Thursday, October 30, 2008

Outsourcing popular trend in Thailand

Survey finds use of temps increasing

With an increasingly competitive global market, employers in Thailand are determined to keep both headcount and overheads below current levels by relying more on external resources to relieve skills shortages, according to the consulting firm Prasena.

The company recently conducted an in-depth survey of 49 leading companies that employ 35,000 staff in 11 major sectors in Thailand.

The results show that employers are using more temporary and/or seasonal staff - including freelance consultants and experts - paid daily or even hourly rates. These outsourced resources may not always be cheaper but can be replaced or eliminated at will.

Overall, 88% of participating companies have resorted to external resources over the last 12 months, in numbers that increased their workforces by an average of 36%. However, beyond these short-term measures, employers continue to entrust long-term solutions to their internal experts or HR functions.

About 92% of companies, even small ones, now have a full-fledged HR function, usually reporting directly to the head of the organisation. HR heads are entrusted with a strategic level of responsibility and 71% are members of the executive committee.

Over the last few years, along with the widening of HR roles, companies have invested, sometimes significantly, in HR management methods, techniques and tools. But Prasena's survey showed that the evolution has mainly been neither smooth nor complete.

The survey found that in many firms, changes have been too fast for the HR team to upgrade its skills in time to adapt its functions. In some companies, the obligation to wait and then to implement plans from headquarters has also been a restrictive factor.

Prasena analysts said the most urgent needs were to upgrade HR teams through clarifying the way HR responsibilities are allocated, to professionally test each HR person's technical HR management skills, and to conduct professional training to bridge the gaps.

They suggested that external help should be secured to provide temporary support whenever required. HR budgets should also be reallocated, rather than increased, to focus on productivity and efficiency while reducing red tape and low added-value activities.

The survey also found that two Thai companies were among the top five of all participants, which demonstrated that HR excellence depends more on corporate culture and local leadership than on an organisation's size, country of origin, sector of activity or any other traditional indicator.

Bangkok International Trade and Exhibition Centre (Bitec), with 480 employees, was ranked the best equipped in performance management and had the highest overall ranking. The construction company Tipco Asphalt, with 550 employees, was among the top five for organisation and skills management.

Also on the top five list were DHL, a German courier company with 863 employees; SCG Dow, a chemical company with 500 employees; and BASF, a German chemical company employing 224.

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