Metal By Design Workplace Analysis

Confidential © New Frontier Operations Group D-‐MI-‐01 ACN: 163 959 797

Bruce Win Unit 83, 111 Leitchs Rd Brendale, QLD , 4500

June 16, 2015 Dear Bruce, Please find attached an introduction pack to the YSource Human Resource Independency Solution Model. This pack is an analysis of our business, the manufacturing industry and a preliminary analysis of your business. We have developed the YSource framework to achieve the separation and implement the delivery the full spectrum HR internal independency department, and assume corporate HR liability from a company. Kind Regards, Matthew Bennett Founder of YSource & New Frontier Operations Group P: 0478058068 E: [email protected] Skype: Bennetti321

2 METAL BY DESIGN PTY LTD ANALYSIS PRESENTATION


Metal By Design Pty Ltd Analysis Presentation Manufacturing Industry

YSource Introduction

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METAL BY DESIGN PTY LTD ANALYSIS PRESENTATION


Contents 1 YSOURCE SUMMARY 4 1.1 WHO IS YSOURCE? 4 1.2 OUR BUSINESS 5

2 COMPANY EXAMINATION SUMMARY 6 2.1 COMPANY BACKGROUND 6 2.1.1 COMPANY SUMMARISATION: 6

3 INDUSTRY BREAKDOWN 7 3.1 AUSTRALIAN GOVERNMENT, AGENCIES, UNIONS AND INDUSTRY PARTNERS 7 3.1.1 GOVERNMENT DEPARTMENTS 7 3.1.3 GOVERNMENT AGENCIES 8 3.1.4 AUSTRALIAN UNIONS 8 3.3 INTERNATIONAL ORGANISATION OF STANDARD (ISO) 9 3.3.1 CRITICAL ARCHITECTURE FOR PROJECTS & DOCUMENTATION 9 3.3.2 SPECIFICATIONS FOR INDUSTRY 9 3.3.3 ISO COLLECTIONS FOR INDUSTRY 9 3.4 INDUSTRY HUMAN RESOURCE MANAGEMENT SPENDING 10 3.4.1 PER HIRE HR SPENDING 10 3.4.2 ADDITIONAL HR SPENDING 11 3.5 LEGAL RISKS REQUIREMENTS AND OBLIGATIONS 12 3.5.1 BREACH OF WARRANTY 12 3.5.2 NEGLIGENCE 12 3.5.3 WORKPLACE HEALTH AND SAFETY 13 3.5.4 OTHER LEGAL REQUIREMENTS 14

4 BUSINESS CASE 15 4.1 INTRODUCTION 15 4.2 NEW FACE OF HR FUNCTIONALITY 15 4.3 THE STRUCTURE 17 4.4 MOVING TO OUTSOURCING 18 4.5 OUTSOURCING BENEFITS 20

5 YSOURCE INDUSTRY RESPONSE 21 5.1 RESPONSE PACKAGES & VALUE ANALYSIS 21



1 YSource Summary

1.1 Who is YSource? YSource is Australia’s first HR independency solution company leading the HRM industry, bringing together businesses, non-‐for-‐profit organisations, unions, industry partners, education institutes and government agencies to help deliver enhanced performance, independency and greatly reduced human liability. Starting from a one-‐man business in 2012, a single vision shared by every person who has ever had a dream or started a business following the saying, ‘Dream, Believe, Create – Visions Live Forever’. Due to increasing ethical, legislative and regulatory requirements, the face of business has changed, leading us to create an organisation where we help get companies running back to their true purpose. Our people are energetic and inspirational, they come from a diverse range of experienced backgrounds, including arts, business, accounting, hospitality, tourism, engineering, finance, marketing, health and law. From small business to corporate working side-‐by-‐side with entrepreneurs, our business brings a unique combination of knowledge and passion to address new challenges and opportunities that face our local communities. YSource has been set up to answer the ever-‐changing environment of business, and to help challenge, develop and lead the next generation of interdisciplinary associates. Thus our organisation is devoted to the following goals:

• Creation of human resource management independency, fairness and equality, helping to increase workplace reputation.

• Ensure that innovation, and advancement of companies so they can progress indifferent from economic trends.

• Safeguarding partner companies to ensure objectivity and fairness. A high level of training is provided to our associates to deliver either specialist or generalist services from small to corporate organisations.

