As businesses look to optimize their operations, leveraging business process outsourcing (BPO) can be a game-changer. However, enhancing BPO performance without slipping into co-employment territory can be tricky. Here are some strategies to achieve this balance effectively:
1. Well-Defined Contracts
Specify Roles and Responsibilities: Delineate the roles and responsibilities of each party in your contracts with BPO providers. Steer clear of language that implies shared employment or suggests your company has direct control over BPO employees’ work or operational decisions, particularly regarding directing employee or employment decisions.
Set Performance Metrics and KPIs: Incorporate specific performance metrics and key performance indicators (KPIs) in the contract. However, even if you set targets, make it clear in the contract that the scorecard and targets may change as business needs dictate.
Setting clear expectations offers a basis for assessing the BPO provider’s performance. It also allows you to ensure the focus is on continuous improvement over time, as most BPO contracts are based on years, not months.
2. Robust Vendor Management
Dedicated Outsourced Services Management Team: Establish a team to manage your BPO provider’s relationship. This team should focus on overseeing performance and compliance without directly managing the BPO employees at any level.
Regular Performance Reviews: Hold regular performance reviews to ensure the BPO provider meets your standards and addresses any issues promptly. Remember, you are holding them to contractual performance and not deciding what to do or not to do.
3. Effective Communication
Structured Governance and Communication: Set up a structured governance model and clear communication channels for regular interaction between your team and the BPO provider. This can include scheduled meetings, monthly business reviews (MBRs), quarterly business reviews (QBRs) or any performance update deemed necessary by both parties.
Clear Escalation Path: Define a clear path for escalating and resolving issues. This helps address problems efficiently without implying direct control over BPO employees.
4. Training and Development
Client-Specific Training: Provide training materials and resources tailored to your company’s processes and standards. This ensures that BPO employees are well-prepared for the training you have provided. It’s tempting to allow BPOs to tell you they can create all the training needed, but it’s much better not to fall into a trap whereby the business’s training needs are unmet.
Knowledge Transfer Sessions: Conduct sessions to transfer knowledge and share best practices. This enhances the BPO provider’s understanding of your business requirements. This can also be a good practice when you have multiple BPOs to share the best practices that ensure your customers receive consistent service.
5. Technology and Tools
Implement Collaboration Tools: Utilize collaboration tools to facilitate seamless communication and reporting. This allows your team to monitor progress and provide feedback without direct oversight of BPO employees.
Ensure Data Security and Compliance: Ensure your technology infrastructure supports data security and compliance requirements. This helps protect sensitive information and reduces co-employment risks.
6. Maintain Clear Boundaries
Avoid Direct Supervision: Do not directly supervise BPO employees or get involved in their day-to-day tasks. Maintain a clear distinction between your company’s management and the BPO’s internal management structure.
Independent Decision-Making: Ensure the BPO provider retains control over hiring, firing and managing its employees. This helps maintain the provider’s status as an independent contractor and minimizes co-employment risks.
7. Legal and Compliance Measures
Regular Legal Reviews: Conduct regular reviews of your contractual agreements and engagement practices with legal counsel. This ensures compliance with labor laws and regulations.
Stay Informed: Keep updated with changes in labor laws and regulations that may impact your outsourcing arrangements. Adapt your practices as needed to remain compliant.
Conclusion
Enhancing BPO performance while avoiding co-employment risks involves a mix of well-defined contracts, effective vendor management, structured communication, targeted training, and strict adherence to legal and compliance standards.
Maintaining clear boundaries and fostering a collaborative partnership can improve BPO performance without compromising your company’s legal standing.
Judi Bolden, Vice President at COPC Inc., brings over 30 years of expertise in performance improvement, operational management, and change management. At Groupon, she led significant enhancements in global support and vendor operations, boosting customer satisfaction and operational efficiency.
Judi is a sought-after speaker with an MBA from Houston Baptist University and a Lean Six Sigma Master Black Belt. Her leadership spans 36 countries, where she’s renowned for her practical solutions to enhancing contact center operations and training.