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It’s not just the workload that’s killing your human resources (HR) department, but also inefficiencies brought by manual processes and poor technology integration. According to Deloitte’s Modernizing HR: Design Thinking and New Technologies to Help Enhance Employee Experience, cited by Deel, administrative tasks consume 57% of HR employees’ time.
As a business owner and employer, this is deeply concerning. The time spent on mundane administrative tasks (like benefits administration, payroll, and performance evaluation) can be used for high-value HR initiatives and business needs. Fortunately, many of these administrative tasks can be automated. But to do so, you need the best human resource outsourcing solutions.
Human resource outsourcing solutions are every HR professional’s best friend. These technologies transform your HR department into an efficient powerhouse that enhances the HR and employee experience.
This article walks you through the definition of HR outsourcing solutions, followed by a round-up of the best human resource outsourcing solutions. We also included a guide on choosing an HR outsourcing software solution for your business. Without further ado, let’s begin.
Human resource outsourcing solutions are software and platforms that optimize HR services for speed, efficiency, and compliance. These programs enable smoother HR and employee management through cloud technology, automation and AI-powered tools, data analytics, and app integration, allowing in-house HR professionals to focus on core HR needs.
Human resources outsourcing companies provide these software solutions to help clients gain access to cutting-edge HR platforms without the upfront cost of new technologies and software upgrades.
The best human resource outsourcing solutions promise long-term competitive advantage. Check out our round-up of the best HR software solutions below:
Developed in the Philippines, Sprout HR is one of the top human resource outsourcing solutions designed to streamline HR services for all workers.
Boasting end-to-end HR solutions, this award-winning HR software promises comprehensive, AI-powered support for every HR need — whether it’s candidate sourcing or professional development. Sprout HR is ideal for companies looking to modernize their HR services with an all-around platform.
With its Pulse tool and Wellness program, HR professionals can gather employee feedback and help employees prioritize their physical and mental health, respectively.
ADP Workforce is an industry-standard platform used by KDCI Outsourcing to support a wide variety of HR needs, including HR reporting, payroll, talent acquisition, and workforce management.
Designed for companies of different sizes, including medium- and large-sized businesses, this technology provides owners of medium- and large-sized companies the efficiency and flexibility they need to manage and improve workforce performance across all departments.
Pros:
BambooHR is a highly praised HR software solution that seamlessly integrates all HR services into one user-friendly platform, promising a 65% efficiency boost and saving HR professionals 18 hours on HR tasks weekly.
Ideal for differently sized companies, this software solution scales and meets your HR needs as your business grows.
Pros:
Greenhouse is an innovative hiring platform that delivers high returns on your recruitment and hiring efforts, averaging a 589% ROI within three years. With features that minimize hiring biases, this platform is ideal for companies wanting to spearhead or enhance their DEI (Diversity, Equity, and Inclusivity) efforts.
Having consistently won awards such as the “Best Software for Enterprise,” Greenhouse stands as a highly expertised leader in the recruitment field.
Pros:
Workday is a cutting-edge HR software solution that harnesses AI to future-proof your HR department against industry changes.
Trusted by thousands of Fortune 50 and 500 companies, Workday stands as a reliable platform for driving enterprise-level innovation, boosting operational efficiency, and elevating your workforce.
Cons:
SAP SuccessFactors is a software solution aimed at companies with a global workforce. Packed with cutting-edge features, it elevates the mundanity of HR services into a more cohesive, technology-driven experience for all employees.
Based in the Cloud, Zoho People is an HR platform designed for businesses that use Zoho and non-Zoho applications. Delivering agility, efficiency, and innovation, this award-winning software offers a comprehensive suite of features and tools that streamline your HR department’s daily workflow.
Your choice of human resource outsourcing solution can either supercharge your HR department or result in a costly mistake. Here are three tips for choosing the right one for your business.
According to human resource employees, professionals, and leaders (43%), HR technology is effective. However, the best human resource outsourcing solutions won’t benefit you if you don’t know your HR needs. To identify those HR challenges and needs, start by gathering feedback from your HR staff.
HR professionals have first-hand experience with workflow inefficiencies and challenges. Hence, they can provide detailed insights into which functions require the most attention. From there, you can establish goals that meet both your HR and organizational needs.