• Ensure that we understand our client’s industry and their workplaces to deliver cost efficient and highly reduced liability within their structure

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1.2 Our Business YSource is Australia’s first hybrid HRM internal independency firm, which delivers the best of HR consulting and outsourcing. This is achieved through the separation and implementation of an organisation’s human resources department, bringing it across into the YSource structure, to deliver the full spectrum internal department. Furthermore we are assuming corporate HR liability from your company. The unique benefits that our service offers are:

• Independency within organisations allowing us to train our people to a higher standard, increase autonomy and decision making.

• Assurance that efficiency is maximised to deliver an organisation’s human resource needs.

• Separation of Business, Union, Government and Industry Partner to ensure independency from influence, creating rapid and enhanced implementation of legislative and regulatory changes across all platforms of business.

• YSource HRM staff are rotated among family of businesses to enhance skills, industry / cross industry understanding.

As seen below our business takes the best parts of what human resource management is traditionally. Becoming a business partner, combining with a company, we will take responsibility for the success of your company’s HRM processes.

Functional Area Traditional Internal HR Department

Traditional HR consulting firm (e.g. Liquid HR)

YSource

Nature of HR program and function

• Responsive • Operational • Internal

• Proactive • Strategic • Societal

• Proactive • Operational / strategic • Internal • Completely

Independent

Creation of HR strategy and policy

• HR function has full responsibility

• HR function and line management share responsibility

• HR function with full process responsibility, shared onto employees and management

Organisation of the HR function

• Employee advocate

• Functional structure

• Reporting to staff

• Business Partner • Flexible

structure • Reporting to line

• Process Owner • Flexible Structure • Reporting to all

committee members

Profile of the HR Professional

• Career in HR • Specialist • Limited financial

skills • Current focus • Monolingual • National

perspective

• Rotation • Generalist • Financial

expertise • Focus on future • Multilingual • Global

perspective

• Rotational • Specialist • Financial Skills • Current HR Function

with future Strategic Focus

• Bilingual • Company Specific



2 Company Examination Summary

2.1 Company Background

Legal Entity Name: Advance Metal Concepts Pty Ltd

ABN: 86 099 815 291 ACN: 099 815 291

Trading Name: Metal by Design Establsihed Date: March 22, 2002

Other Trading Names:

Office Address Unit 83, 111 Leitchs Rd

Brendale, QLD , 4500

Business Phone: 07 3881 2092 Staff Nuumbers:

Email Address [email protected]

Website www.metalbydesign.com.au

Owner / Partners 1. Bruce Win 2.

Business Industry Metal Fabrication

2.1.1 Company Summarisation: Metal by Design is a specialist in quality unique fabrication and all aspects of mild steel, stainless steel, aluminum, copper as well as brass. A company founded on the extra mile of achievement to deliver stunning results for customers, no matter what the requirement. Metal by design is a family owned and operated business with the goal of making it as easy as possible for our customers to be creative by tailoring products to suit their individual needs. We pride ourselves on providing quality custom crafted metal products for both residential and commercial clients. The latest projects and services that are currently being delivered are: Services Latest Projects

Stainless Steel Kitchens Royal Pines Golf Resort – Upgrade

Shop Fittings Custom Boardroom table frame

Handrails Eastern Busway

Custom Furniture Heat boxes – concrete testing

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3 Industry Breakdown

3.1 Australian Government, Agencies, Unions and Industry Partners The manufacturing industry provides unique challenges for the HRM Process. YSource will symbiotically work with government departments, agencies, unions and industry partners. Ensuring that all current regulatory, legislative and industry standards are maintained without disruption to business activities within your organisation. YSource will provide a seamless experience in HRM, avoiding lengthy and costly change management processes. The departments that would be consulted on an ongoing basis by the YSource committee members are, but not limited to the following:

3.1.1 Government Departments • Department of Education and Training

o Consultation this department would be to ensure that all accreditation, training, workplace standards are continually updated to ensure employees are aware of the latest industry knowledge. This department would be consulted further to ensure that training material and knowledge management is maintained at national education standards.

• Department of Employment o Consultation with this department is to ensure all employment

legislation, regulations and standards are being maintained within the workplace including remuneration, training, conduct, selection etc.

• Department of Health o Consultation with this department is to ensure that health standards

within the workplace are met, implemented and followed by all levels of an organisation.



