| SLIDE | Script to Accompany Slide |
| Slide 1 | At the beginning of the XXI century, there was a quantitative increase and a qualitative complication of managing economic systems. The attention to the problems related to the study of the personnel potential of the organization, the formation of personnel, and the creation of effective management systems increased. That process launched because the economy of America began to undergo severe qualitative changes. When the global pandemic hit the economy, GDP growth has slowed down significantly. Elements of stagnation have emerged, especially the issues of increasing efficiency and minimizing management costs have become relevant. One of the promising areas of reducing the costs of organizations can and should be personnel outsourcing. In this regard, the direction of services is personnel outsourcing of the hotel hospitality, payroll, and recruitment for the Jacksonville University Inn hotel. Outsourcing is the transfer of any areas that are not related to the main activity of the organization. Part of the functions can be transferred to some third-party organization to ensure the optimization of the organization’s spending. Outsourcing can also be aimed at accumulating efforts at work on the primary type of the company’s activity. |
| Slide 2 | The company will operate mainly based on a long-term contract; the interaction conditions will be implemented over a long period. This will ensure the client against any unforeseen circumstances of the outsourcing company that may arise during the contract term (Hannagan, 2001). A higher level of education of employees will bring additional income to the consumer. All employees of the company have up-to-date knowledge, skills, and abilities. The company’s human capital regularly takes advanced training courses, develops skills to work with new technologies. A high level of business culture determines the authority of the enterprise and contributes to an increase in the number of transactions with employees hired as part of outsourcing. This component acts as a guarantee of consistently high-quality work of the company. The company’s international certification confirms the compliance of the services provided with the requirements of international standards. They include a group of standards that are being developed for outsourcing activities. A wide range of specialists in the team allows to implement the services offered efficiently. The division of responsibilities among employees for outsourcing hospitality, payroll, and recruiting will allow to perform each task carefully. |
| Slide 3 | Due to the high demand for outsourcing in Jacksonville, the price of services can be pretty high. This is due to the quality of the workforce in the company, determined by a high level of education and professional skills. Since the demand for outsourcing services is more significant than its supply, the price of labor is increased. In addition, a large amount of work performed (namely, outsourcing hospitality, payroll, and recruiting) is worth an additional fee. Due to the high qualification, the task will be completed more quickly. Therefore, a high-quality result in a short time should be paid accordingly. High positions in the rating of outsourcing companies and quality assurance make the investment of a large money amount conditional. Due to the need to constantly maintain and improve the professional skills of employees and pay for their work, the cost of outsourcing services will be pretty high. High fixed costs will be associated with the salaries of administrative and managerial personnel and the costs of banking and accounting services, audit, and legal advice. Variable costs will be the highest, namely, the prices of improving the skills of employees. The personnel training will be conducted in educational institutions with state accreditation or foreign companies with the appropriate status. For this reason, the costs of continuing education of employees will be pretty high. |
| Slide 4 | At this stage, there is no outsourcing monopoly, which occupies a privileged position; this may become one of the goals of the company’s development. Due to the technological features of the provision of services and the exclusivity of the personnel base, one can strive to occupy this position. This will be objectively beneficial from the standpoint of public interests since it will meet significant aggregate demand for services at minimal costs. The market analysis revealed that the entrance for new outsourcing companies is open. There is ample space for expanding activity both deep into and into the breadth of the market. It is possible to segment existing outsourcing markets to capture new groups of consumers. It is also not challenging to diversify production by offering new services related to the main profile of the enterprise. The US government assists small and medium-sized outsourcing businesses through a variety of regional and federal programs. Huge funds are allocated to help the outsourcing business within the US federal economic development program framework. Money from the state budget is distributed on a competitive basis to the states to pay subsidies provided for by regional programs. Participation in state programs will allow to support the outsourcing business at all stages of its development. |
| Slide 5 | The coronavirus pandemic has had a powerful impact on the economies of specific countries and the entire world community. The effect of the coronavirus on the US outsourcing industry has manifested itself with different severity of consequences in other states, including affecting Jacksonville. The decline in demand from entrepreneurs for the services under consideration has become a factor in slowing down their development; the company may noticeably feel negative processes in demand (Hannagan, 2001). Since there are many enterprises on the market, it has inherent sharp competition. Even though intense competition makes it easy to enter the market, it creates high fixed costs. The Jacksonville area has an average level of income and services and a heightened entrepreneurial activity. Therefore, the competition in the outsourcing market in the studied region can be described as a medium. One of the acute problems in the outsourcing market is the provision of low-quality services by unscrupulous providers. The result is that the company does not achieve the stated outcomes. This may be due to the desire to save money and influence the processes for which the provider does not have enough competencies. Due to the vast number of providers delivering low-quality services, customer confidence in new companies is reduced. |
