In the modern business environment, a number of companies are understandably uncomfortable with the risks inherent to expanding their staff. This is not because of a lack of positions to be filled or by problems with the competency of the screening process. Instead, it is because of all the paperwork and technicalities involved in adding new members to an existing workforce. This has made the option of offshore staffing a popular choice for companies in this situation. The business gets the new staff they require, but don’t have to deal with things like payroll accounting, record keeping, and benefits allocation that typically come attached to hiring new workers.
The Concept
BPO outsource services sometimes offer this, and it can be useful. The idea is similar to the process of hiring temporary staff to fill out a position, but with a difference in duration. A temporary worker, by definition, is only employed for a limited period. In contrast, offshore staffing companies provide a permanent roster. Whatever positions that the service provider has filled up are considered filled unless the provider vacates them. In essence, the employees are not hired directly by the company, but by a “middle man.” The service provider handles all of the paperwork and technicalities, while the client company benefits from the employee’s skills and experience. The client has the option of being an active participant in the hiring process.
The Benefits
Offshore staffing may seem daunting, but IT outsourcing is a fairly common practice, and more companies are taking advantage of it. The client company enjoys an alleviation of financial resources, since it no longer has to spend on recruitment costs. The company also stands to save on salaries and benefits, which the service provider is expected to handle. Health benefits and medical insurance can often be easier to negotiate because the provider handles a large amount of employees from various companies. The client company can also save time, because the leasing organization handles the performance reviews and evaluations.
The Costs
Client companies usually go for offshore staffing because it eliminates the need for accountants and human resource management. However, that does not mean that choosing to go with a Philippine outsourcing provider is without cost. The leasing agency charges fees for its service, which includes a sizable amount to cover the cost of the recruitment and hiring procedures. Some agreements also have the client companies paying the wages of the staff, rather than the service provider. Typically, the cost of the fees charged by a provider is still much lower than if the client had hired those employees on its own.
Offshore staffing is not the perfect solution for every company, but it is a viable and financially sound choice for hiring employees in bulk. There are some issues with communication, but these can be fixed with modern technology. Overall, it is a good option if a company needs to expand its staff, but doesn’t have the financial stability to really take the risk.