3.1.3 Government Agencies • Administrative Appeals Tribunal • Auditing and Assurance Standards

Board • Austrade (Australian Trade

Commission) • Australian Accounting Standards

Board • Australian Competition and

Consumer Commission • Australian Competition Tribunal • Australian Curriculum, Assessment

and Reporting Authority • Australian Human Rights

Commission • Australian Institute of Health and

Welfare • Australian Law Reform Commission • Australian National Audit Office • Australian Radiation Protection and

Nuclear Safety Agency • Australian Research Council • Australian Securities and

Investments Commission • Australian Signals Directorate • Australian Skills Quality Authority • Australian Strategic Policy Institute • Australian Taxation Office • Board of Taxation • Commonwealth Grants Commission • Commonwealth Superannuation

Corporation • ComSuper

• CSIRO – Commonwealth Scientific and Industrial Research Organisation

• Fair Work Commission • Fair Work Ombudsman • National Competition Council • National Disability Insurance Scheme • National E-‐Health Transition

Authority • Office for Learning and Teaching • Office of National Assessments • Office of the Federal Safety

Commissioner • Productivity Commission • Professional Services Review (PSR) • Professional Standards Board for

Patent and Trade Mark Attorneys • Questacon – The National Science

and Technology Centre • Regional Development Australia • Remuneration Tribunal • Rural Industries Research and

Development Corporation • Safe Work Australia • Safety, Rehabilitation and

Compensation Commission • Superannuation Complaints Tribunal • Tax Practitioners Board • Telecommunications Universal

Service Management Agency • Tertiary Education Quality and

Standards Agency • Workplace Gender Equality Agency

3.1.4 Australian Unions • Australian Council of Trade Unions • National Union of Workers • Australian Workers Union • Australian Manufacturing Workers Union • Construction Forestry Mining and Energy Union • Australian Institute of Marine and Power Engineers • Australian Services Union • Professionals Australia

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3.3 International Organisation of Standard (ISO) Preliminary industry research has allowed YSource to identify international standards for the manufacturing industry, of which encompasses your company. These standards are explicit guidelines when maintaining procedural training of employees and documentation. When working onsite and within, partner sites are as follows:

3.3.1 Critical architecture for Projects & Documentation • ISO 9001 Quality Management • ISO 14001 Environmental Management • ISO 27001 Information Security Systems • ISO 31000 Risk Management

3.3.2 Specifications for Industry

• ISO 19296 Mining and earth moving machinery – Mobile Machines • ISO 14721 Space data and information transfer systems • ISO 30101 Information Technology -‐ Sensor Networks: Sensor network and

its interfaces for smart grid system • ISO 14048 Environment Management – Life cycle assessment • ISO 26000 Guidance on social responsibility • ISO 17755 Fire Safety – overview of national fire statistics practices • ISO 18001 Information Technology – Radio frequency identification for item

management • ISO 26551 Software and systems engineering – Tools and methods for

product line requirements engineering • ISO 9241-‐910 Ergonomics of human system interactions

3.3.3 ISO Collections for Industry • Collections: Materials for the production of aliminimum • Collection: Cleanrooms and associated controlled environments



3.4 Industry Human Resource Management Spending Current HR spending is not available. YSource would work on centralising all HR programs and practices and liaise with different departments outside of YSource. For example communicating with government departments such as workplace health and safety and “fit to work”. YSource is to be viewed as a centralised matrix that deals with everything involved in human resource management. HR costing within any industry can add up very quickly, not just in dollars but also in time lost, reputation, and employee moral. In some cases as a direct result, contract or partnership loss. Below we have broken down approximate costs for human resource management within your industry as well as generic costs, which are relevant across all industry sectors:

3.4.1 Per Hire HR Spending Description Time Cost

“TRADITIONAL HR APPROACH” *Cost per hire

Agency Recruitment & Selection *10 – 16 percent of an average employee wage ($55,000)

2 weeks to 6 months depending on position

$5,500 -‐ $8,800

Advertising Fees *Regular Seek Advertisement 1 month $280

Travel Expenses Varies ?

Relocation Expenses Varies ?