There are plenty of HR technologies available on the market today. Don’t settle on the first HR software you see. Do thorough research on each software’s features, scalability, AI capabilities, user-friendliness, complexity, data security, and cost.
Check detailed user reviews, or even better, request a demo or take advantage of free trials to get a feel of the software. Most HR solutions entail overcoming a learning curve, so maximize your time with it before making a decision.
An HR outsourcing provider is equipped with the best human resource outsourcing solutions. Despite that, look for BPO companies that have software expertise in your preferred HR solution. For example, if you prefer BambooHR, you can outsource HR services to KDCI Outsourcing as the company has employees who are trained and proficient with said platform.
Though cheaper, always remember that the cost of outsourcing in the Philippines (or elsewhere) may include start-up fees and software upgrade expenses.
The best human resource outsourcing solutions address your specific needs. If you hate the idea of investing in the wrong HR technology, it’s time to partner with outsourcing companies that understand your technology and HR challenges.
At KDCI Outsourcing, we have the best human resource outsourcing solutions that deliver not just speed and efficiency, but also enhanced workforce performance, employee engagement, and competitive advantage. From ADP Workforce Now to Greenhouse, we have HR professionals who excel in your software solution.
As your HR outsourcing service partner, we will do everything in our power to level up your HR department with high-performing offshore HR talent and advanced software.
Experience our AI-powered HR outsourcing services today. Contact us for proposals, inquiries, or price quotes!
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Every business needs human resources (HR) — from recruitment to payroll to employee engagement, that’s a long-established business fact. HR services often come at a significant cost, yet another business fact.
But should that always be the case?
Yes, as companies grow, HR responsibilities scale quickly, and with that comes rising costs. For medium to large businesses in the US, maintaining a full in-house HR team can easily become one of the biggest overhead expenses.
That’s why more organizations are turning to HR outsourcing (HRO) to the Philippines as a smarter, more cost-efficient solution.
Truth is, the answer is quite nuanced. HR outsourcing costs vary depending on the provider, scope of services, company size, and even the country where the outsourced team is based. Still, by looking at industry benchmarks, we can provide realistic estimates that business leaders can use to guide strategic decisions.
In this blog, we’ll break down:
By the end, you’ll have a clear picture of the investment required as well as why HR outsourcing could be one of the smartest financial and strategic moves that you can make for your growing company today.
Ready? Let’s get started.
While the default used to be having a full in-house HR department, more and more businesses are now opting to work with an external provider, typically those located in the Philippines. For medium to large businesses that are looking to scale their operations, this is a far more sustainable option — a strategic HR initiative that empowers the team with experienced HR, sans the excessive overhead costs.
Before we delve into the actual cost of outsourcing HR, it helps to understand why several US companies opt to work with HR outsourcing providers in the Philippines. Here are just some of the key reasons:
As most businesses already know, the costs of outsourcing to the Philippines are significantly lower compared to hiring inshore. The same thing applies to outsourcing HR services. Here’s how that looks: while hiring a skilled HR specialist in the US might cost around $3,900 per month, a comparable, highly capable professional outsourced to the Philippines could run approximately $1,500 per month (inclusive of office space, utilities, and equipment). That translates to around 70% in cost-savings for your business.
English is an official language in the Philippines (adopted from Americans), and it is widely used in education and business, ensuring that communication barriers are minimal. This high level of fluency minimizes friction and reduces the chances of miscommunication on complex HR matters like benefits administration, policy explanation, or internal coordination. Furthermore, the strong historical and cultural ties between the two nations mean that Filipino professionals are generally familiar with US business norms.
The Philippines maturity in the BPO industry as a whole translates to a ready supply of specialized HR service providers — from large global BPO firms to smaller, niche specialists — who operate with established, international-standard processes. This environment is supported by mature payroll platforms, rigorous compliance firms, and reliable technology infrastructure, giving US companies confidence that their sensitive HR data are handled professionally.
When working with an HR outsourcing company from the Philippines, a business can rapidly scale its HR team up to handle peak seasons and then scale down just as quickly during slower periods. This ability to adjust capacity efficiently is crucial for operational health. By using outsourced HR services, companies avoid the significant financial and administrative burden associated with hiring and firing costs, including the complex process of recruitment, onboarding, and potential legal issues related to workforce reduction.
