Mr. Afam Udeagwu, is the Managing Director/Chief Executive Officer, XL Outsourcing Ltd, the first outsourcing firm in Nigeria. In this interview with Ebere Nwoji, he speaks on the challenges facing outsourcing business in Nigeria, the need for government to ratify Convention 181 of the International Labour Organisation and make it a law in Nigeria and his company’s journey so far after 17 years of operation in Nigeria
Can we know you and the company you represent better?
My name is Afam Udeagwu, I am the Managing Director/CEO XL Outsourcing Limited. XL Outsourcing Ltd is an indigenous company registered by the Corporate Affairs Commission. We are licensed by the Federal Ministry of Labour and Employment to provide outsourcing services to our clients. Over the years, we have been able to build a reputable company. We have presence in the whole 36 states of Nigeria including Abuja. We also have operations in Ghana, Sierra Leone, Liberia and USA. XL Outsourcing, was ISO certified in 2006, a foremost outsourcing company that was certified by ISO so our processes is of international standard.ISO is an international organisation for standardisation. Our processes are of international standard. Our outsourcing services includes human resource outsourcing, fraud and integrity management solution, training and capacity building, background checks and certificate verifications. We also do call centre outsourcing, our call centre is Avaya call centre solution. Of course Avaya call centre solution, is a very intelligent solution for call centre. In XL, we see ourselves as a critical link in the area of development of skilled man power. Our platform has provided jobs for thousands of young Africans, we are proud to say that when it comes to outsourcing, XL, is a big brand because we have been there for a long time and not only that, we have been improving on our services.
Can you tell us how outsourcing business is faring in Nigeria?
Outsourcing, started in the early 2000 in Nigeria and we were one of the pioneers. Currently, it is improving. The Federal Ministry of Labour and Employment has licensed over 200 PEAs as Private Employment Agencies. Human Capital Provider Association of Nigeria they have their membership about 150 or there about so there is a gap. We are looking for other companies to join this association why because this association is interested in provision of decent job, development of code of conduct and ethics for employers of labour. So outsourcing is faring well so far so good although more can still be done. As you know, International Labour Organisation gave access to labour flexibility in1997 through the convention 181, so with that private employment agencies were encouraged to play in the industry.
Tell us what you do, what outsourcing is all about?
In simple definition, let me give you what outsourcing is. I will like to give you the definition of Akinbode in 2003 journal of basic and applied science. He said, “Whenever there is transfer of knowledge, work, decision making right to an external subject matter expert entity, that is when outsourcing has taken place, so anytime a company is engaging another company to handle work for them that is outsourcing. In outsourcing, we don’t do human resources alone, we outsource call centres, training and capacity building payroll management as well.
Who are your clients?
We play in all the sectors, I wouldn’t want to mention, we play in the banking sector, oil and gas, telecom and manufacturing sectors, our solutions are tailored mainly to help them concentrate on their key activities, when they are able to concentrate on their key competences, they are able to remain competitive, save cost for themselves, remain efficient in what they do. So outsourcing is a wonderful business model that any serious company is encouraged to outsource.
What is the relationship between you and the public sector like?
Public sector is coming up gradually, we are working for few government agencies, we encourage government to do more because they are the ones to drive this process, as we speak, the convention 181, I spoke to you about international Labour Organisation 1997 is yet to be ratified by Nigeria, so we need them to ratify that convention, because article two of that convention states that “one purpose of this convention is to encourage flexibility of labour as well as to protect the right of workers that use the services of PEAs”. So apart from seeking protection of outsourcing companies, that convention also seeks to protect the right of workers, we are encouraging government to ratify that, it will go a long way. Outsourcing came about because of the changes in the operating environment, globalisation, transformation, restructuring, because of the need for companies to remain competitive, that was what brought about the change in employer – employee relationship and the need for companies to run a lean structure in order to increase their bottom line.