Internal recruiter costs *Average HR Internal (50K per year)

2 weeks to 6 months depending on position $2,000 – $24,000

Training & Up skilling *Employee Wage + Course + Trainer etc. 1 week to (X) months $1,000 – 10,000+

Employee Record 1 Hour $27

Employee Medical & Fit for Work *Basic to Rail Safety Requirements

2 hours to 1 Day $200 -‐ $400

Alcohol and Drug Testing 25 minutes $25

Employee Induction *HR + Employee 5 Hours to 1 Day $270 -‐ $600

Approximate Total Minimum – $7,500

*Individual HR Advisor Cost for Industry Basic $52,000



3.4.2 Additional HR Spending Description Time Cost

“TRADITIONAL HR APPROACH” *Other estimative costs for HR spending within an organisation

Employee Medical & Fitness Testing 2 hours to 1 Day $200 -‐ $400

Alcohol and Drug 25 minutes $25

Workplace Investigation Example Workplace Bullying depends on investigation type

$17,000 -‐ $24,000

Performance Management Meeting (1hr); with potential ongoing consultation and monitoring (total time 24hrs +)

$27 -‐ $648 +

Consultation Meetings *Government, Union, Business, Industry Partners

Depending on Consultation (Workplace agreements min 6 weeks)

Sum of all parties attending

Human Resource Documentation 4 Days per document, not including consultation $864

Procedural Documentation 2 Days per procedure, not including consultation $432

Training Development & documentation 3 -‐ 14 Days per procedure not including consultation $648 – $3,024

People & Culture (Development and management)

Progressive -‐

Employee Career & Succession Planning Half a day per employee $108

Work-‐Life-‐Health Balance Planning Per employee depending on business, industry & requirements

$50 – $250

Exit Interviews Not just interview; but the loss of human asset $100 -‐ $40,000 +

Return to Work Per employee depending on business, industry & management requirements

$5,000 – $20,000

Workplace Health and Safety *Does not include total revenue offset loss (Safety Council)

Average cost of workplace injury direct cost (38,000) + Indirect cost (Direct*4)

$190,000

Compliance and Quality Management Audit; then update and management per month per process

$324 -‐ $567

Change Management Dependent on size of change >$20,000

Corporate Team Building Per Session (10 people) $300 – $500

In House Training Trainer *Separate to Development

Example 1 Day Hire *40 dollars per hr. average & depends on training type

Between 250 to 400 dollars



3.5 Legal Risks Requirements and Obligations Analysis of the manufacturing industry has uncovered human resource legal risks and costings. By leaving these unchecked your company may incur both heavy industry penalty, damaged reputation and possible civil or criminal action by either public or employee. The main types of liability, which may be incurred around the product, are:

3.5.1 Breach of Warranty Warranty-‐based product liability claims usually focus on one of three types: (1) breach of an express warranty, (2) breach of an implied warranty of merchantability, and (3) breach of an implied warranty of fitness for a particular purpose.

3.5.2 Negligence Manufacture Negligence Alleging the manufacturer’s improper assembly, materials, or packaging may encounter obstacles because the evidence needed to prove a breach of duty is under the defendant’s control. However, modern discovery rules and the doc-‐ trine of resi psa loquitur may help plaintiffs establish a breach in such situations (taken by US law). Inspection Negligence Manufacturers have a duty to inspect their products for defects that create a reasonably foreseeable risk of harm, if such an inspection would be practicable and effective. Negligent Failure to Warn Sellers and manufacturers often have a duty to give an appropriate warning when their products pose a reasonably foreseeable risk of harm. In determining whether there was a duty to warn and whether the defendant’s warning was adequate, however, courts often consider other factors besides the reasonable foreseeability of the risk. Negligent Design Manufacturers have a duty to design their products so as to avoid reasonably foreseeable risks of harm. As in failure to warn cases, however, design defect cases frequently involve other factors such as the magnitude or severity of the foreseeable harm. Three other factors are industry practices at the time the product was manufactured, the state of existing scientific and technical knowledge at that time, and the product’s compliance or noncompliance with government safety regulations.



Strict Liability This type of liability focuses on the behavior of the manufacturer (as in negligence), strict liability claims focus on the product itself. Under strict liability, the manufacturer is liable if the product is defective, even if the manufacturer was not negligent in making that product defective.

