Partner With A BPO Or Hire Direct. Which Is For You?
Published: April 20, 2022
The BPO company and freelancer sites have different business models. But both can drive home amazing results. Once you’ve overcome any misconceptions you may have heard about outsourcing: the next step is to decide. BPO or hire direct?
Two weeks ago or so, I came across a post on LinkedIn that I took exception to. It was a post that was desperately trying, for whatever reason, to discredit the BPO industry of the Philippines. An industry that employs well over 1.2 million people and offers them benefits and stability.
It’s a shame that they feel the need to actually discredit the industry itself. Posts like these further feed into the misconceptions about the practices of the BPO industry and the opportunities and benefits our agents receive. They also downplay the amount of legwork legit entrepreneurial-minded, direct-hire Filipino freelancers have to do in order to stay compliant and be successful.
It’s no secret that outsourcing itself has always had a negative undertone in some circles in western businesses. They want to view offshore outsourcing as evil and prophesied that it will be to blame for the collapse of the entire economy.
In other circles, it’s seen as a great way to push production, provide an exceptional customer experience, and at the same time keep control over prices and overhead. These business leaders understand the value of offshore outsourcing. They know that to keep prices low for the consumer and provide even more local jobs through growth, they must bring on high-quality staff and still keep overhead under control. Offshore outsourcing provides these benefits.
Outsourcing is No Different Than Trading Between Countries
Before we begin, let’s take a quick look at what outsourcing really is. Specifically, offshore outsourcing.
Offshore outsourcing is the exchange of services done with an offshore professional or team of professionals for compensation. In most cases, that means cold hard cash. Basically, western companies pay a certain rate to have certain tasks performed by Filipino talent.
So, this exchange is a trade. And trading has been going on for centuries.
A study from Harvard University on outsourcing states: “There is a fundamental misunderstanding about trade in general. For years, there’s been a temptation to somehow think that trade is zero-sum, that when some country benefits from trade, we must be losing from trade.” The study also goes on to explain how the U.S. economy has benefited from outsourcing. It’s worth a read.
Incidentally, in relation to the above mindset, there is a commonality among some people that companies who earn or have money are bad. Some people will lead crusades to completely destroy and bash the successful, focusing on discrediting how they were able to reach their goals. In their minds, if there is a winner, there must always be a loser. And anyone who goes into business and makes a profit must in some way be unethical.
Then these very same people will turn right around and get on LinkedIn and talk about ways to. . . what? Turn a profit!
The BPO and Exploitation
There is another common thought among Westerners that the Philippines exploits their own. That the BPO industry is a collection of “sweatshops” and there are no regulations. Being a Westerner myself, I am aware of the “sweatshop” stories we always hear about in third-world countries like the Philippines. Stories that are simply not true.
In fact, the Philippine government is more employee-centered in business regulations than any western country that I am aware of. Almost to a fault. Workers here have more voice, more rights, and companies are regularly audited to make sure this type of exploitation does NOT occur.
BPO VS. Hiring Direct
There are two ways an entrepreneur or a brand or company can outsource to the Philippines. One is to partner up with a BPO agency like Telework PH, and the other is to hire freelancers directly.
Both have amazing benefits, and both can bring great value to any organization. You’ll just have to decide for yourself which one is the best fit for you.
Let’s take a look at both, and the ways that they differ from each other. Then you can decide for yourself which one is better for your business model.
One way that a business leader or entrepreneur can outsource to the Philippines is by hiring a freelancer directly. There are certain platforms that you could go onto and find individuals who can work in the field that you are looking to fill.
On these platforms, freelancers will post their resume, their skills, and what types of positions they can do. For a small monthly fee, you’re able to browse through and read through the different freelancers that have posted there.
There are of course pros and cons to this.
Websites like OnlinePh.com or Upwork or Freelancer.com can be a great way to find top talent. However, there is no pre-vetting and you’ll have to be extremely careful with whom you hire from these sites. It’s important to ask for references or a portfolio so that you’re able to actually see what work they have done in the past.
