Outsourcing at Yarra Bank - Case Study Example

Outsourcing at Yarra Bank Name: Course: Institution Affiliation: Date: Outsourcing at Yarra Bank Introduction One of the core area of strategic management is the issue of Human resource planning whose aim is to ensure that there is effective management of human resources. In this regard, effective management of human resource would involve management ensuring that the quality and quantity of employees is well regulated at any given time. This also involves the company taking up strategic change decisions to ensure that they minimize costs without compromising on output, thus increasing the efficiency of the organization. In this case, Yarra Bank which is in a situation to cut costs and maximize efficiency should pursue a number of staffing strategies to ensure that they achieve this objective (Noe, 2006). Outsourcing at Yarra Bank Internal sources from Yarra Bank’s Managing Director, Kerry Brien indicates his belief that the best way to realize efficiency is through reducing the cost is through outsourcing employees. This sentiment has also been supported by various human resource experts. The experts have argued that outsourcing personnel comes with many cost benefits to the company, while improving the quality of output of the organization (Gary, 2004). The Bank’s CFO, Cecelia Vida agrees with the opinion that outsourcing is very beneficial to organizations which look forward to increasing their efficiency while minimizing their costs. However, she has put forth that Yarra Bank’s back office staff are somehow opposed to the issue of outsourcing and other fundamental managerial reform strategies. This is because they have served for a relatively long period of time and are used to tightly defined jobs, which are performed at a standard rate of payment and accompanied buy sufficient job security. This certainly would have an impact on how they would embrace change, and thus it would affect the success of change management in the human resource unit. The top management of the Bank has seen the need to increase flexibility of its HR operations and to reduce costs of maintaining staff. This comes as they acknowledge that they can be effective in reducing the costs if the staff working at the back office would get to be much more flexible. This is because such kind of staff cannot just be sacked based on the fact that they are not reformists, yet most of them have served for periods exceeding two decades. The argument of the management directors just like any other top manager emphasizes on the need to avoiding the company running bankrupt as compared to keeping a good image. This implies that much effort would be given to what the employees perform now as opposed to what they did in the past. This is because the Bank has to survive amidst the harsh economic climate that is subjected to it. The suggestion to improve staffing by unionizing the staff often also doesn’t work well since the Bank union Staff would not be pro-work restructuring that may lead them to loose most of the members. In addition, they also stand out to loose with regard to their incomes in the event that the restructures makes some people lose jobs. This would make them oppose the move to make staffing structures that may lead some members losing some jobs. The issue of increased competition in the Australian banking industry calls that Yarra Banks takes up strategic decisions that would make survive amidst the harsh economic time for the economy. Management feels the pressure of competition to be snapping their heels and the impact may be precarious to the future of its operations (Lado, 1994). Staffing strategies that Yarra Bank may adopt to reduce costs and increase Efficiency, and the implications of such strategies The idea to freeze all recruitment and introduce early retirement program may be able to work out for the Bank in reducing its staffing costs; however, it may come with other implications such as the company may be forced to use much costs to run this program and to offset the packages of early retirement. The fact that it is a onetime project, it may work well for Yarra Bank. Perhaps the strategy of early retirement packages for the employees who have served for long. This would be motivational for the workers who may prefer going home early with a good package, and also for the company which can they outsource staff to replace the outgoing ones. The second staffing strategy that Yarra Bank may take in reducing its costs and maximizing the efficiency of its operations is through embracing the use of more part-time and casual staff who are much more flexible in terms of their service and input into the Bank’s human capital demands. This strategy may work well for the Bank for they take up more part time staff to replace those who retire. This strategy is much more gradual and thus much friendlier for the nature of staff that exist in Yarra Bank. The strategy is also good because it has minimal risks both to the Bank and to the new staff who will be employed on part-time basis. In addition, employing staff on part-time basis would not only add flexibility but also