3.5.3 Workplace Health and Safety Under the Workplace Health and Safety Standards and legislation act there are a number of obligations that must be met by persons conducting and undertaking business practices. These parties include business owners, officers, workers and other parties. Such obligations are subject to the compliance, enforcement and penalty provisions of the WHS Act. Should compliance under this act not be met government bodies are able to enforce depending on the type of non-‐compliance within the workplace, the following:

• Improvement notices. A statutory notice issued by the inspector requires a person to carry out certain actions within a certain time. An inspector issues these when they believe someone is breaching, or has breached, a provision of the WHS Act or Regulations.

• Prohibition notices. A notice that prohibits an activity or an activity being carried out in a particular way that an inspector believes involves, or will involve, a serious and immediate threat to the health and safety of any person. A prohibition notice stops an activity from happening or the use of an item and stays in place until an inspector is satisfied adequate action has been taken to remove the threat.

• Revoking, suspending or cancelling authorisations. Authorises are given to people and organisations to undertake some forms of work, such as operating a major hazard facility. For non-‐compliance it may be decided that your authorisation is to be revoked, suspend or canceled in order to deal with conduct or practices identified during interventions.

• Letters of caution. A warning to an entity or a duty holder that there has been a detected breach of the WHS legislation or other responsibility that in view, has reasonable prospects of successfully proving in court.

• Work health and safety undertakings. An undertaking from a duty holder to fulfill an obligation under the WHS Act. A government agency such as Comcare can accept undertakings in lieu of court proceedings (except for the most serious, category one offence/s).

• Prosecution. Court based action for the most serious alleged breaches of legislation. Prosecution Policy of the Commonwealth in deciding whether to pursue prosecution action.



3.5.4 Other Legal Requirements Besides the above legal risks and obligations an employ has a number of other legal responsibilities when undertaking business is as follows:

• Pay Rate • Leave Obligations • Types of Employment Arrangements • Employment Records • Superannuation • Equal Opportunities • Return to Work • Workplace Dispute Resolution

• Hours of Work • Employment Process • Termination and Dismissal • Descrimination • Taxation • Insurance • Worker Compensation • Right to Work



4 Business Case

4.1 Introduction Organisations today are faced with constant external pressures. Confronted with stiffening competition due to globalisation and international trade, companies must become more efficient and productive if they are to remain serious contenders in the ever-‐expanding world stage. Historically, organizations have competed through technological innovations, the availability of capital, and access to markets, but organizations must now use their people to achieve a competitive edge and take a serious look at how their HR policies and practices are contributing to the total business strategy, since the winning organizations of the future will be those that can best attract, retain, and motivate employees with the right skills (Lawler 1992, Benimadhu 1989). Human Resource Management today is required to be multi faceted playing a key role in guarding and delivery of strategic decision-‐making. Most HRM departments, this new role requires a change in mind-‐set and in the way they do business; managers must find ways to cut costs and increase service delivery. This examination of how HR departments are coping with the tumultuous environmental changes. It focuses on the role of outsourcing within an HR context and the role that outsourcing might play in dealing with the new challenges. The data gathered filtered within a listing of the organisations, the industries in which they operate, and the total number of employees. Although the organisations participating in this study do not represent a random sample, it is believed that, taken together, they provide a snapshot of how organisations and their HR functions are changing to meet the new business and economic pressures. Organisation Industry Approx. Workforce IBM Information Technology 110, 000 Dofasco Steel 7, 000 One Steel Steel 11, 000 John Holland Group Construction 5, 000 – 10,000 Queensland Rail Transportation 5, 000 – 10,000 Warner Lambert Packaging Goods 1, 400 Woolworths Retail 50, 000

4.2 New Face of HR Functionality Smaller, leaner businesses that emerge count on high productivity from fewer people, human resources management is at the forefront of organizational change (Coates & Jarratt , 1994). Once believed to be strictly an administrative function low on management's priority list, the human resource function is shedding its 'administrative stigma' and becoming involved in top management decisions. HRM is now required to provide a



