Employee Outsourcing Services: Balancing Quality and Cost Effectiveness

Are you looking to scale your business without stretching your budget too thin? Every company wants more but not every company can afford it the old fashioned way.

Building your dream team is expensive.

Between recruitment costs, training time, benefits, office space and payroll administration, the overhead costs can add up fast.

But, here’s the good news…

Outsourcing your employee services is one of the most effective ways to save costs and scale your business. You get to enjoy top talent while also keeping your business overheads low.

This guide will show you exactly how to save money and also gain access to top talent all while outsourcing the work!

Table of Contents

1. What Are Employee Outsourcing Services
2. Top 5 Reasons To Outsource Employees
3. Keep Your Costs Low: Employee Outsourcing Saves Money
4. Access To Best Talent: Hire Outsourced Employees
5. Stay Focused On Business Goals: Outsourcing Takes Care of Routine Work
6. Be Flexible and Scale On Demand
7. Do You Need Outsourced Employees
8. FAQ’s About Outsourcing Employees
9. Wrapping Up

What Are Employee Outsourcing Services

Employee outsourcing services involve partnering with a third-party provider to manage certain business functions, instead of handling them in-house.

This can be anything from payroll and HR to recruitment and administrative support. You can also engage with EOR services that will act as your legal employer in different locations.

Let’s look at the easiest way to visualise this.

You as the business owner focus on what you are good at, and the outsourcing partner takes care of everything else.

Business outsourcing is becoming more and more popular.

80% of executives say they will maintain or increase their investment in third-party outsourcing, according to Deloitte’s 2024 survey.

The primary reason for this is that many companies realise they can access highly skilled talent and world class expertise without the huge overhead of trying to do everything on their own.

Top 5 Reasons To Outsource Employees

So what are the reasons why employee outsourcing services are so great for your business?

It’s a no-brainer really.

You get significant cost savings. You get access to top talent without having to worry about on-boarding. Your entire business team can focus on what they are good at, and the outsourcing partner takes care of the rest.

But let’s break down the top 5 reasons a little more in detail…

Keep Your Costs Low: Employee Outsourcing Saves Money

This is the one we have all been waiting for.

A number of studies and research have consistently shown that outsourcing can result in significant cost savings. The primary reason being that you do not have to spend on things that you would otherwise do yourself in-house.

Office space, hardware, software, recruitment, and HR are some of the top categories you save on when you outsource. A recent report indicated that on average organisations can save 27.2% on HR outsourcing.

Just think of all that money you can put back into growing your business.

Access To Best Talent: Hire Outsourced Employees

If you have been trying to hire for your business, you would know how frustrating it can be at times.

As per a recent ManPowerGroup study, 74% of employers have difficulties hiring skilled talent.

One of the biggest advantages of employee outsourcing services is that you get immediate access to the right skills without any hassles. The third-party partner you outsource to does all the leg work, and you skip right to work.

Stay Focused On Business Goals: Outsourcing Takes Care of Routine Work

Most of us don’t realise this, but, for every hour that your in-house employees spend on routine admin work, it is an hour taken away from working on actual business goals.

The more you can focus your entire business team on what they do best, the better.

This can be true for any business, from customer support to sales to marketing, and more.

When you outsource your employees you also take a load off their shoulders. They can focus on revenue-generating activities and spend less time on housekeeping.

Be Flexible and Scale On Demand

Business needs constantly change, and employee outsourcing services allow you to scale up or scale down almost on-demand.

If you need additional support, just let the third-party partner know, and they will send you more manpower. If things get slow, you can scale back your team too.

It is that easy.

If you don’t like the people you have outsourced, it’s easy to make the change. You are under no obligation to retain any team member longer than you want to.

Do You Need Outsourced Employees

Outsourcing employees can be a strategic choice for businesses looking to scale without inflating budgets. It offers benefits like cost efficiency and access to skilled talent, but it’s essential to weigh these advantages against your company’s unique needs.

Let’s look at some of the most common business scenarios.

You should consider outsourcing when:

• Administrative tasks are consuming too much of your business teams time
• Your business needs specialised skills that your current team do not have
• Your business is growing, and you do not have the internal resources to scale at the same pace
• You want to reduce your fixed overhead costs
• You are finding that dealing with compliance and regulations is starting to become too much work for your internal team

You should keep things in-house when:

• The function is core to your competitive advantage
• You want to retain full control over the process
• Confidentiality requirements are extremely high
• The learning curve for outsourcing will be too high

FAQ’s About Outsourcing Employees

Can you outsource an employee

You can outsource employees through an employer of record (EOR) or other similar company. They will act as your legal employer in the country you want to hire in and manage things like payroll and HR.

How do you outsource an employee

The best way is to find an employer of record in the country you want to hire in. You set clear expectations with them, and they take care of everything else. You can also directly hire an individual or team in other countries as well.

Is it cheaper to outsource employees

Yes, outsourcing is cheaper than hiring employees directly in-house. You avoid all of the overhead costs, from office space to recruitment to HR functions, and more. This typically results in cost savings of at least 25% on average.

How do you outsource an employee in the Philippines

There are two ways to outsource an employee in the Philippines. You can partner with a local employer of record in the Philippines, or you can directly hire a person or team there. Both work well, just find the best option for your business.

Wrapping Up

Employee outsourcing services offer the ultimate solution to scale your business without stretching your budget. Not only do you save money on employee recruitment, training and overheads, you can also gain access to the best talent in the world.

Here are the key takeaways once again:

• Outsourcing helps to cut costs in your business in multiple ways
• You can get access to the best talent without worrying about HR and on-boarding
• Your entire team can stay focused on revenue-generating activities
• Your business will become more flexible and agile

Outsourcing employees is now becoming the norm rather than the exception.

Business leaders are realising that they can compete at a global level and still keep costs low through smart strategic moves like outsourcing.

The trend is there to see.

Don’t miss the boat.