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‘Outsourcing’ has become a buzzword, especially in an environment of cost cutting and when remote working has become the new normal. Businesses and sole-preneurs are increasing tapping tools and processes that enable a distributed workforce and higher levels of operational efficiency. At Crossworks, we provide remote hiring services to help your company build and manage a digital remote team. That is actually a subset of outsourcing in the general sense of the word, but quite different from BPO (Business Process Outsourcing), a term that some may have heard floating around quite a bit. Here are the 5 main differences between BPO and remote hiring:
1. Process vs People
BPO focuses on the task/process that a company or entrepreneur requires done, this may include organising calendars, data entry or design related services. The modus operandi of BPO companies usually involves hiring a pool of staff and a handful of project managers that assign work to these employees from a large number of clients. On the other hand, remote hiring is always company specific, where talent is matched to the company based on the provided job description and requirements. The focus here is on people and the individual talent(s) ability to contribute as a digital team member to the organisation(s) wider objective. Companies who adopt a long term view are also incentivised to develop the skills of these talents and grow together with their employees. A team-based approach can and should also be taken as employers seek to find a talent pool of individuals with complementary skill sets to increase the likelihood of business success.
2. Project vs Progression
BPO is incredibly good for one-off assignments that have fairly standard requirements, such that the offshore team is able to grasp the task at hand and quickly deliver based on the specifications provided. These ‘projects’ can cross different industry verticals or job functions from doing translation/transcription, cleaning up data or retouching images. Remote hiring is usually more suitable for companies looking at fulfilling a particular role and having another team member who understands the nuances and processes internally to consistently execute the work assigned. Examples of such roles include CMS management, social media marketing, video editing or technology development- these functions usually require some level of cross-functional collaboration or brand-specific knowledge. Role definition
3. Turnaround times
As a result of the first two differences, BPO outfits usually suit non-urgent and non-time sensitive tasks better. Having an additional project management layer means more time and a possible ‘loss in translation’ between the product owner within the company and the individual working on the project implementation. Besides the decreased ‘back and forth’ that companies would benefit from hiring remote talents, they can also organise and prioritise the work schedule in a more predictable fashion because each individual is only working for one company. In the case of a BPO company, a situation that might arise (especially with smaller outfits), is when work comes in from multiple companies in quick succession, and projects may be delayed due to the surge that is within no control of the company that requires the work done. The flipside is also true, that time should be factored in when it comes to training/onboarding remote hires and integrating them into the team- this will not be required to the same degree with a BPO outfit.
4. Cost structure
Remote hiring costs are fairly straightforward, usually involving a one-time recruitment fee and a negotiated monthly salary and management fee. The management fee structure may include a percentage of the negotiated salary, but in our case at Crossworks, we do not take any percentage of the talent’s pay. We believe in a transparent, fair and fixed fee that helps us to cover our operational costs in line with the value we are providing through the provision of a desk space, workstation, amenities (electricity, internet, water, pantry) and human resource management (payroll, attendance and leave). BPO costing usually will depend on the scope and scale of the operation required, and might be charged either as a fixed subscription or retainer, or have a ‘per project’ or ‘per hour’ costing. A remote hire usually attracts employee benefits and increment expectations, just like hiring another team member locally, whereas BPO outfits will usually factor in these costs in their operations before creating a price for companies that includes their project management fees and profit margins.
5. Role definition
Using a BPO service often requires very specific and defined deliverables and responsibilities, but of course this depends on the way the contract/agreement is structured. Startups or smaller organisations or even enterprise companies might have less-defined job scopes that evolve or change based on the business climate- to which they might be better served through engaging remote hires that are similarly flexible and open to change/learning new things. In the case of a contract for service arrangement with a BPO outfit, the terms might need to be updated, or even cancelled in the event where they no longer remain relevant. On the other hand, because remote hiring is focussed on the individual and there isn’t as many layers between the folks actually doing the work and the ‘task masters’, a mutual agreement may be reached when a particular job function may no longer be relevant or in need of redesign. Simply put, remote hiring offers greater flexibility to the employer in assigning tasks and might better suit smaller and more agile companies or those who do not have well defined tasks that a BPO would usually prefer.
Aside from cost savings, any kind of outsourcing also provides one with local knowledge and a new lens that can help organisations to gain a new perspective of their workflows, products or services. If market access is on a company’s radar, remote hiring can also be a potential landing pad for businesses to access whether there is a product-market fit, or even as a means to access potential collaborators before making an investment in the market. There are merits in both BPO and remote hiring and even times where it may not make much of a difference to adopt either one or the other. What employers should NOT do is to simply disregard these solutions or say ‘I don’t have time for that’. In today’s post-Covid world, not catching on to trends like outsourcing will put any business at a comparative disadvantage to their competitors who are doing so. In a nutshell, depending on a company’s needs and goals, employers should either adopt BPO, remote hiring or a combination of both, to increase the efficiency of the organisation or provide expertise in areas that a company does not yet have.
If you are interested in remote hiring from Myanmar, don't hesitate to drop us an email at hello@crossworks.info and we will be happy to take the conversation forward. You can also schedule a call back on our website!