These websites also have a search feature with filters so that you won’t have to browse through all of the resumes but through certain keywords, you can search and find the people who you think might be a good match for you. So you have to be ready to take on this heavy lifting. It will be up to you to schedule the interviews and do any kind of background check on social media or other platforms.
What attracts a lot of entrepreneurs and business leaders to these websites is the fact that there are cost savings involved. Since you’ll be paying the freelancer directly, you’ll be able to get a highly-skilled freelancer for a fraction of what you would pay someone locally.
Is The Freelancer Then An Employee?
The answer: No. You cannot employ somebody in the Philippines from abroad. So when setting the salary for your freelancer and making that agreement please keep in mind that they will have to pay their own taxes, provide themselves health insurance, and they won’t be receiving a lot of the perks and benefits that they would be getting if they worked at a BPO.
These sites are directed toward Filipinos who are legit freelancers with an entrepreneurial mindset. They themselves are ready and willing to take on the challenges that come along with running your own business.
You’ll want to make sure that your freelancer is prepared in times of emergency. Here in the Philippines, there are frequent typhoons and what we call “brownouts” where the electricity goes out for a short period of time. Most legit freelancers will have a backup internet and generator so that they can remain productive in these unfortunate events.
Also, you’ll want to ask your freelancer what their plan is should their computer or laptop break down. These are important factors to discuss with the freelancer in order to make sure that productivity doesn’t get compromised.
Outsourcing With A BPO
The term BPO stands for business process outsourcing. Which is precisely what it is when you partner up with a BPO company. You are outsourcing your business processes such as back office operations, data entry, social media management, customer support/service. As with the freelancer, any position that doesn’t require a physical presence and can be done online, can be done through a BPO partner.
However, the BPO company’s business model differs greatly from that of the websites where you’ll find freelancers. With a BPO, a lot of the heavy lifting is done for you. For instance, the BPO will handle sourcing the right people or candidates to fill the position based on your requirements. Sometimes that could mean that they will only accept one out of every 200 candidates that are interested and working with you.
The BPO partner will handle all of the background checks, previous employment verification, English tests, typing tests, and other assessments that may be pertinent to the role that you wish to fill. This pre-vetting process saves you time and will ensure that you.
Then they’ll set up a time for you to interview the candidates after you review their profiles that are sent to you. You choose which agent or agents you would like to work with, then we set a start date. We, as the BPO partner, set up the communication channel. Our IT team makes sure the programs needed are installed properly, and our HR and payroll departments set them up with all the needed logins for the payroll system. And of course, for their benefits. . .which we take care of.
Also, the BPO partner handles paying the agent or agents. You just pay one monthly invoice based on the hours worked. Every thirty days you’ll get an invoice and a copy of the agent or agents’ official timesheets, verified by your account manager.
The BPO Manages So You Don’t Have To
It can be a real drag to have to keep tabs on your offshore virtual assistant or team. Watching their attendance, KPI’s, or other metrics can be more time-consuming if you just did it yourself. That’s another benefit of using the BPO. They monitor these metrics for you and this is something that you won’t get when hiring directly from a freelancer website.
With a BPO partner, you can enjoy the benefit of workforce management and an account manager that will keep an eye on the overall performance of your agent or agents. If you’re building a large team, then it’s best to bring on team leaders and an operations manager. However, they will still fall under the umbrella and support of the BPO and will be managed accordingly.
But this doesn’t mean you lose control. On the contrary, as our partner, we work together toward your goals and vision. When we build your team, they become an extension
The Choice is Yours
You’ll have to decide for yourself the best solution for your needs. Many business leaders like to hire directly and do all of the managing themselves. That’s perfectly fine, and we support legitimate Filipino freelancers. However, if you choose to go that route only for the lower cost, there is the possibility you’ll end up spending more time and money on sourcing, training, and even replacing agents until you find the right fit.
You’ll get more support when you partner with a BPO. To not pull any punches, you will, in most cases, pay more than hiring directly. But with the benefits, time saved, and the high quality of the agents we source, you’ll see it’s more than worth it.
To read a bit more on the subject, find out here Why The Best VA’s Work For A BPO Rather Than Freelance. Here it explains all the benefits and peace of mind the agents get when they work with a company like TeleworkPH.