While the time difference between the US and the Philippines is substantial (often 12 to 15 hours), this gap can be strategically leveraged. The Philippine team can work in the US evening and night shifts, handling HR administrative tasks, processing payroll, updating employee records, or managing support requests while the main office is closed. This effectively extends a company’s coverage to nearly 24 hours a day.
With all these benefits and advantages considered, working with an HR outsourcing service provider from the Philippines is a clear strategic move for agile and growing US companies looking for both reduced costs and increased operational efficiency.
There are several distinct engagement models of HR outsourcing that define the scope of services, the degree of shared responsibility, and the legal relationship between the client and the HR outsourcing service provider.
Choosing the correct framework is the first critical step in a successful outsourcing partnership, as the model determines whether a company offloads all administrative tasks, shares co-employment responsibilities, or simply outsources one highly specialized function. If you’re looking to outsource your HR, there is generally four options to choose from:
Full-service HRO is a comprehensive model where a company outsources most HR functions — payroll processing and payroll taxes, compliance, recruitment, etc. It’s best for companies that need to offload administrative burden while retaining full control over their dedicated offshore HR team, making it a frequent choice for establishing a team in the Philippines.
The PEO model uses co-employment, where the PEO shares legal employer responsibilities, handling taxes and group benefits. It is primarily used by smaller companies that want access to enterprise-level benefits and specialized compliance expertise they couldn’t otherwise afford on their own.
RPO is focused exclusively on talent acquisition (recruitment). This model is ideal for companies that need to scale quickly or face high-volume hiring needs, leveraging the specialized RPO provider’s dedicated recruiting infrastructure to rapidly fill roles.
This offers the most flexibility, allowing a company to outsource only specific functions like payroll, training, or compliance, or even HR consultancy services. This model is mostly used by small businesses or medium-sized companies to gain specialized expertise or administrative relief in targeted areas while customizing the monthly or annual fee and retaining control over other functions.
Ultimately, the choice of an outsourcing engagement model — whether comprehensive like HRO, co-shared like PEO, or highly targeted like RPO or Specialized Outsourcing — depends entirely on a company’s strategic goals, current HR pain points, and desire for control. With the model selected, the next step is to drill down into the specifics of the partnership.
Now that the engagement models are clear, let’s briefly discuss the specific services that you can get through an outsourcing provider. While outsourcing the entire HR department is a popular choice, outsourcing specific HR services or functions (depending on your business’ needs) is also an option.
To guide you, here are some of the most commonly outsourced HR roles and functions:
As you can see, your business has the flexibility to choose an engagement model and the specific services that perfectly aligns with your operational needs; whether you need a full-service partnership or a specialized, task-based support.
Back to the main point: the ultimate purpose of this strategic delegation of HR administrative tasks is to achieve dramatic financial efficiency. Therefore, the next logical step in any outsourcing decision is to move beyond function and focus squarely on the bottom line. Let's analyze the expected cost reductions by exploring the actual costs of outsourcing HR staff.
As we go through the numbers, keep in mind that these are general estimates from the available data on HR outsourcing. If you want to get a bespoke quote that matches your exact HR needs, feel free to talk to our team at KDCI Outsourcing about your HR needs.
In the meantime, let’s do a focused, ballpark HR cost comparison to establish the true financial advantage of offshore HR staffing. To contextualize how much a company can save through outsourcing services, we’ll first outline how much it typically costs to hire an HR expert locally, in the US.
To accurately frame the savings, we first benchmark the full cost of comparable domestic talent: a mid-level HR Specialist or Generalist in the US typically commands an annual base salary in the range of $70,000 to $100,000+.
When including the additional costs — mandatory employee benefits, health insurance, paid leaves, and retirement contributions — the employer’s (your business) total cost is significantly higher. For private industry workers, total benefit costs average approximately 42% of the base wage, giving you a total of around $98,000 to $150,000 annually per HR staff.
Now, consider the investment required to staff the same HR functions through a Philippine-based HR outsourcing provider:
The full cost per HR staff member in the Philippines (including salary, government-mandated benefits, and the provider’s operational & management margin) generally falls in the range of $1,200 to $5,000 per person per month — depending on the outsourcing provider, the skill level of the staff, and the level of engagement among other factors (which we’ll also discuss later).
