Many companies are outsourcing these days to find specialists and grow their market reach. But when it comes to managing your outsourced workforce, you have two key options: Employer of Record (EOR) and Business Process Outsourcing (BPO). Choosing the right partner depends on your specific needs and priorities. These are two different ways to handle your outsourced workforce, each with its own advantages and considerations. 

Let’s break down EOR vs. BPO to help you decide which is the better fit for your needs.

Employer of Record (EOR)

An EOR acts as a legal employer for your outsourced workforce. They take care of all the payroll, taxes, benefits, and onboarding stuff for your remote team. This lets you focus on finding great talent anywhere in the world, without the headache of dealing with all the burden of HR tasks, especially in new places (abroad).

Advantages of an EOR:

• Reduced HR workload. Offload administrative tasks, allowing you to focus on core business activities.
• The EOR ensures adherence to local labor laws and regulations— compliance is covered.
• Recruit experts globally quickly without establishing a legal entity in a new location.
• Easily scale your team up or down as your needs evolve.
• The EOR assumes legal responsibility for employment-related matters.

Potential drawbacks of an EOR:

• EOR regulations in some countries may restrict things like employee contracts, tenure limits, and the types of work they perform. While this can limit your flexibility, it also ensures you are following labor laws and remain compliant.

Business Process Outsourcing (BPO)

A BPO provider focuses on outsourcing specific business processes. They handle specific jobs your company needs to do, like customer service, data entry, accounting, or even marketing. They’ve got the whole set-up with people who can knock those tasks out well.

Advantages of a BPO:

• Leverage a BPO’s specialized skills and experience.
• BPOs often have standardized processes to ensure work.
• Free up resources to focus on your core business functions.

Potential Drawbacks of a BPO:

• You may lose control over the work processes and employee management.
• The BPO’s staff might have a different level of expertise or familiarity with your company than in-house employees.
• Sensitive data may be accessed by BPO employees, which introduces potential security vulnerabilities.
• Time zone differences and cultural gaps can hinder communication and overall collaboration.
• Integrating BPO processes with your existing systems could be challenging.

Choosing the right path: EOR vs. BPO

Before embarking on your outsourcing journey, consider the following factors:

1. How much you’re willing to invest in outsourcing services?
2. Are you looking to outsource a small team or a large-scale operation?
3. How much control do you want to retain over your team and processes?
4. Do they have robust security measures to protect sensitive your sensitive data?

The decision between EOR and BPO boils down to what you’re looking to outsource. 

Go with an EOR if you want to simplify hiring abroad; it can give you access to global talents with targeted expertise that can help you with your specific needs, by letting you skip setting up a legal entity. Also, if you need help with stuff like payroll, taxes, and getting your remote teammates set up. It’s the perfect option if staying compliant and freeing up your internal resources are your top priorities. You’re still the boss, but not with the HR paperwork. 

BPO is your go-to if you want extra hands with tasks like customer service, data entry, marketing, IT, etc. It’s a good solution if getting help and freeing up your internal team are your main priorities.

If maintaining control over the day-to-day of your team and processes is your priority, an EOR might be a better fit. But keep in mind, that an EOR may not offer the same process optimization as a BPO.

Not sure which is right for you? Why not find a partner who can give you the best of both worlds? Choose an organization with tailored services that can offer you and your business the convenience and efficiency of handling the HR stuff for your remote crew (EOR) while also enjoying the resources of tackling specific business processes and streamlining things (BPO). Why not choose Filta?

Filta is a global workforce organization. We offer an employer of record service, but we also help businesses outsource specific business processes to experts anywhere in the world. Through our tailored services, we can provide our clients with exceptional solutions to their specific needs. 

With the client and their employees in the center, we wrap them with different combinations of service throughout their journey with us, depending on their needs:

• FiltaRecruit – We’ve been in the global recruiting game for decades. That means we know our stuff and can help to connect you with the perfect hire for your company, no matter where they live— down the street or across the globe.
• FiltaEmploy – Our Employer of Record (EOR) service takes care of all the legal stuff, from compliance to payroll and HR. This means you and your team can focus on what you do best: focusing on work. We basically handle the nitty-gritty stuff so you don’t have to.
• FiltaEquip – Need anything for your remote crew? We can get that sorted! We’ll find the equipment and facilities you need and have it delivered straight to your employees. 
• FiltaEngage – This is our community wellness service. Since remote work has become the new normal for some, we make sure that your remote team members are connected, supported, and taken care of, to secure their productivity and efficiency.
• FiltaAdvise – Through consultation and education, we can guide you through the process of effectively managing remote teams to achieve their business goals.

Filta can help you achieve your goals without being torn between choosing one over the other.

Once you’ve  made your decision, ensure a successful partnership by:

• Establishing a Service Level Agreement (SLA) outlining performance metrics, communication protocols, and dispute resolution procedures.
• Maintaining regular communication to ensure alignment on project goals and address any concerns promptly.
• Track your partner’s performance against agreed-upon KPIs to ensure they deliver value.
• Building a strong relationship by treating your partner as an extension of your team, and maintaining trust and collaboration.

Outsourcing can be a game-changer, but picking the right partner is key. Here’s the thing: EOR and BPO can be the two sides of the outsourcing coin. Understanding what each offers will help you navigate this adventure smoothly.

The best route depends on what you need most. Need control over the team? Looking for someone to handle payroll headaches? Even a mix of both can work!

Just keep in mind your budget, how complex the work is, how much control you want, and of course, security. With a good plan, clear communication, and a solid partnership, outsourcing can be your fuel to business success!

Do you still need help with making your decision? Reach out to us at www.filtaglobal.com and let’s discuss your needs!