Client Name

SHAFFER & Co.

Faculty Advisor

Ms. Madeeha Omer Lakhani

SBS Thought Leadership Areas

Investment Decision Making

SBS Thought Leadership Area Justification

As SHAFFER is considering outsourcing employees of two divisions, it is both a capital and strategic investment. It is a capital investment because SHAFFER will utilize the third party's services in exchange for financial charges and it is a strategic investment because of spent resources and potential risk benefit trade-off associated with outsourcing. For example, outsourcing will not only have an impact on financial costs for SHAFFER but also its employee morale, brand reputation and growth.

Aligned SDGs

GOAL 8: Decent Work and Economic Growth

Aligned SDGs Justification

Our project align with SDG-8 Decent Work and Economic Growth because of our project's focus on ethical outsourcing that enhances SHAFFER's internal capabilities, allowing it to expand its market share in the apparel industry without damaging its employee's personal and professional integrity. For example, we have recommended SHAFFER to negotiate outsourced workers' wages with the HR vendor beforehand to curb job insecurities and financial distress of outsourced employees.

NDA

No

Abstract

SHAFFER & Co., a premium menswear brand operating 10 stores throughout Pakistan, consists broadly of three departments; management, operations and retail. SHAFFER’s management is considering outsourcing employees in the operations and retail divisions. The purpose to shift from in-house payroll employees to outsourced employees is due to resource constraints and management’s focus on its strategic goals to increase retail presence by four times. Prior to formulating the project, internal research had begun and SHAFFER had proposals from two HR vendors, HRSG and PrimeHR. The objectives of our ELP was to determine the feasibility and operational impact of outsourcing employees in both departments and if they align with SHAFFER’s strategic goals. Moreover, we were tasked to do a comparative analysis of SHAFFER’s current in-house model and outsourcing model, and recommend which HR vendor SHAFFER should partner with. Our resign design consisted of three phases. We conducted secondary research on outsourcing theoretical frameworks, employee perceptions relating to outsourcing and operational impact. Our secondary research was a crucial stage in our research to determine functions within SHAFFER with outsourcing potential and selecting an ideal third party vendor. We paired our secondary research with case studies relating outsourcing strategies adopted by big players in the Pakistani apparel industry. We observed a bias towards research on traditional outsource to low-cost country models, rather than specific employee outsourcing. However, studies on employee outsourcing extended similar principles to research its operational impact. Lastly, we conducted interviews with HR professionals to gather industry insights. We interviewed firms, both availing and avoiding outsourcing services to acquire objective insights on the subject matter. We used these insights to devise a comprehensive hybrid strategy for SHAFFER, going beyond outsourcing, that aligned with its strategic goals to expand, keeping in mind core issues such as talent shortages and resource constraints. This strategy not only focuses on core knowledge retention while outsourcing non-core functions to capitalize on cost efficiencies and preserve SHAFFER’s innovative spirit, but also to enhance SHAFFER’s internal capabilities through skill and leadership development.

Document Type

Restricted Access

Document Name for Citation

Experiential Learning Project

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