So we want government to ratify the convention. Some government agencies are already making use of outsourcing services. The ratification will make it a law, they should also try and fund the Federal Ministry of Labour and Employment to monitor outsourcing firms because they are the ones that issue licence to private employment agencies, if the government is able to fund them, they can go after the quacks in the industry, because there are a lot of quacks in the industry that is why we are having a lot of issues about people not getting fair treatment and income, some companies are cutting corners because these people are not properly registered, so we want government to empower the Ministry of Labour and Employment to do monitoring in outsourcing industry, this will empower all of us that are properly registered to do what we know how to do best.
What are your challenges?
The challenges we are having in outsourcing business are numerous.
One is what we call ‘stakeholders alignment’. Over time, you hear labour union speaking about casualisation, whenever there is outsourcing, you hear labour associations talk about unfair treatment. When I talk about stakeholders alignment, it is important that they get to know about this business model called outsourcing, outsourcing is typically a business model that creates jobs, it reduces unemployment really because it creates different kinds of jobs, it creates flexibility in working hours, you can choose to work when you want to work, one of the challenges is stakeholder alignment let them understand that outsourcing is not casualisation, it is geared towards creating decent job. What is a decent Job? We have four criteria for measuring a decent job. One of them is that the job must be productive and safe. Secondly, the job has to provide fair income. Thirdly the job has to provide social protection. Fourthly, the job has to guarantee workers right. The fifth is that the job should guarantee freedom of dialogue and unionism. If they give outsourcing companies opportunity, they are actually geared towards providing employment and decent jobs.
Second challenge is lack of professionalism of some outsourcing companies. Like I said earlier, some of them are not properly registered and monitored that is why some of them are cutting corners, they will collect low fee and tell you they can do it and when you give them the job, they get it messed up so that lack of professionalism is also a challenge. The third challenge is inadequate funding. Some companies because they have not taken time to drill through what they want out of outsourcing, some of them think it is just a change of pay manager, they think the only cost the company incures on a staff is just salary, salary is just one component, the cost of supervision is there. The cost of going on leave is there, if you employ a driver and the driver runs away with your car, you bear the cost but if he is an outsourced staff, you hold the outsourcing company responsible so the risk of having that staff is what the outsourcing company has taken from you. There’s need for users of services to fund outsourcing companies properly in order to render quality service. The fourth challenge is inadequate monitoring. Like I said earlier, Federal Ministry of Labour and Employment is expected to over time visit outsourcing companies, they are expected to over time walk into any company that uses outsourcing service and ask it to show its books, I want to see the company that outsource for you, I want to see their licence, compliance papers and all that. So by so doing, people will be able to sit up and know that government is out to track down quacks. Of course, we are also encouraging a heavy fine on these quacks that are not properly registered.
Who is your regulator?
The regulator is Federal Ministry of Labour and Employment. The human Capital provider association is an umbrella body for all providers of labour, it supervises labour employers but has not been properly registered as an association.
What do you have to say about a situation where employees especially security guards are paid peanuts by the outsourcing firms compared to what the company originally pays?
If that has happened anywhere, it must have come from unprofessional companies. Companies that are not properly registered, because as a well registered company, before you have your license, you must have passed through a lot of requirements. First, the regulator needs to know the people behind the company, it needs to know if these people are qualified to do outsourcing before it licenses you, you need to provide bond to the Federal Ministry of Labour and Employment so a properly registered company will not find itself in this kind of mess.
Taking example from your company, how do you scale your staff? Are you the one that fixes salary or your client?
Salary is fixed by the clients. The clients, decide what to pay, they only pay us service charge but these quacks collect their service charge also collect part of the staff salary, but for us, our books are clean, because we don’t want to spoil the reputation we’ve built over the years, and it is because of this reputation that we were awarded Africa most trusted company in outsourcing.
You said apart from human resources, you also venture into other things so what motivated you?
We have up to 180 million Nigerians and Nigeria is a very large market for whatever you want to do and because we were the first to enter into this business, we were able to see opportunities as they are coming up and what we offer is a shared platform. The bank or any business don’t have any business investing in call centre because you can get it from outsourcing companies and pay when you need them. The good thing about outsourcing is that you don’t pay for the services you don’t use. You only pay for the ones you use and you can get them at cheaper rate because the outsourcing companies have the platform already so we are benefiting from the economy of the state that is why we are able to offer these services at cheaper rate. Companies can gain access to world class technology at cheaper rate. Outsourcing their company will make them have access to subject matter expert who are expert in doing these things. All they need is paying a little money and they will have these services rendered.
