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Outsourcing refers to subcontracting a third party company in order to complete a task or a project. And manpower outsourcing is needed when a particular firm needs to complete a task in which they don’t want to hire new employees. Outsourcing proves to be one of the most efficient ways to save cost. Today, many information technology (IT) companies and call centers seek the help of outsourcing.

In broader sense, outsourcing involves a specific process, where an external firm or company take car of the management or development of a product on the part of another firm. The concept of manpower outsourcing developed when companies were reluctant to hire new employees for short-term jobs. Hiring new employees carries more work for HR people, security checks, and other overheads with them. Manpower outsourcing emerged as an answer to this problem. The external firms who supply the skilled workers are called manpower-outsourcing firms. Lack of skilled workers is also an another factor in the development of manpower outsourcing. However, there are also a number of disadvantages of such a process. Here are a few merits and demerits of manpower outsourcing:

Merits:

• The most important advantage of manpower outsourcing is cost reduction of development of overall project.
• Hiring skilled manpower from an outsource company can improve the quality of the product or service.
• Low amount of pressure on HR department of hiring, as well as maintaining professionals.
• Companies can put their valuable time on designing and research of a product, instead of putting effort on meeting deadlines.

Demerits:

• Manpower outsourcing can have great impact on the employees of the company. Because, many times, companies cut jobs in their companies and outsource the work to a third party.
• Many outsourcing companies are not able to meet the standards and deadlines.
• With, outsourcing, fraud and security prospects are always concerned. Because, there is always a chance of identity theft or misuse of sensitive information.