business case for new policies and practices and is increasingly being forced to make the choice between becoming bottom line-‐oriented and being completely eliminated (Benimadhu, 1989) within many businesses. In a study conducted by Lawler (1992) found that when organisations were asked to identify strategic issue which were the responsibility of the human resource management department the most common answer was ‘none’ (21 percent of the cases). However, due to external pressures may force organizations to change quickly. Although the human resource management department will still need to deliver technical HR services and perform some traditional 'Police’ work, it will have to do so with a strategic mindset, ensuring that policies and practices are driven by the business strategy and business needs, and that functions such as planning, staffing, development, performance management, compliance, OH&S, benefit management and change management attention, because they help to generate, reinforce, and sustain organisational competencies (Ulrich 1994). Thus, human resource management can no longer be a separate function with divergent activities (Dyer 1993). To achieve its position as the right hand of strategy implementation, HRM professionals must be able to act as consultants and partners to top and line management (Kesler, 1995). Human resource management professionals must know how to evaluate the business impact of policies and communicate all financial benefits and risks. They will also need to be effective agents of change if they are to provide guidance to top level right through to line managers in dealing with pressures such as organisational downsizing, restructuring, and implementing new technology, legislative requirements or new operational procedures. In addition, since human resources management is focused on increasing employee productivity, fostering and developing organizational effectiveness skills within the function will be critical (Benimadhu, 1989). Essential competencies required in the new era of human resource management can be aligned below. Performance Capabilities HR Technical Know How Business Know How Catalytic influence Diagnostic and fact finding analysis Innovative process and structure Standard Assurance Administrative Services Problem Solving

Organisational design Talent Management Employee Involvement Training Development & Education Reward and Recognition Well-‐being and morale Communications

Competitive strategy Macro and micro economics World class operations Marketing and Sales Industry knowledge



4.3 The Structure The strategic alignment between line management and human resources in an organisation is required; integrating this function within line management is required more than just linking HR to the business strategy. Human resource processes must be integrated with management processes, HR staff functions with line management, and HR measures with management measures thus permitting the organisation to quantify the business impact of HR practices (Walker 1994). According to Walker (1994), the dilemma between centralization and decentralization of the HR function is at the centre of many HR decisions. Overall, operations have been decentralised and a lot of power has shifted from corporate headquarters to business units. In the future, the number of HR staff at headquarters will diminish and more staff will be assigned to support the business units. But at the same time, to avoid duplication there is a movement towards centralizing certain activities that serve all areas of the business (Benimadhu 1989). The important question is where specific functions should be performed to best support the organization's needs. Walker establishes that HR] unbundling is intended to integrate the HR function into the business in order to reduce overhead expense, eliminate duplication, and focus time and resources on value-‐added activities. Walker points out that many organizations keep all the services in the right-‐hand column of. In the HR department, however, they are also more than willing to contract out services for organizational change, quality improvement initiatives, and management development. But if change management and strategic orientation are to play a critical role in the future of HR, it would be logical to develop and retain these competencies inside the HR department while contracting out non-‐core functions. However, Perrin (1992) explains that with line management the responsibility for certain activities should not be equal. Furthermore, it is believed that HR should report to the CEO if it is to play a strategic role within the organization; the CEO must recognize HR as a value-‐added function, and the link between the CEO and the head of HR must be perceived as real by the employees (Benimadhu 1989). A Towers Perrin study found that HR functions reported to the CEO in 74 percent of the organizations surveyed. Eighty-‐eight percent of respondents preferred this reporting structure for the future (1992, 44).



4.4 Moving to Outsourcing Although the HR function will be increasingly integrated within the overall organizational structure, HR will still be responsible for many nonstrategic activities. A recent study by the Bureau of National Affairs (1994) indicated that in 85 percent of organizations surveyed, HR departments were responsible for outplacement counselling, insurance benefits, cafeteria management, employment equity legislation, HR record keeping and employee assistance programs (EAP), many of which can be classified as nonstrategic. In addition, there may be activities that the organization has neither the resources nor the capital to perform in-‐house. Thus, transferring these activities to external vendors may be a strategic option for the HR function. Although some organizations are outsourcing HR functions such as recruitment, benefits-‐plan design, and retirement services, the most commonly outsourced functions are temporary placement, employee assistance programs, and relocation services (Labbs, 1993). As the number of government regulations increase, companies that currently supply HR services are expecting a rise in demand because many organizations no longer have the expertise to handle all the necessary services internally in a cost-‐effective manner. Loh and Venkatraman (1992) found two key determinants pushing organizations to outsource. First, the business-‐ cost-‐structure plays a critical role. If costs are high, the organization may be more inclined to reevaluate the overall expenditure of the HR department and improve efficiency and productivity. Second, organizations with low economic returns on investments may be more inclined to outsource key functions. In these organizations, senior executives are under increased pressure to prove that they provide an essential, value-‐added service. This is particularly true of staff functions such as HR, which have been under extreme pressure to cut costs and increase efficiency. In most organizations, HR is still considered to be a cost centre, and its ability to contribute in a direct manner to the bottom line is limited (Benimadhu 1989).

