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India:Textile firms seek outsourcing options in non-core jobs |
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2004-11-29
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With massive preparations afoot for the post-quota regime — to be in-place from January 1, ’05 — textile companies in the organised sector are increasingly opting for outsourcing of non-core activities relating to HR and finance.
Textile companies feel they will be able to focus on their core activity by outsourcing functions like promotions, payroll management, bonus, salary disbursement, provident fund, gratuity, recruitment, flexi-staffing and training to HR consultants.
Companies are also resorting to flexi-staffing to get around the country’s stringent labour laws. Flexi-staffing refers to manpower resource planning companies taking workers on their books. The workers are in turn utilised by the textile companies.
Top textile companies in India like Grasim Textile, Gokuldas Exports, KG Denim, Arvind Mills and Vardhman Spinning are weighing options to step up outsourcing.
Outsourcing of non-core activities in textile is currently negligible. However, experts are of the opinion that in less than two years it will contribute around 7-10% of the total turnover of the organised textile industry.
“The need for outsourcing non-core activities is increasing in the textile companies as they get ready for bigger orders in the post-quota regime. Also, with expansion and capacity addition, the companies need to achieve economies of scale through streamlining and trimming current activities,” said officials at Vardhman Spinning.
“Today we outsource routine HR activities including payroll management and flexi-staffing and outsourcing of certain finance-related deals could be possible in the near future,” Kiriti Sen, vice president, human resource, Grasim textile division, told ET.
The company also outsources a few core activities like yarn and a part of fabric production to dedicated manufacturing units.
“Flexi-staffing is an alternative to the stringent labour laws where-in HR companies hire workers and semi-skilled labourers and lease them for a fixed period of time to different companies,” said K Pandyarajan, MD, Mafoi, a Chennai-based HR company.
The company has around 10,000 workers on its payroll, of which almost 200 is outsourced to textile companies. “With the kind of enquiries from the textile companies we expect this number to go up to more than 1,000 by the end of this year,” Mr Pandyarajan added.
Companies like Mafoi, Team Lease and India Life Hewitt are actively looking at the textile sector as a possible source of outsourcing activities and have made dedicated teams to explore the opportunities in it. |
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| economictimes |
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