IMPACT OF OUTSOURCING SERVICES ON MANPOWER AND OPERATING COST OF NEPAL TELECOM

Abstract

This study investigates the impact of outsourcing services on manpower and operating costs at Nepal Telecom, aiming to understand how outsourcing influences workforce structure, labor costs, service quality, operational efficiency, and vendor management. The objectives include examining the effects of outsourcing on manpower levels, analyzing relationships between key variables, and assessing their overall impact on operational costs. Utilizing a quantitative research design, the study gathered data from 384 employees through structured surveys. Descriptive and inferential statistical analyses, including correlation and regression analyses, were employed to explore the relationships between the variables. Key metrics such as means, standard deviations, and ANOVA were also calculated to provide a comprehensive view of the data. The findings reveal a moderate reduction in manpower due to outsourcing, with significant improvements in labor cost management and operational efficiency. Specifically, labor costs and vendor management costs showed strong correlations with operating costs, indicating that effective management of these areas contributes to overall cost savings. Service quality remained stable or improved; suggesting that outsourcing non-core functions can enhance operational performance without compromising customer satisfaction. The regression analysis confirmed that the combined predictors explain approximately 32.9% of the variance in operating costs, highlighting the significance of vendor management and operational efficiency in achieving cost reduction. In conclusion, outsourcing has had a generally positive impact on Nepal Telecom's operational framework, facilitating better resource allocation and efficiency while maintaining service quality. The study emphasizes the importance of strategic outsourcing management to maximize benefits while mitigating potential challenges associated with workforce changes.