Аутсорсинг бизнес-процессов: инструменты оптимизации и развития. Юрий Ефросинин. Kelly Services

18-20 October Frankfurt, Germany

All illusive: Outsourcing vs Outstaffing in Russia

Yury Efrosinin

Director of Kelly Outsourcing and Consulting Group Russia

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Outstaffing is widely used across all

industries since last century

Market is stable and players are known

Decision to oustaff is part of strategy, by

HR Dept

Outstaffing service becomes commoditized Customers learn how to assess costs

Lack of strategic approach on top

management level

Outsourcing market has potential for

growth

Outsourcing has limited number of

segments

OUTSOURCING VS OUTSTAFFING YESTERDAY



-3,8 % latest forecast 2015

Economic outlook – Russia economy trends

Massive ruble volatility and slumping oil

prices downgraded economic estimates for

2015 and 2016, instable Ruble rate (from 36

up to 66 RUR per USD) can cause decrease

of stabilization fund.

Inflation in 2015 forecasted at 15% (World

Bank, May)

Consumer activity will be hit by negative real

wages and consumer spending will be down.

Elevated interest rates currently at 11%

(Central Bank rate) and therefore tight

financing in rubles and FX

The economic outlook for Russia in 2015 is poor and a small recovery will only occur in 2016

8,2 8,5

5,2

-7,8

4,54,3

3,41,8

0,4

-3,8

0,5

-14

-12

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

14

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

ИнвестицииКонечное потреблениеИзменение запасовЧистый экспортВВП

InvestmentsFinal consumptionChanges in inventoriesNet exportGDP

GDP growth input

FACTOR #1: RUSSIA ECONOMY TRENDS



Data from Federal Service of State Statistics

Labor force

Ministry of economy estimate

for 2014 - 2015: 434 000

people

Demographic curve

Skills shortage

High number of working places

Generation “Y” approach at work

Unemployment dynamic in Russia

FACTOR #2: LABOR MARKET TRENDS



Prohibits the use of contingent labor:

• evade providing workers with appropriate payments

and guarantees

• escape paying insurance contributions

• during strikes and at reduced working hours

• for carrying out works of 3.3, 3.4, 4 hazard class

It prohibits сIt authorizes

Permits to lease workers through accredited Private

Employment Agencies:

• During temporary increase of the production (up to 9 months)

• To replace temporary absent members of staff

• To provide employment for full-time students, single parents

or parents with a large number of children

• ! The approval of the relevant local union if the number of

workers exceeds 10 %

FACTOR #3: NEW TEMPORARY STAFFING LAW

EFFECTIVE JANUARY 2016



Prohibits the use of contingent labor:

• evade providing workers with appropriate payments

and guarantees

• escape paying insurance contributions

• during strikes and at reduced working hours

• for carrying out works of 3.3, 3.4, 4 hazard class

It prohibits сIt authorizes

Permits to lease workers through accredited Private

Employment Agencies:

• During temporary increase of the production (up to 9 months)

• To replace temporary absent members of staff

• To provide employment for full-time students, single parents

or parents with a large number of children

• ! The approval of the relevant local union if the number of

workers exceeds 10 %

FACTOR #3: NEW TEMPORARY STAFFING LAW

EFFECTIVE JANUARY 2016



OUTSOURCING VS OUTSTAFFING TODAY



Time - AUGUST 2015

Number of participants – 98

COMPANY

NUMBER OF EMPLOYEES

35%

65%

Russian company

Multi-National

46%

18%

36%Up to 500

500 - 1000

1000 - 2000

INDUSTRIES

All illusive: Survey Results

4% 5%7%

18%

28%

38%

0%

5%

10%

15%

20%

25%

30%

35%

40%



Do you know about new Temporary Labor Law?

61% ˃˃

36% ˃˃

3% ˃˃

I know about the Law,

but am not aware on

details

I know the Law in

general

I don’t know

anything about

the Law




Что знают?

What will be restricted by new Law? Will the new Law influence your business?

51% Yes, negatively

27% No

14% Not sure yet

8% Yes, positively


10%

10%

24%

57%

0% 10% 20% 30% 40% 50% 60%

Outsourcing services

Other

Providers of outstaffing

Outstaffing services



Does your company plan to transfer employees from outstaffing to outsourcing programs?

?

Does your company plan to transfer employees from outstaffing into company books?


59% - No,

we don’t

11% - Yes, we

do

19% - Yes, we do, but the

decision is not taken yet11% - Don’t know

35% - No, we don’t 27% - Yes, we do 24% - Don’t know yet14% - Yes, but the

decision is not taken yet



Do you plan to use outsourcing?


15%

23%

31%

31%

0% 10% 20% 30% 40%

Yes, but the decisionwas taken yet

Don't know yet

No, we don't

Yes, we plan already in2015



What is main limitation to use outsourcing?


5%

22%

23%

24%

26%

0% 5% 10% 15% 20% 25% 30%

We don't have experienceto use outsourcing

We don't have needs touse external provider

Other

Lack of reliable provideron the market

Lack of strategic decision



16

78 8

3

8

25

15

10

0

5

10

15

20

25

30What business functions your company use/plans outsourcing?




ФЗ-116

Solutions

Solutions in 2016 год

Temporary Staff with 9

month contract (FL-116)Business Process

Administration

Business Process

Outsourcing

Model «Service

Hours»Standard

pricing model

Model «Service Hours

+ SLA (KPI)»

OR OR



OUTSOURCING VS OUTSTAFFING TOMORROW

Most of Oustaffing contracts will be transferred to Outsourcing increasing the

market

Challenge for Customers will be to pick “real” outsourcing Provider

Challenge for Providers will be to deliver customized cost-effective solutions

Skill shortage will prioritize investment into human resources rather than into

technology

