Staff leasing vs. full outsourcing: offshoring to the Philippines
Offshoring to the Philippines is now considered the preferred outsourcing model for companies in the United States, Canada, Australia, Singapore and Northern Europe. SMEs to Multinationals see this as practical move because of the country’s deep talent pool, solid infrastructure, varied employee technical skills, and high English proficiency.
Historically, companies preferred full outsourcing to business process management providers in the Philippines. However, other foreign companies decided to incorporate and set up their own back office operations in the Philippines which are known as captives.
The emergence of another offshoring/outsourcing option called Staff Leasing now gives companies a cost-effective and quicker alternative. Staff Leasing gives you better control of your offshore team because you work with employees which were shortlisted by the Staff Leasing company then interviewed and accepted by you, not incumbent ones from the service provider.
Full outsourcing completely manages the outsourced business function, such as HR & Payroll Management, using the providers CRM and other systems but has a lengthy timetable for execution and is the most expensive offshoring option available.
| Staff Leasing | Full Outsourcing | |
| Setup Time Frame | Provider can start sourcing candidates as soon as contract is signed | The provider needs to set up alignment meetings first since the client needs to approve their systems, processes, tech, etc. |
| Employee Selection Process | The provider conducts end-to-end candidate selection with strict guidance from the client, from screening up to semi-final interview | Clients work with employees under the outsourcing firm and often deploys management from the head office to the outsourcing provider’s office |
| Inclusion in Administrative Activities (for employees) | Employees can address their concerns to both the provider and the client | Employees answer primarily to the outsourcing provider |
| Length of Integrating Business Functions | 2 weeks (min) – 3 months (max) | 2 months (min) – 5+ months |
| Main Differences |
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Staff leasing
Staff Leasing is an efficient and affordable offshoring/outsourcing model that provides you with extensive control over your offshore staff. Here, you enlist the services of a Staff Leasing provider to handle the screening and hiring process.
Staff leasing steps
- The client meets and discusses their requirements with the service provider
- The provider creates a proposal/agreement based on the meeting
- The provider begins the sourcing and recruitment process
- The staff leasing company screens qualified candidates for final interview with the client
- The provider hires the client’s preferred candidates
- The provider provides leased employees with private office
This outsourcing service helps companies save up to 70% on payroll while boosting productivity, making it the ideal choice for companies of all sizes that want to offshore jobs to the Philippines. This cost-efficiency and control over candidate selection makes Staff Leasing an effective business solution.
Full outsourcing
Full Outsourcing completely integrates any enterprise function of a company to an external service provider. Because the service provider handles every aspect of the outsourced activity, clients can allocate more time and attention towards the profit generation. But full outsourcing is expensive, provides little control over employees, and has lengthy timetables.
Outsourcing an entire operation to another company can take months of preparation, proposals, document reviews and calibration, so it is not an ideal option for a company that needs leased staff immediately.
Which method is better?
While Full Outsourcing can completely manage an aspect of a company’s operations, Staff Leasing is the superior option. Full Outsourcing can take away non-critical business activities from you, but at the highest outsourcing cost model.
Long processes and higher costs are inherent in full outsourcing, but are rarities in the Staff Leasing model. It is also more practical that you can choose the candidate, compared to complete outsourcing where incumbent employees are responsible for carrying out specialized and complex tasks.
Overall, Staff Leasing provides less risks, added control, and more value for you if you want to get your feet wet with a back office and offshore team in the Philippines. Completely outsourcing tasks to another company can be beneficial, but if you want quality output that’s more affordable with better control over your employee, Staff Leasing is the offshoring method for you.
Independent
