1. Contemporary Practices in the Outsourcing Industry Wale Adediran - B.Sc, M.Sc, MCIPM HR Director, FMN (Flour Mills of Nigeria Group) A Paper Presented at the National Workshop on “HARNESSING THE BENEFITS OF OUTSOURCING THROUGH ENHANCED REGULATORY ENVIRONMENT” 16 th June 2015

2. Scope Review the state of outsourcing practices in Nigeria Examine the successes and challenges in current practices Recommend interventions to ensure outsourcing delivers the desired benefits

3. What is Outsourcing? Outsourcing occurs anytime one enterprise makes a contract with another to perform a process that is normally done internally by the first enterprise -National Outsourcing Policy and Institutional Framework for Nigeria (January 2007) Transfer of work, responsibility and decision rights to an external subject matter expert entity -Human Resource Management Practices in Private Cleaning Service Outsourcing Organizations in Lagos State, Nigeria (James Olalekan Akinbode et al; International Journal of Basic and Applied Science, Vol. 02, No. 02, October 2013, pp. 266-275) Management strategy by which an organization delegates major, non-core functions to specialized and efficient service providers

4. Back office: admin (security, janitorial, medical, catering, clerical, secretariat, driving, cleaning, laundry, fumigation etc.); payroll; accounting; finance; tax preparation; internal auditing; processing of documents, transcripts, applications, or claims; data storage Front office: marketing & customer service through call centres, email, websites Operation departments: procurement, inventory and supply chain Management Special projects: transition to new software, application service provision, internet service provision. Outsourcing Opportunity Areas

5. Outsourcing Desired Impacts Improve the overall competitiveness of products / services. Achieve better time to market Minimize risks with control on seasonality Access the latest technology with comparatively cheaper rate Improve return on product development investment Enable focus on core activities Access to professionalism, cutting edge expertise and tools

6. Successes Admin services successfully outsourced – e.g. janitorial and security, cleaning and fumigation, catering, medical, laundry, driving etc. Payroll services partly/fully outsourced in many organizations Parts of manufacturing operations – processes requiring low skill, with very little prospect of career advancement also outsourced in many organizations IT infrastructure maintenance services outsourced too

7. Challenges Stakeholders’ alignment Poor professionalism of some service providers Inadequate funding by some service users Insufficient regulation Abuse of outsourcing by some stakeholders

8. Challenges Stakeholders’ alignment Poor professionalism of some service providers Inadequate funding by some service users Insufficient regulation Abuse of outsourcing by some stakeholders

10. Outsourcing is modern day slavery in workplace -Labour Unions There is nothing bad in outsourcing of staff as long as all the parties respect agreements signed…. a prospective job seeker, who must have signed the term of employment, has no cause to complain -Former Minister of Labour and Productivity, Chief Emeka Wogu In a country where government has woefully failed to generate employment for its teeming youths, terms and conditions of outsourcing firms will always be in favour of multinationals and banks. A situation where a graduate employed as a teller in a bank earns N40,000 monthly will only encourage bank fraud, which is said to be on the increase these days - Thisday Newspaper (28 th July, 2013)

11. Challenges Stakeholders’ alignment Poor professionalism of some service providers Inadequate funding by some service users Insufficient regulation Abuse of outsourcing by some stakeholders

12. Human Resource Management Practices in Private Cleaning Service Outsourcing Organizations in Lagos State, Nigeria (James Olalekan Akinbode et al; International Journal of Basic and Applied Science, Vol. 02, No. 02, October 2013, pp. 266-275)

13. Challenges Stakeholders’ alignment Poor professionalism of some service providers Inadequate funding by some service users Insufficient regulation Abuse of outsourcing by some stakeholders

14. Human Resource Management Practices in Private Cleaning Service Outsourcing Organizations in Lagos State, Nigeria (James Olalekan Akinbode et al; International Journal of Basic and Applied Science, Vol. 02, No. 02, October 2013, pp. 266-275)

15. Challenges Stakeholders’ alignment Poor professionalism of some service providers Inadequate funding by some service users Insufficient regulation Abuse of outsourcing by some stakeholders

16. Vulnerable Job Seekers Abused

17. Challenges Stakeholders’ alignment Poor professionalism of some service providers Inadequate funding by some service users Insufficient regulation Abuse of outsourcing by some stakeholders

18. Forms of Abuse of “Outsourcing” Co-employment Cost cutting without value add Casualization of labour Body shop practice

19. Recommendations Government should enhance regulatory framework to curb abuses of outsourcing by stakeholders Government regulation should evolve an effective wage regulatory mechanism akin to mainstream trade unions’ collective bargaining process Public-private partnership should be explored to develop mass transportation infrastructure to connect satellite communities outside of cities to cities. This will enable low income workers to live in less expensive housing and commute daily to cities (like Lagos)

20. Conclusion On-shore outsourcing had been partially implemented in both public and private sectors since 2007 when the National Outsourcing Policy and Institutional Framework of Nigeria was introduced Effective regulatory framework must be effectively implemented to protect the vulnerable stakeholders and drastically reduce abuse of outsourcing practices Funding and infrastructural gaps must be addressed, possibly with public-private partnership

21. Thanks for your attention