minimize the costs of keeping staff at the time when they are not needed. Third, the Bank may also increase productivity of the Bank’s staff as a way of maximizing its efficiency. This strategy may involve the Bank making strides to grasp the competitive Australian banking market. This can involve employing newer technologies that would require less personnel. The Bank may take on the strategy to reduce staffing costs by investing more in technology that would reduce the Bank’s demand for human capital. This would be a very effective strategy that Yarra Bank may take on since it may significantly reduce the costs that would be demanded by the Bank’s staff. The challenge with this kind of strategy is that it may require a huge initial capital investment. However, this cost may not be comparable to the benefits that it would bring in the long run for the bank. This is because the capital investment in form of purchase of new equipments that would require less personnel input are fixed assets for the bank; implying that in the long run, the Bank would be able to realize reduced costs on staffing, thus improving the Banks net profits. The next staffing strategy that Bank may employ is to adjust the job design of its employees. In this regard the Bank may also be able restructure the working structures of the company. This may include restructuring their pattern of work. The restructures may involve integrating some of the positions of the staff, as well as scrapping off the work portfolio’s that may not be necessary. It may also involve setting up new work structures that are less demanding with regard to the human capital required to perform the. This strategy may be very appropriate for Yarra Bank, since Bank’s have corresponding tasks that often require team work and collective support. The essence of the restructures would be to come up with an improved job structures that would improve staff performance, as well as reduce the costs of having a larger volume of human resources. Lastly, the Bank may reduce costs and increase the efficiency of work by increasing the integration of its functions. This is to minimize the logistical costs that may be otherwise be lost through the loopholes in the management processes. Integration of the different areas of the Bank processes would significantly reduce the costs of managing the operations which would have otherwise been spent on the independent processes. Whatever the strategy that the Bank feels is appropriate, it is important for management to consider other risk-cost factors, and the short term benefits verses the long term benefits that would accrue as a result of taking such decisions (Kleiman, 2000). ARTICLE BERES, GLEN A (2011). ‘Blessing in Disguise’, Vol. 142 Issue 5, p188-192, 5pgs. The article addresses the issues of the 2008-2009 recession and the impacts that these had on the jewelers businesses in the United States. It specifically addresses how Long’s Jeweler, Ltd., had to downsize its staff so as to survive in the harsh economic period. This article advances further that human resource management functions success lies within the constraints of human resource planning sector. They have put forth the case study of Long’s Jeweler, Ltd which has had a challenge with regard to managing its change management regarding the need to downsize the number of staff that it currently has. The article has raised concerns that the process of downsizing is quite laborious and may cost the company heavy losses if it is not done appropriately. The high risk by which company Long’s Jeweler, Ltd has had to face as a result of its decision to downside its staff has caused the company to undertake the process in stages. The company was compelled to undertake the process department-wise to avoid the risk of losing workers at the same time. All in all, the article acknowledges that downsizing a risky strategic decision that companies may be called to do. This may be necessitated by factors such as economic challenges, change in technology that may require new skills, and the changes in job design that may require new skills and knowledge. Conclusion All in all, human resource management remains to be the engine of many organizations in today’s business where human capital plays a big role in promoting business. Yarra Bank in its pursuit to reduce costs and maximize efficiency of its operations may require that the Banks takes on one of the suggested strategies. The mentioned strategies may be necessary for the Bank for its own survival, as well as for the future success of its operations. References Beres, Glen A (2011). ‘Blessing in Disguise’, Vol. 142 Issue 5, p188-192, 5p Gary, D. (2004). Human Resource Managemen. New Jersey: Pearson/Prentice-Hall. Kleiman, L. (2000). Human Resource Management: A Managerial Tool for Competitive Advantage. Cincinnati: South-Western College Publishing. Lado, A. (1994). "Human Resource Systems and Sustained Competitive Advantage: A Competency-Based Perspective." Academy of Management Review 19, no. 4 (1994): 699–727. Noe, R. (2006). et al. Human Resource Management: Gaining a Competitive Advantage. Boston: McGraw-Hill. Read More