Do you have experts in these new areas you want to venture into, experts who can handle them?
On experts, let me start with fraud and integrity management solution, when we get our guys, we flew our guys into America to get trained about it and they are properly certified by truth and deception technology. This technology is able to detect someone with capability to commit fraud over time. If you are someone I hired and you are working in a cash environment. This technology helps me keep track of you. If I test you today and I test you in the next six months and there are changes in your behaviour, it informs me and I’m able to relocate you elsewhere. We are the only company that has this technology in Nigeria and we have the sole license to market this in the whole West Africa. Call Centre, of course, our guys are properly certified, the technology we are using is one of the best, it’s a very intelligent software. Abaya multimedia call centre solution. In training and capacity building, our faculty is so big that we are able to handle services then in our payroll, we have software that can handle it very quickly.
You have been in the outsourcing business for 17 years now what were the challenges you had then when you first started?
First, suspicious/lack of trust: some people will say is this person trying to study my business? They were not able to immediately plug into the ideas we are selling but over time we have been able to surpass that. Secondly, Africans’ ownership spirit: They want to say I have this and that, even when the assets are not giving them money, they still want to hold unto them instead of letting these processes go to expert that can handle them and even give them return on investment. So these are the challenges but I thank God today, most of them are embracing outsourcing services including government parastatals.
What is your view on this assumption “Nigerian youths are unemployable”?
We have a centre we call knowledge exchange centre, the objective of this centre is to bridge the gap between leaving school and getting job, making people employable, so we have a training centre that trains people on how to get jobs because the theory they learnt from school might not help. So that centre is able to bridge that gap of unemployable. Once we finish the training, because we also have contracts where we deploy people, these people we train we are able to fix them where we have spaces.
Who gives you those people you train?
Any interested person can apply, he/she just has to pay a little token.
What is your solution to high rate of unemployment in Nigeria?
First of all, the government should embrace this concept of outsourcing. Like I said, outsourcing creates different forms of job. It creates online jobs, temporary jobs, permanent jobs. It is flexible, it also helps people develop multiple skills and learn different skills, so if the government should embrace outsourcing, it will help to create jobs the more. With outsourcing, people are able to work whenever they want to work, you don’t have to tie the person down, the person can work whenever the person wants to work. I think that is one of the key areas the government should look into. Also supporting the outsourcing firms that have been in the industry so that they can increase what they are doing currently, that will go a long way.
On the side of private sector, what do you have to say?
The private sector, of course you know businesses are open to create value, they are always looking at profit and loss, anything that wouldn’t give them profit they wouldn’t go there. We encourage the private sector to also outsource. Outsourcing guarantees the person regular employment because if I send you to company A and company A is right sizing and they ask me to withdraw my person, all I need to do is to withdraw you and put you elsewhere because I service other companies so it guarantees somebody’s regular employment. Private sector should outsource what is not core to them. Like one American management consultant Peter Drawker said, do what you do best and outsource the rest. That is my message to the private sector.
Assuming a fresh graduate looking for job comes to you for employment what do you do?
First of all, we do the interview and know what skills the person has because we are able to match skills available over available vacancy, when we profile the person, after interview, we do background checks to ensure you are really whom you say you are, we do certificate verification to confirm that what you are sending to us is actually genuine, so before we have you in what we call keep in view database, you would have gone through all these processes. And this database is able to help me deploy staff at short notice. Once a client gives us an approval to deploy and the client says I need you to fill this vacancy, these are the skills I am looking for, because I have already profiled someone for that, I am able to match that skills quickly and deploy within 24 hours using our platform around the nation. We have offices in six geopolitical zones the South-south , South-east, North-west, North-central, North-east as well as Lagos, it is hard to get outsourcing company with this structure we have, the essence of these structures is to deploy staff quickly.