Functional Area Extremely Important (%) Important (%) Not Very

Important (%) Human Resource Management 37 46 18

Research and Development 58 24 15

Manufacturing 62 28 8

Marketing 73 23 2

Strong Agreement of the Following Statements (%) Obtaining and preserving the necessary human resources is much more important than obtaining and preserving the necessary financial resources

5.2



Obtaining and preserving the necessary human resources is much more important than obtaining and preserving the necessary technology resources

7.0

Obtaining and preserving the necessary human resources is much more important than obtaining and preserving the necessary marketing resources

8.0

**Martell and Carroll, 1995 Functional Area Functional Business Partner

Nature of HR program and function

Responsive Operational Internal

Proactive Strategic Societal

Creation of HR strategy and policy

HR function has full responsibility

HR function and line management share responsibility

Organisation of the HR function

Employee advocate Functional structure Reporting to staff

Business Partner Flexible structure Reporting to line

Profile of the HR Professional

Career in HR Specialist Limited financial skills Current focus Monolingual National perspective

Rotation Generalist Financial expertise Focus on future Multilingual Global perspective



4.5 Outsourcing Benefits Outsourcing allows an organization to focus on a set of ‘core competencies or the core business,’ which are the critical or fundamental functions that provide a competitive edge. Trying to establish what is ‘core’ within an organization is a difficult task, not easily understood by many senior executives. Quinn and Hilmer (1993) recommend the following criteria:

• Core competencies should focus on skill sets, not product knowledge, since products are easily duplicated or outdated but skills can be transferred across the organisation and infiltrate all functional areas.

• The skill sets identified should be flexible and able to adapt to changing business requirements. It is crucial that the core skills continue to be valued by customers and provide the organization with a competitive edge over the long run.

• Organisations should limit the number of core competencies. Most organizations value two or three essential activities. Since each skill is at the centre of the organization’s competitive advantage, the investment in these skills should not be diluted.

• The skills should provide a unique source of leverage in the organization's value chain and fill a gap in the marketplace, where intellectual resources can provide the organization with specific advantages.

• Organizations should identify areas where they can dominate the market. • Finally, core competencies should be embedded in an organization's systems

to ensure that they outlive specific individuals. From these recommendations it follows that activities with little strategic focus or activities for which the organization has little in-‐house capability are the ones that could be contracted out. “Outsourcing is not only about obtaining a partner to help set a strategy, the truth is that your partner in business should be independent helping your company achieve the end result helping to enhance your company’s reputation while helping to reduce liability and enhancing human resource safety.”



5 YSource Industry Response

5.1 Response Packages & Value Analysis *Each package is based upon single HRM advisor / employee required for a company custom quotes will be advised through consultation method. Each package has been established to safeguard maximum efficiency and monetary value, by maximising the handling of each HR advisor while minimising all human resource management processes and elements in your organisational structure. The YSource process for establishing proper practice is to first conduct a one time full audit of your organisation’s processes, workplace environment, employee training and development requirements. YSource will meet with each staffing level to be able to understand the depth and breadth of your full organisation. Normally this will take 2 weeks and is also the transition phase. Liability will be directly established from your firm as consultation for each process is taken on, immediately handling the outsourcing transition and transference. This discovery phase will uncover any issues that are currently faced within the workplace environment. Coupled with this it will focus on integration of your current HR department into the Ysource team. Upskilling these employees is pertinent to the overall success of the HRM independency program we are offering. We then consult with management about the recommendations and deliver a phased plan on top of normal working priorities. Each package is per HR advisor the basic package is 10,000 per HR advisor per month. The package will be in direct correlation to how many HR Advisors required. Upon further consultation if Metal By Design requires premium or corporate packages these will be done under negotiation due to the specialty requirements around them. Specialty programs can be addressed individually or can be maintained continuously. An example of this could be payroll; a specialist payroll accountant hired by Ysource for superannuation, employee remuneration and taxation. Each specialty requirement will be done on a case by case basis to ensure maximum expenditure and efficiency. Below is an outline of individual products and package levels.



Documents

Metal By Design Workplace Analysis