Even if you get HR services at the higher end of the range, the HR outsourcing cost total would only be around $60,000 annually per HR staff. As such, by moving the equivalent of these HR functions offshore, your company has the potential to reduce its operational spend on a per-person basis, resulting in a cost reduction of up to 80% compared to having an in-house HR staff.
Again, this is merely a generalized starting point. The final, actual cost will be defined by the specific HR services you prioritize, the complexity of your requirements, and the pricing structure of your chosen outsourcing partner.
Having established the significant financial advantage of leveraging offshore HR talent and detailed the cost benchmarks for specific outsourced functions, the critical next step is to understand how those costs are actually structured and billed.
Here are the factors that will push costs up or down:
The cost is driven by the number and complexity of functions outsourced. Generally speaking, a single, transactional service (say, payroll services only) is the lowest in terms of cost. The price escalates significantly for a full-scope model, which bundles strategic functions like recruitment, advanced compliance, and technology. The more services you bundle, the higher the fixed flat fee or per-employee fee.
Higher legal and operational complexity directly increases the price. Costs rise when the outsourced team must support intricate financial and legal scenarios, such as managing multi-state US payrolls, processing complex variable compensation plans, or ensuring compliance with specialized labor laws. This complexity requires the HR outsourcing providers to dedicate higher-skilled, more expensive resources.
Pro-tip: outsourcing providers typically reward volume. Small engagements (1 to 4 staff) often incur a higher per-employee-per-month (PEPM) rate due to fixed overhead costs. However, once a company scales to 5 or more dedicated HR staff, it starts qualifying for tiered pricing, volume discounts, and bundled administrative rates, which effectively drive the per-person cost downward.
The market standing of the HR outsourcing company and technological infrastructure directly influence their fee structure. Top-tier, global HR outsourcing companies command a premium for their minimized risk profile, robust technology, and comprehensive global compliance. Smaller, boutique providers offer lower pricing but typically present tradeoffs in technology, service redundancy, or global compliance breadth.
The inclusion of advanced technological capabilities introduces recurring supplementary costs. The fees for the utilization, licensing, and management of advanced systems — such as comprehensive HRIS, ATS, reporting dashboards, and workforce automation — are typically passed on to the client using the HR outsourcing services as an additional subscription or technology fee, layered over the base labor cost.
When offshoring to the Philippines, the total operational cost must legally and financially account for fixed local employment requirements. The fully loaded cost includes mandatory employer contributions to the state-run social insurance (SSS), national health insurance (PhilHealth), housing fund (Pag-IBIG), and the government-mandated 13th-month pay. These government-set employee benefits must be calculated and included by the provider in the total monthly investment figure.
These factors, then, would constitute the total costs you have to pay for when outsourcing HR staff. Remember: a good outsourcing provider will discuss all these costs with you upfront so you’re not surprised by hidden fees when the invoices come along.
While we’re on the subject of invoices, let’s talk about how businesses actually pay for outsourced HR services when working with an external provider.
When you partner with an HR outsourcing provider, the costs are delivered through one of several structural pricing models designed to align the provider’s fee with your risk appetite, management style, and scale.
This is the most common pricing model, especially for Employer of Record (EOR) services. The client pays a fixed, recurring service charge for each employee. EOR provider fees typically range from $190 to $900 per employee per month. It offers clear, predictable budgeting for rapidly scaling teams.
In this option, the client pays a single, set monthly retainer or flat fee for a defined scope of service, regardless of minor headcount changes. This is preferred for budget stability, with full-service retainers often ranging from $1,000 to $5,000 per month.
This model is less common for full-scope EOR services in the Philippines but is sometimes used by PEOs and BPO firms for administrative functions. Under the Percentage of Payroll structure, the provider charges a fee that is a defined percentage (typically 2% to 8%) of the total gross payroll they manage for the client.
For non-recurring tasks that fall outside the standard scope, providers will switch to a Project or Hourly Rate basis. This model is used for one-off advisory services such as a legal compliance audit, custom policy design, or specialized consulting. The client pays for the actual time spent and materials used, with hourly rates for general HR support.