| Slide 6 | When analyzing the customer base, it was possible to segment individual categories according to shared characteristics — customers’ place of residence carried out geographical segmentation. A group of people living in the same city (Jacksonville) was identified. In the process of demographic segmentation, those aged 30 to 50 years who are in the status of hotel managers were identified. At the same time, gender, nationality, or religion do not matter. The primary method of segmentation was socio-economic: it was possible to divide clients by income (average and above average), education (higher), type of activity (hotel manager). Psychographic segmentation, which occurs depending on clients’ lifestyle and personal characteristics, did not play an important role. For outsourcing, the external appearance of the hotel, the interior style, and other factors are not critical (Hannagan, 2001). Segmentation by the solvency of client companies was also necessary; for representatives of small and medium-sized businesses, outsourcing is a real opportunity to get high-quality services at an affordable price. Therefore, they will become the main segment of consumers of the services offered. The larger the company, the more noticeable the nuances of outsourcing; therefore, large companies will not use its services. |
| Slide 7 | Since the services provided are outsourcing hospitality, payroll and recruiting, and the company is based in Jacksonville, a segment of hotel managers has been allocated to whom services will be provided. The target clients who need assistance are the hotel business in the plans (startups), the operating hotel business without an accountant, or with a retired HR specialist. The remaining segments are not of interest for services since they do not have outsourcing needs (Patel et al., 2005). These are hotels that have an accountant or HR on staff, which suits the manager. As clients, hotels on self-management can be considered; firstly, the owner receives a high income, and secondly, they seek to avoid possible high risks by contacting an outsourcing company. Hotels that have transferred management functions to a professional management company can also be considered a target audience. During the analysis, it was decided to provide services to clients with medium or high incomes. The most common middle-income hotel companies are university inns with low pay per stay. They predominate in the selected geographical area (Jacksonville), so such inns become the target audience of an outsourcing company. |
| Slide 8 | The product provided is a service for involving outside specialists in the company’s work to perform any non-core functions. The tasks performed by the company include accounting, recruitment of personnel, salary calculation, and operations with taxation. The company organizes continuous accounting and generates reports at regular intervals. After the hotel’s registration, the company receives the legal documentation and draws up local regulations that will regulate the accounting. It develops an accounting policy, forms of primary documentation and approves a plan of working accounts. In addition, the outsourcing company provides services for the search and selection of personnel, forming the personnel policy of the hotel. The list of services includes the management of recruitment, training, evaluation, and remuneration of personnel. Methods, procedures, and programs for organizing these processes are constantly being improved, which allows to provide high-quality services. The outsourcing company also regulates and adjusts the method of calculating payments to hired employees according to the employment contract terms. It estimates the necessary withholding of taxes and contributions, taking into account deductions provided for by US law, and also documents these operations. The outsourcing company will also conduct tax operations; specialists will calculate the hotel’s income tax by determining the tax rate for the tax period. They will also define the procedure for setting income and expenses. |
| Slide 9 | The economic effect of outsourcing consists solely of reducing costs compared to the costs of performing the process on their own, with the same quality of project implementation. The pricing model assumes that the price of the outsourcer’s services will have to be calculated, taking into account the outsourcer’s costs for providing the service and the markup. The margin will be set independently based on negotiations with the hotel manager. It will compromise the desire to get the maximum profit and the need to remain competitive (Hannagan, 2001). The proposed pricing model will correspond to the pricing method based on consumer value. The service fee will equal the maximum amount of money in which the consumer evaluates the utility received from this product. Thus, the markup value should be set at the highest possible level, corresponding to the minimum value of savings from outsourcing that is acceptable to the customer. The essence of this approach is not only to maximize the benefits of the outsourcer. It also allows to find such a distribution of benefits from outsourcing cooperation. The share of each participant is proportional to its contribution to the formation of this benefit. This approach to determining the price is called the partner pricing model. |
| Slide 10 | The promotion of an outsourcing company will be carried out by creating and strengthening a personal brand. With the help of personal PR, the company will regularly demonstrate a high level of expertise and reliability. The company’s head will need to publish periodically in local media and act as a speaker at specialized events. In addition, they can promote the brand under the guise of entertainment content: publish posts on Instagram, shoot videos with free tips for YouTube, write books. They can also participate in competitions and awards, expert councils, and working groups. All these actions will give results and bring customers, and they are essential in the long term. These measures will help to attract top customers and employees, increase the average check, and interest investors, and allow growth and development. Cross-marketing and cooperation with companies from other areas with which the target audience coincides can also be used. In the long term, it is possible not to be limited only to Jacksonville but to expand the sphere of influence and enter the outsourcing market of other states. |
