With the rapid digital shift that is happening to the workforce, we can say that the future of a diversified and borderless remote workplace is already taking place. Not only did this shift encourage inclusion in teams, but has also been proven to be a cost-effective strategy to get the best talents while having a more diversified representation for connecting with your customers. This is why more and more businesses are investing in hiring and managing remote teams globally.
The most common way businesses successfully outsource is by partnering with outsourcing agencies such as Business Process Outsourcing (BPO) or Employer of Record (EOR) companies. Most businesses engage either of these two types of outsourcing agencies to hire remote employees efficiently.
But what is the difference between an EOR and a traditional BPO, and which one is best for your business? In this article, we’ll talk about the pros and cons of EOR and BPO to help you assess which type of outsourcing agency is ideal for the services you need.
Let’s discuss what a Business Process Outsourcing or BPO is first.
A BPO is an outsourcing solution where a company subcontracts its business functions to a third-party provider. Despite initially being for manufacturing companies, other industries also started contracting BPOs for back-office and front-office functions.
Back-office functions of a BPO support the core operations of a company, including the IT services, accounting, payment processes, human resources, and payment processing. Meanwhile, the front office functions include all the business functions that connect with customers like sales, marketing, and tech support.
Now that we know about BPOs. Let's discuss what an Employer of Record or EOR can do for you.
An EOR is an outsourcing provider that handles the legal and administrative tasks that come with hiring employees remotely. Typically providing a simple and efficient option for businesses to legally employ foreign talents without having the need to set up a new business entity in the country they are outsourcing from to avoid violating any labor grounds.
Simply put, an EOR helps in carrying out legal and regulatory requirements of hiring, employment, payroll, and other human-resource-related tasks.
Many businesses are unaware of the advantages and disadvantages when choosing between EOR and BPO for their outsourcing requirements. However, the key is to assess your business’s needs and goals and check which type of outsourcing provider suits you best.
If you want a “managed for you” business process and outsource an entire department, then a BPO is the best option for you. However, you have to be ready to pay a higher price due to office, equipment, and management costs. It will also work if you don’t want control over your people’s salary. Once you’re settled in with a BPO company and paid for their services, they will be the one to decide how much your employees would get.
On the other hand, if you simply want to outsource and have your team’s payroll and local HR administrative tasks taken care of, then EOR is for you. It is a perfect choice if you still want to retain full control over your remote team and maintain the company’s culture within each department.
Ultimately, one of the reasons why most companies are switching from partnering with BPOs to EORs is the freedom to manage their own outsourced employees. More and more businesses prefer to be included in the hiring and employment process without having to be the ones to source employees.
Considering that almost 63.3% of businesses claim that retaining employees is difficult, showing your company’s concern for employees whether face to face or remote can help in retaining outstanding and loyal workers. EORs like Remotify can even help you provide HMO and other benefits for your employees.
Both EORs and BPOs have their own sets of advantages and disadvantages, and choosing between them should be based on your business needs.
If you want to outsource and diversify your workforce and still have full control over your remote team minus the payroll headache, HR administrative tasks, and legal processing, then you need to partner with a reliable EOR company in your target country.
Remotify also offers additional services such as GDPR and cybersecurity training, employee background check, and may help you provide HMO and laptops for your outsourced employees.
To learn more on how you can outsource Filipino talents through an Employer of Record, you can check out Our Services for more information.
Remotify is your next-generation solution to growing your team remotely and cost-effectively in the Philippines.
Through our Employer of Record service, Remotify will employ and payroll your workers in the Philippines and do the heavy lifting for you. We will take care of local HR, compliance, attendance tracking, payroll, and reporting so you can focus on what is most important: growing your business.
This means you can quickly and securely hire employees in the Philippines, attracting top talents and keeping them engaged through the process. At the same time, you avoid the overhead of establishing your own entity.
From complex local tax and labor laws to in-country capital requirements and compliant HR management, payroll, and benefits disbursement, getting started in a new country to tap on its low cost and great talents can be a time-consuming endeavour. But with the right partner, it doesn’t have to be. Remotify is here to keep things simple for you.
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