Consulting giant to shift most executive assistant positions overseas
KPMG Australia is moving to outsource 200 roles to the Philippines as part of a cost-cutting measure, according to reports, adding the company to the growing list of firms that are outsourcing amid challenging economic conditions.
The major consulting firm plans to outsource 200 out of 260 executive assistant roles, the Australian Financial Review (AFR) reported.
Under the plan, the first 100 EAs will depart by April, followed by another 100 in May. The firm seeks to retain 65 support staff, with state leaders to retain the executive support.
Employees were informed of the outsourcing plan on Tuesday, the AFR reported. It remains subject to consultation with all affected staff.
The cuts represent two per cent of KPMG Australia's almost 9,000-strong workforce and are expected to save the organisation about $17 million in annual wage costs, according to the report.
Why are firms outsourcing roles?
KPMG's move shows the consistent rise of companies opting to outsource roles to cut costs.
KDCI Outsourcing, an outsourcing firm in the Philippines, noted that Australia's outsourcing market has experienced "steady momentum over the past decade."
"Companies across Australia are increasingly leveraging both offshoring and nearshoring to support functions such as customer experience, IT, finance, engineering, and shared services," it said in a blog post in January.
"From finance and healthcare to real estate, technology, creative, and retail sectors, outsourcing now plays a strategic role in scaling teams, filling skill gaps, and supporting rapid innovation across core and non-core business functions."
The situation in Australia is reflected overseas. Data cited by DemandSage revealed that 92% of G2000 companies have active IT outsourcing contracts.
Approximately 300,000 jobs are outsourced from the United States, contributing to a global outsourcing market valued at around $85.6 billion.
Aside from cost-cutting, there are other reasons why companies are outsourcing roles, according to the Corporate Finance Institute. They include:
- Focusing more on the company's core competencies, and thus improving its competitive advantages by outsourcing time-consuming processes to external companies
- Freeing up internal resources and using the resources for other purposes
- Mitigating risk by sharing risks with external parties and building meaningful partnerships
- Improving flexibility and efficiency by delegating responsibilities that are difficult to manage and control to external companies
Planning effective outsourcing initiatives
For organisations planning to outsource roles, Jennifer Dublino, an expert on business operations, outlined five steps where employers can start:
- Decide which tasks to outsource.
- Write the outsourced function's job or project description.
- Assess your outsourcing candidates.
- Manage and communicate with your outsourced resource.
- Track your outsourcing partner's tasks and expenses.
To ensure effective outsourcing, Dublino also urged employers to set clear efficiency goals and choose the right outsourcing partner.
It is also essential that employers prepare staff, workflows, and the company structure for the upcoming change.
"Outsourcing is a big decision and an endeavour you must approach with careful consideration and planning. However, in the end, many companies find the results 100% worth it," Dublino said in an article for business.com.
