Blending captive and outsourcing models – the best of both worlds
In today’s fast changing and demanding marketplace, staffing firms are forced to gain their competitiveness by decreasing costs and increasing the quality of their service.
In order to survive and be successful many businesses have found establishing their own captive center as a good solution due to the benefits it offers.
These captive centers, also known as a captive model, is a strategic choice to set up a wholly owned subsidiary, typically in a lower-cost country. It is a model of offshoring that provides services to the parent company at lower costs, allows access to specific skilled talent with innovative ideas and releases internal resources for other purposes.
Setting up operations in an overseas location certainly isn’t without its challenges and a great deal of initial investment. There is a need for investing a lot of time to building the infrastructure needed, plus for handling the unfamiliar culture and foreign accounting, legal, regulatory, operational, political and business process practices. Attracting the best local talent, training them, ensuring they’re engaged and productive, as well as trying to stem the tide of staff absenteeism and attrition, all have to be dealt with. Plus, after all this effort you still have no guarantees of success.
However, as a result of globalization and technology advances, these cross-border operations are utilized by staffing firms who look for business expansion and who believe a captive center offers them a greater amount of control and therefore ultimately eliminates the risks associated with working with a third-party offshore recruitment services (ORS) partner.
However, the fact is that building a captive center involves its own set of risks and may not have advantages over the third-party ORS provider model.
Like any business there are times when the captive center will struggle to meet peak demands and will miss covering all day-to-day jobs. Or at the other end of the spectrum you have the quieter periods where the captive center isn’t running at full capacity and you are effectively wasting money on a resource you are not utilising.
It’s a constant dilemma; do you expand and run the risk of increased overheads and reduced profit margins? Plus, if you do expand will your losses be magnified when times are quieter, and even more people are underutilised?
Thankfully there is a solution. One that takes captive offshoring to the next level and offers greater flexibility, scalability and focus.
IMS People serves over 150 Leading Staffing Companies with 12 years of experience in the recruitment industry
At IMS People we offer a mixed sourcing strategy that we are finding is becoming increasingly popular as it offers the best of both worlds by blending a captive and third-party ORS sourcing model.
Our clients enjoy the benefits of having their own captive center, but also gain the flexibility to ramp up their operation up and down to suit their business needs. Plus, it’s a solution that ensures no increased infrastructure costs and allows access to the right skilled people quickly to fill in any gaps, at any time.
Our blended clients retain their own overseas team but gain our 750 employees and their years of international and staffing industry expertise and who share their dedication to excellence. Our ORS teams operate for them 24/7 to deliver an exceptional service for their business and offer new ideas and help to generate short-term and long-term solutions of the highest quality.
In fact, it is the perfect solution.