The year 2020 has made human beings on this earth experience the worst time in the history. The entire globe is dramatically suffering from the COVID-19 pandemic situation. With so many lives being lost and so many people becoming homeless, this year has made people see the rudest side of the mother Earth. Besides, the pandemic situation has shattered economies of the whole world, closing businesses across the globes and making people jobless. The India sourcing companies have not been any different in this whole scenario.
The outsourcing companies are known to facilitate the business owners by providing in their respective niches. Outsourcing facilities are extensively utilized by the organizations to decrease their burden of manufacturing products so that they can focus on the other aspects of their business. Outsourcing services to foreign or local outsourcing companies looked upon as a positive approach as they not only help in reducing the burden but also make sure the products are manufactured in a cost-competitive way.
So, as you can sense that the profit margin of these outsourcing companies is highly dependent on proper functioning and maintenance of business at primary level. If, for some reasons, these primary businesses are not working well or their performance is disrupted, the outsourcing companies will have to some of the severe repercussions. And, this is exactly what COVID-19 is doing to the outsourcing companies right now. The pandemic outbreak is severely impacting the outsourcing companies.
Just like other businesses that are being affected by the COVID storm; outsourcing services are also not left behind. In fact, COVID-19 has had a significantly strong impact on the outsourcing companies. This context will shed light on some of the ways COVID-19 is having a bad impact on outsourcing services. Read on to know the ways in a comprehensive manner.
Strict Travel Restrictions
With the strict lockdown rules laid down across the globe, the logistics companies are mostly affected. The worldwide shutdown has caused the logistics companies to not work efficiently. The primary source of revenue for the India sourcing companies mainly came from the transportation of goods across the world. With increased severity of global conditions, the logistics are unable to perform their task in an orderly manner, thereby resulting in grave loss for such companies.
This has also caused a drastic hike in the transportation cost of goods because the profit scale of these businesses was mainly structured on the basis of economy scale. With lowered business activities, these organizations are forced to increase the price for continuation of their service.
Deficiency of Staff Members
Human resources is one such resource that has experienced the maximum deficiency during the lockdown period. People are not allowed to leave their homes unless and until they have to deal with extreme situations. Moreover, people do not want to go out of their houses due to the risk of spreading the disease or getting infected. Although some parts of the works can be done remotely, for example some companies are allowing their staff to work remotely but, in other cases, some employees are required to have their physical presence. IT companies are able to manage their tasks through video conferencing.
However, several logistics and textile sectors are suffering the most in outsourcing their requirements to the outsourcing organizations.
Absence of Adequate Infrastructure and Equipment
A majority of the outsourcing organizations considered the work from home concept for most of their employees thinking about the severity of the disease. But, outsourcing companies are mainly based on effective communications and requires their employees to maintain the communication in order to carry out the daily tasks. As employees could work while being at their own space, the main thing that suffered the most is the quality of work due to unsatisfactory work results from home arrangements. This, in turn, created quite a serious problem for carrying out the everyday operations of these companies.
No one was ready for this pandemic effect, and moreover, no one was aware of the severity of this pandemic situation. This is the main reason why the current system was not ready to adequately cater to the challenges.
Inconsistency at Work
The India sourcing organizations that carry out market surveys, requires the physical presence of their employees. This gives a sense of clarity to the people as the employees mainly fill the responses via natural response. Since most of the outsourcing companies have allowed their employees to work from home, the efficiency and quality of work have been severely affected due to absence of physical presence.
When employees carry out the market surveys, they are not able to fill it up in one go due to shortage of employees, and most importantly, they are not able to give natural response to the people (filling it up for the sake of it). Similarly, the telemarketing employees are also not able to get their clients on call as a majority of them are working remotely.
Increased Record of Order Cancellations
The major concerning factor for the outsourcing organizations is the increase in number of order cancellations they are receiving from their client companies. This is mainly because the primary businesses are closing their operations, thereby concerning the functions of outsourcing companies.
Several client companies are also facing a lot of problems like the outsourcing companies. The primary issues faced by the client companies are as follows:
- Drastic hike in the price of outsourcing services
- Work inconsistency resulting in decreased work quality
- No deadlines followed thereby resulting in delay of project completion
- Lack of communication between the outsourcing partners
Takeaway
Covid-19 is having a significant effect on the India sourcing organizations. Since these companies act as helping hands for some of the major corporates, inconsistency at the primary level can cause drastically affect the overall business world. Just like the logistics companies cannot perform efficiently with proper transportation, the outsourcing companies also cannot perform with proper communication among their employees. In a nutshell, it is really a hard time for companies to survive the pandemic shock. Therefore, everyone is expected to show patience to understand the critical scenario.