I have followed several processes of Outsourcing Management and can say with certainty that there are some “warning signs” in the relationship between business partners (service providers with the Borrower) that, once occurred, indicates that there will be problems in the near future.

I give the name of these “warning signs” of “Red Flags of the Management of Outsourcing.” The good manager must be careful to detect these signals and anticipate any problems that arise, which will result in a better scenario for the Borrower Services, remember always, that it has liability Subsidiary or Solidary the labor rates, pension and tax of Outsourcing Company. Let´s go for some “Red Flags” just an example:

1 - Direct orders given to employees of the Borrower Service provider by employees of the Outsourcing Company. Characterization of Passive Hidden Labor.

2 - In monitoring of receipts of payments of wages and employee taxes the provider, the manager discovers that there are errors and delays in collections.

3 - It appears that there is a high turnover of employees of the provider, in a percentage far above the market average, which reduces the quality of work and may even increase the rate of accidents due to lack of training and experience of outsourced employees.

4 - The manager must pay attention to the requirement for executive’s own policy-Services, that matter is only to reduce costs, and not with the quality of the service company, focusing his vision only result in short-term.

5 - When the policy-Services controls the working time of employees of the Company provider. Clear characterization of hidden labor liabilities.

6 - There should not be under any circumstances, by the requirement that a policy-official service provider is chosen to provide it. This characterizes the person in service provision which sets in reality an employment relationship between the policyholder and third party. Again, it is hidden liabilities labor.

7 - The Borrower must track the “financial health” of the service provider, staying alert for pending and registered in the name of the provider in the entries limited and, worse, when there usual discounts and systematic advance of the invoices for services rendered in Banks or Factoring Companies, which indicates a failure of financial providers.