The Business Transformation Outsourcing – BizSolv Solutions were developed to complement the emerging business outsourcing practices of most multinational/ transnational companies’. Specifically, in their use of external service providers; e.g. Third Party Logistics (3PL) companies, manpower agency or contract management-labor providers; to do particular non-core business related activities; whether partially or integrated.
In particular, the services currently being outsourced are through manual labor service agreement (e.g. packing/ re-packing, picking, segregation, production or warehouse labor intensive activities, etc); bundled services in specialized supply chain management activities (trucking-warehousing-distribution-inventory planning, toll manufacturing), and other company activities that are externally engaged to or provided by independent experts/ entities (HR/Payroll Services, Accounting, Information Technology, Call Center Operation, etc.).
Most multinational/ transnational companies engage/outsource independent service providers for these activities, to reduce headcount and avoid hiring contractual employees with a six month employment agreement &/or project based employment agreement. This practice is done to prevent/ avoid potential employer-employee labor relations issues; minimize their HR search-recruitment-hiring-training expenses; and to improve labor productivity - by removing the contract based employee replacement cycle.
To date, there are many existing service agreements and providers operating under the above concepts – but most are partial service providers specializing in some portions of the business, and are limited within the employer-employee or contractual employment relationship or process outsource service provider arrangement.
However, a new and emerging concept to provide manpower service needs has evolved - based on a “Cooperative Setup”. This was successfully applied by “cooperative based service provider agreements” for many large enterprises.
Specifically, this new concept adopts the use or creation of Manpower Pooling Cooperatives formed to service the specific needs/activities of the Client. The process requires the pooling of manpower; which may come from the original set of employees/ contractual employees currently performing the specific activities; or from newly hired recruits. They are then transplanted or recruited to become members of the “Cooperative – Assigned to Independently Provide the Specific Service Needs for the Client Company”. Consequently, the business activity and the laborers/ employees are declared redundant (may be paid severance as incentive to transfer), and are eventually transferred to the cooperative as members. The service activity then becomes completely outsourced to the cooperative and/ or its members. The cooperative members continue to provide the same labor activity or more activities as a service - with more benefits received in the form of dividends & patronage fees.
This cooperative concept is successful because it removes the six-month contract limitation that may result into labor issues (employer-employee relationship for the client company).
Furthermore, a more peaceful client-labor relationship results because the cooperative members cannot strike against their own cooperative; being co-members/ co-owners.
Labor costs and its maintenance are also minimized because the employee recruitment-replacement cycle-training cycle & related HR expenses are avoided. Plus, labor productivity automatically increases due to continuity of skills development as the member can continue to provide the same service beyond the original 6-month replacement cycle limitation.
Increased productivity also results among the active members - because of patronage fees and dividends. These are derived from the cooperative’s surplus income that are eventually divided and shared to the active members according to the actual individual’s labor productivity contribution for servicing the client or for equity invested to the cooperative. These are eventually paid at the end of the fiscal/ calendar year. Also, cooperative members can increase their income opportunity by having access to equity for personal investments - through the cooperative feature of offering savings & loan facilities to its members.
Added flexibility is also made possible for the clients under a cooperative set-up, because of the ease in replacing non-performing laborers and immediate access to additional manpower to handle peak volume periods due to the cooperative’s manpower pool set-up.
BizSolv Solutions beyond the Business Process Outsourcing-Cooperative Setup
The Business Transformation Outsourcing Solutions of BizSolv Asia aims to change the dynamics and set-up of the current manpower pooling/ labor contracting strategy for the client (multinational/ transnational) companies, the labor force, the service provider and the scope of services. Specifically;
1. Expand the current limitation and scope of the process outsourcing activities offered by the existing manpower pooling/ service providers – by offering a Total Business Transformation Outsourcing Solutions. BizSolv can identify, develop and offer a complete menu of corporate business activities that can be outsourced with its corresponding service solutions, manpower resource, compensation/ incentives, skills, productivity methods and overall administration system at more cost effective rates. The specific features of BizSolv solutions are:
- Customized design of a “WIN-WIN” Business Transformation Model that details the benefits of the BizSolv Outsourcing Solutions for the Client Management and Cooperative Member-labor service provider; in terms of overall productivity and costs.
- Provide to the client a Comprehensive Organization Design/ Reengineering/ Change Management Services to determine the end-state of the client’s final organization setup.
- Project Management of the Detailed Steps in Setting up the Cooperative Based Service Activities Identified and its actual operationalization/ implementation.
- Actual transition, recruitment, set-up, and operations management; for any or all non-core business activities, functions or process identified for outsourcing – for both staff and management levels.
- Acquire and provide the technology, expertise, systems, and other resources to fully operate and offer a Total Business Transformation Outsourcing Solution.
- Development of a tailor fitted management services to take-over all other functions or business processes (in any non-core functions identified e.g. warehouse, logistics, production, HR, Training, Accounting, I.T., etc.).
- Provide all other technical and consulting services for the client. These may include compensation/ incentive/ productivity programs development & monitoring; review of position description & qualifications; organization review & design; alignment/ development of HR & Administrative policies/ guidelines & procedures; labor relations strategy development; up to retirement/ redundancy/ separation program development.
- Provide and manage an efficient, productive and cost effective manpower pooling, labor contracting services or 3PL activities under a cooperative setup.
2. The BizSolv Cooperative Based Manpower Service shall also include processing of all payroll, compensation and administrative activities to individual cooperative members; e.g. SSS and other statutory benefits. Furthermore, savings and loans products will be made available for each active member.
3. Offer a continuous supply of highly productive & qualified labor force in its manpower pool for regular replacement, deployment, including peak period volume requirements allowing HR/ manpower flexibility.
4. Complementing long term-business strategy to create a more efficient and cost effective operations, leveraging on the partnership between the client (enterprise), the cooperative labor force and BizSolv combined. Such a model can then be re-applied to other business units, business processes and subsidiaries of the whole enterprise.