Most large engagements use a hybrid pricing model, combining a core PEPM base rate with variable add-ons for specialized services. Crucially, volume discounts are applied as the client scales their headcount, making it the most common and cost-effective structure for a growing offshore team
The pricing model will be decided based on the services you need and the engagement model you prefer. At the end of the day, it’s still about finding the exact HR solution that matches your business’ specific goals — and the framework that will help you achieve them.
Now, we answer the most important question:
The short answer is yes. After all, that’s what the numbers are suggesting.
The biggest, most obvious win, of course, is the cost advantage. We’ve established that labor and operational costs for HR talent in the Philippines are significantly lower than in the U.S., translating to savings of up to 80% per HR staff. This allows you to scale up your support team without completely blowing your budget. That’s an ROI that one can see almost immediately.
However, the longer-term value of HR outsourcing is about empowering your internal team. Think about all the time your current high-cost managers spend on transactional, time-consuming HR administrative tasks like processing payroll, administering benefits, and handling routine compliance paperwork. By delegating this tedious work to a specialized, cost-effective team overseas, your HR leaders are freed up to focus on the things that actually drive your business such as talent retention, cultural development, and strategic planning.
At the end of the day, outsourcing makes the difference between HR being a costly administrative necessity and a strategic tool for growth. And the way we see it is this: any investment towards business growth is always worth it.
You now know the numbers: you can save up to 80% by outsourcing your HR function.
If your business is ready for growth and you need to scale your HR support quickly and cost-efficiently while maintaining total compliance assurance, the question isn’t if you should outsource — it’s who you should partner with.
At KDCI Outsourcing, we specialize in building dedicated HR teams tailored to your business’ needs. From payroll and compliance to recruitment, training, and employee engagement, we deliver solutions that let you focus on strategy while we handle the complexities of workforce management. Whether you need support for specific HR functions or a broader outsourcing partnership, we have flexible engagement models that help you scale with confidence.
Let’s talk about how we can support your HR needs. Contact KDCI today.
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A well-functioning human resources (HR) department is vital for improving productivity, enhancing employee engagement, and reaching organizational goals. Sadly, this is far from reality. HR departments are overwhelmed with pressure to meet employee expectations and stay ahead of evolving regulations and technological advancements.
Although your HR department is your organization’s pillar of support, it can crumble when challenges and issues become too unbearable. As such, there is a growing demand for human resource outsourcing. As of 2024, the market value of HR outsourcing was $42,455.08 million USD. By 2032, its value could amount $68,978.07 million USD.
If you’re looking to jump on the HR outsourcing train, now’s the time to do so. This article tackles the 10 advantages of human resource outsourcing, written in detail to help you envision these benefits.
HR outsourcing can be an intimidating and exciting venture for any business. Before reaping the advantages of human resource outsourcing, let’s take a look at whether this strategy is right for your business:
From access to high-caliber talent to streamlined HR management, HR outsourcing offers plenty of benefits to businesses. Below, let’s explore the top 10 advantages of human resource outsourcing:
Onshore outsourcing HR severely limits your talent pool to your geographic location. If you need specialized expertise, expect higher labor costs that reflect the vast knowledge and experience of high-caliber human resources professionals. On the bright side, what’s great about offshore outsourcing HR is the choice of talent available at your fingertips.
Need an HR compliance officer or a C-level recruitment specialist? The best HR outsourcing companies can provide you with cost-effective, top-performing HR talent who are screened and vetted by expert recruitment teams.
These professionals not only meet your desired qualifications in terms of skills, experience, and knowledge, but they’re also culturally compatible with your organization.
Maintaining an internal HR department gives you better oversight of your team. Though true, labor and overhead costs can soar quickly. The Society for Human Resource Management (SHRM) found that the average cost of hiring an employee is $4,683 USD and $28,329 USD for executives.
This makes ramping up headcount less viable during peak seasons for recruitment, performance evaluation, and compliance. However, outsourcing HR functions to an HR outsourcing provider can slash your labor and overhead expenses by a fraction. Outsourced HR employees are cheaper, which makes workforce scaling a more attainable goal from a financial standpoint.
Outsourcing companies also provide employees with the equipment, tools, and technology to deliver outsourced HR services. Unlike running an internal human resources department, there’s no need to pay for additional rent or utility bills.
