So, what is outsourcing?
The purest definition of outsourcing is transferring tasks that could be carried out by your own employees to be completed by the employees of another organisation. Examples of outsourcing are outsourcing IT support functions to Managed Service Providers (MSPs) or having another organisation take care of your payroll.
Think of outsourcing as simply asking specialists in another company to complete tasks that (for a variety of reasons that we’ll cover) your internal teams may not be best placed to support
You’re probably already outsourcing…without realising it. There’s little difference between outsourcing and sub-contracting.
Almost every organisation sub-contracts tasks. From maintenance of heating systems to website builds. From cleaning the office to building components for machinery.
Your mobile ‘phone may be branded ‘Apple’ or ‘Samsung’, but it’s probably manufactured by a subcontractor in China. Foxconn is Apple’s key contract manufacturing partner in China and Taiwan, making over 95% of Apple’s products. Why? China has access to lower average salary costs vs. manufacturing in the USA because China has access to a quality pool of manufacturing talent.
Reality? Outsourcing and sub-contracting are the same thing. The subtle difference is outsourcing is often used to describe sub-contracting office-based service tasks rather than manufacturing-based activities. As such, time zones and language skills play a great part in selecting the right partner. Yempo is a specialist outsourcer (sub-contractor) that provides quality, Philippines-based, English-speaking, accountancy and IT talent to small and medium-sized clients based in Australia, the USA, New Zealand, Canada, and the U.K.
Why outsource? What are the benefits?
The reasons to outsource service-based activities are the same as those that drive the subcontracting of manufacturing processes.
Outsourcing services allows organisations to benefit from much lower average salary cost vs. in-country hires while also gaining access to a quality pool of talent that can fill in-country talent shortages.
“Excellent English and shared time zones make working with our Philippines-based team very easy”. – Warwick Matthews, Compliance Data Lab (Yempo client)
Other key outsourcing benefits include:
Enabling small and medium-sized organisations to rapidly scale while keeping key business leaders free to pursue growth activities. Many of Yempo’s entrepreneurial clients have built their business models around an outsourced talent model.
Freeing capital for growth activities that would otherwise be tied to paying salary costs. Outsourcers often provide very flexible models that allow clients to flex and grow their talent needs. The advent of SaaS cloud-based technology to support accountancy and IT activities has greatly reduced the need for talent to be in a specific location. The recent pandemic has demonstrated that remote working is both highly effective and efficient.
Creating competitive advantage vs. purely locally based competitors. Assuming a company selects an outsourcing partner that can provide talent that’s equivalent to in-country hires, then this company will have a substantially lower cost base than rivals. This can result in winning more bids and generating higher margins.
Allowing organisations to remain centred on their core activities, while necessary support activities (which can include accountancy and IT activities) are completed by an outsourcer.
Is there a ‘halfway house’ between offshoring and outsourcing?
Yes, there is. Yempo’s model is different to most other outsourcers. The accountancy and IT talent we provide is employed by Yempo but selected by and dedicated to specific clients. Clients can build one team across their in-country and Philippines based teams. We take care of recruitment processes, HR, payroll, compliance, technology provision, offices. You pay a transparent, monthly, invoice that’s issued in your currency.
“You don’t just get given people – we recruit for our own team even though, technically, team members work for Yempo.” -Andrea Harris, CFO, Powertech (Yempo Client)
Like hiring in-country
Yempo’s clients describe adding talent to their teams with us as ‘like hiring in-country’.
Our focus on employee well-being provides clients with peace of mind that their offshore team members enjoy similar working conditions to their local team members. That’s why we’ve built an end-to-end process that frees clients to focus on their own business, not the business of employing talent overseas.
It’s why Michelle, our Aussie CEO, lives in the Philippines. All clients can contact her and gain her advice (which they love). Michelle and our local experts are always ready to offer a guiding hand to those unfamiliar with outsourcing.
That’s why we only recruit talent that clients rate as good or better than the talent that they can hire locally.
Thank you for visiting our blog! We hope you found our content informative and engaging. Stay connected with us for more insightful blogs, updates, and tips on outsourcing IT & outsourcing Finance in the Philippines, or shoot us an email at [email protected]. We are happy to answer your questions!
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