| Slide 11 | Regional outsourcing in Jacksonville is rather poorly developed, although the potential for this business area is enormous, especially in the hotel sector. The geographical location of this region has a certain kind of activity that is more effective to conduct there. The analysis of the regional markets showed that the few positions regarding outsourcing defined in the concept at the federal level were in demand in several US subjects. Limited resources and the need to direct significant financial assets to brand management create a division of production and promotion of services. The appearance of an outsourcing company-specialists on the market will lead to the fact that auxiliary functions will be outsourced. This is because outsourcing services will cost less than supporting similar processes inside the inns in Jacksonville. The use of contract production in Jacksonville will be built on a mutually beneficial basis for its participants: the provider and the customer. The customer can entirely focus on the provision of services and have a steady demand. |
| Slide 12 | The positioning of the service will take place in three basic variations: as a strategy, concept, and a set of practical measures such as outsourcing hospitality, payroll and recruiting. Within the framework of this interpretation of positioning, its connection with market segmentation, identification of the target audience, and differentiation, for example, a differentiated offer, is most clearly traced. At the same time, a set of marketing tools will be used, which will allow to formulate and demonstrate advantages, which will make it possible to compete successfully. An essential part of the image is the context of long-term systematic relationships associated with the transfer of business functions and business processes to an outsourcing organization. The company should be related to the client by optimizing and providing practical business activities of persistent organizational advantages (Hannagan, 2001). Maximum efficiency in attracting the selected segment of customers will be achieved with the clever use of the diligent work of sellers and various marketing tools. The company will have a website and a catalog of services with a price list. Website traffic will be increased due to its technical condition, SEO, and regular publication of helpful content. |
| Slide 13 | The price will be differentiated depending on the quality and value. Consumer characteristics include their integral properties of services, the comparative assessment of which is the level of quality. Therefore, the work should be carried out in such areas as quality management and price management. The segmentation of the consumer took place using regional, socio – and natural-geographical characteristics of the territories. According to them consumers are divided into groups of districts, and zones. As a result, the buyer’s market was defined as Jacksonville, where there is already a demand and a need for outsourcing. The services provided are the best at a price for quality; a high-quality service that meets the most stringent requirements will be offered at an affordable price for the client. It will be formed from the cost of the staff’s work spent, the associated costs of selling it, and the individually negotiated markup. The service will fully comply with the stated characteristics and have a long-term effect, so the profit received by the client will exceed the costs. |
| Slide 14 | The use of outsourcing hospitality, payroll and recruiting will allow to reduce costs and abandon non-targeted processes legally. Outsourcing for accounting and tax calculation will have a long-term benefit for small organizations and sole proprietors. There will be no need to look for an experienced specialist, build up accounting, and invest money in software. At the same time, the business receives better services for less money than the salary of a full-time accountant (“How to calculate customer lifetime value,” n.d.). HR outsourcing will significantly reduce the cost of finding and registering employees. At the same time, the long-term benefit will be to save on insurance premiums that the outsourcer company will pay. The company can entirely focus on the main activity and transfer auxiliary functions to the side. Outsourcing specialists have a high level of qualification because they constantly take special courses. The service customer can seriously save on the selection and training of personnel, and they will not have to worry about replacing employees during illness or vacation. Also, part of the responsibility is transferred to a third-party company and is fixed in the contract; to protect the business, managers outsource accounting. For example, the commitment of accounting outsourcing to the client will be insured: if the company receives a fine, the outsourcing will pay for it. |
| Slide 15 | The outsourcing market is growing and becoming more and more attractive to the consumer in the face of organizations. The competitive struggle pushes the performers of outsourcing contracts to develop and offer highly specialized projects. This allows outsourcers to maintain competitive advantages and will lead to active market segmentation. A common mistake in outsourcing is the lack of an alternative approach to determining the cost of the related project. A competitive environment is necessary for the development of outsourcing; monopolism has a detrimental effect on the use of it. When evaluating the effectiveness of a project, it is essential to be guided not only by the number of employees released, that is, by savings on wages. Currently, outsourcing projects are usually based on strategic decisions and the desire of the customer’s company to direct the available resources to develop its main activities and competitive advantages. The very idea of outsourcing should come from and be supported by the company’s management. The course of its development and implementation should be included in the daily interests of senior managers. The assessment of the effectiveness of outsourcing should be based on the level of achievement of the strategic goals and objectives of the organization. |
References
Hannagan, T. (2001). Mastering strategic management. Retrieved from Trident University.
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How to calculate customer lifetime value. (Year n.d.). Marketing Mo.
Patel, C., Budhwar, P., Witzemann, A., & Katou, A. (2019).
HR outsourcing: The impact on HR’s strategic role and remaining in-house
HR function. Journal of Business Research, 103, 397-406. Retrieved from Elsevier.