Focusing on the profitable aspects of business should be the priority of business owners and executives, and not office space, recruitment, or HR-related functions. Despite this, there will always be other tasks associated with running a company that hinders them from concentrating on customer retention or operational excellence. This is where Staff Leasing and Business Process Outsourcing come in.
Both services were created to reduce workload so that businesses can minimize administrative responsibilities, but at the same time, it is confusing to differentiate one from the other. Today, we'll take a look at the differences between staff leasing and business process outsourcing to help you determine which model is better suited for your operation.
Business Process Outsourcing (BPO) is a service where companies hire a third-party provider to perform non-primary business functions. This service is almost essential for many businesses as it allows companies to achieve maximum efficiency while expanding their operations and entering other profitable ventures.
Payroll & HR management, administrative functions, and technical support are the roles that are outsourced the most. Using the BPO model, these non-executive workloads are handled by employees outside of your company, allowing you to focus on revenue-generating functions.
Staff leasing, or Staff Augmentation, functions almost the same as the BPO model but with two major differences: the flexibility to choose the staff and directly manage those employees remotely through virtual offices or onsite. In the BPO model, clients usually do not have the option of choosing an individual, as roles are distributed to incumbent employees.
Meanwhile, Staff Leasing allows you to work closely with the PEO (professional employer organization) of your choice in selecting and recruiting candidates. This gives you additional flexibility compared to the BPO model and added control over your staff.
Staff Leasing also saves you time and effort in terms of employment legislation. The PEO handles your employees' paperwork, but your outsourced team still answers to you directly, complying with your company values and adhering to your policies.
While both business delivery models offer invaluable benefits to interested clients, the flexibility that Staff Leasing provides gives it a slight advantage over the BPO model. Aside from being less expensive, Staff Leasing is a great way to get your feet wet in building an offshore team and back office in the Philippines.
The freedom to choose the right candidate, as well as outsourcing the legal matters to the PEO of your choice gives you added cost savings and more time to focus on your core competencies.