrote about companies' increasing employment of contract workers, sharing information from The Human Capital Institute, CareerBuilder and online marketplace oDesk, among others. It certainly looks like those sources were on to something.https://o1.qnsr.com/log/p.gif?;n=203;c=204663295;s=11915;x=7936;f=201904081034270;u=j;z=TIMESTAMP;a=20410779;e=i
InformationWeek's 2011 Outsourcing Survey found an across-the-board increase in respondents' use of external service providers and their intent to outsource even more activities. In particular, writes Michael Healey in a commentary on the survey, companies are using more "gig" contractors, temporary workers who perform key tasks on a long-term basis.
A whopping 72 percent of the respondents use gig workers, with 45 percent saying it's a new approach for their companies. So now giant service providers like IBM and HP find themselves "competing more against nimbler, hungrier startups and pros working through individual marketplaces, at least for project work," says Healey, the president of Yeoman Technology Group.
The practice has some downsides, writes Healey, noting that contractors demand the kind of individualized management attention not given to big service providers. He suggests getting human resources involved, so they can lend their expertise with tracking, performance evaluations and monitoring. Fortunately, new labor management applications geared toward temporary work forces are starting to emerge. IT Business Edge contributor Mike Vizard in February wrote about one from a company called Work Market.
HR can also lend legal advice when dealing with the sometimes fuzzy distinction between contractors and staff, writes Healey. That's important thanks to the Internal Revenue Service's increasingly vigorous pursuit of companies that misclassify workers, a subject IT Business Edge contributor Don Tennant wrote about a few months ago. A rise in unemployment claims got the IRS' attention, said Tennant:
It seems there are a lot of unemployed IT workers who had been classified as independent contractors and who didn't realize that they're not entitled to unemployment benefits. So when they apply for those benefits, their companies get an unpleasant phone call from the tax collector.