Here’s the truth: There’s no “right” time for a technology upgrade. However, leaving upgrades to the backseat for far too long can cost your HR department dearly. Productivity loss, delays, errors, and security threats — all these can undermine HR operations, deteriorate efficiency, and increase your company’s risk of non-compliance.
While an IT professional may provide a band-aid solution, continuously using legacy software can increase costs by 20% to 25% each year. If you’re looking to balance technology upgrades with cost savings, HR outsourcing is your best bet.
Equipped with state-of-the-art HR outsourcing solutions and AI tools, HR service providers can support your department’s HR responsibilities with less financial investment from your end. Plus, it gives your internal HR department peace of mind knowing that they can rely on the provider to secure sensitive employee data.
Efficiency is your HR department’s best friend. Efficiency translates to a smooth workflow and organizational success. Obviously, you won’t achieve these if your HR staff is powering through endless tasks and experiencing burnout.
One of the benefits of outsourcing human resources is boosting operational efficiency. With the help of automation tools, outsourcing companies can streamline repetitive and time-consuming administrative tasks, such as interview scheduling, application tracking, and payroll administration.
In effect, your internal team won’t be slowed down by low-value tasks and can dedicate more time to core business activities.
Organizations mostly rely on HR professionals for compliance. Thus, they shoulder the responsibility for knowing all relevant federal, state, and local employment laws, workplace health and safety standards, and data privacy regulations. Amendments or changes? HR staff need to update themselves — or risk paying a higher price for non-compliance.
According to Globalscape, non-compliance can cost companies an average of a whopping $14.82 million USD (versus the cost of compliance at $5.47 million USD). Unfortunately, internal HR professionals are already overwhelmed with cumbersome administrative tasks. This makes meeting compliance standards more challenging, thus increasing your company’s risk of fines, penalties, and lawsuits.
Working with an HR compliance officer from an external HR provider can help your business avoid compliance issues. Using their knowledge of employment laws, workplace standards, and data privacy regulations, an HR compliance officer can ensure that every business function adheres to legal requirements in your home country.
Because an HR compliance officer has experience with international compliance, they can promise that your organization’s employment practices comply with global labor standards and the country’s local laws.
Nowadays, employees have higher standards and expectations. In addition to fair compensation and attractive benefits, they also want purpose, work-life balance, and a non-toxic workplace.
That’s why attracting the right talent is a challenge in its own right. You need to identify your Employer Value Proposition (EVP), enhance employer branding, improve hiring processes, and prioritize diversity, inclusion, and equity (DEI). One bad hire can cost your business $17,000 USD, so you wouldn’t want to scrimp on recruitment and talent acquisition.
An external HR provider can support your talent attraction initiatives with fresh perspectives and insights into your hiring pipeline. To attract skilled and culture-fit candidates, your provider will employ AI technologies and analytics, refine job descriptions, and improve your employer branding. This reduces the financial repercussions of onboarding ill-fit employees or bad hires.
A company invests in its employees because they are its greatest asset. Competitive salaries, appraisals, attractive benefits, supportive leaders, and an inclusive workplace culture can make employees stay in your organization. But there’s another thing that makes them stay — career growth.
Naturally, employees want to grow their careers and unlock their true potential. This is possible with self-learning and the help of your HR department. But if your in-house HR is swimming in administrative tasks, outsourcing HR is your solution.
Working with an offshore training and development specialist opens your mind to new perspectives and best practices on career development.
Utilizing their knowledge of instructional design and adult learning strategies, your outsourced training and development specialist can design professional development programs that support self-learning, maximize your employees’ potential, and meet organizational goals. As a result, your workforce will perform better and become more productive.
Companies offer a wide range of employee benefits, including medical insurance, paid time off (PTOs), scholarships, and remote work arrangements. Since job seekers look at an organization’s benefits, your own benefits can either attract or repel potential employees. Of course, the more competitive your benefits are, the more likely your existing employees will be happy, productive, and loyal.
Unfortunately, low employee engagement, lack of awareness, and poor employee-HR coordination are detrimental to effective benefits administration. This is where outsourced HR and benefits administration takes the spotlight.
An HR outsourcing provider can integrate a third-party benefits administration software into your system, streamlining benefits enrollment and verification and centralizing employee benefits into an accessible self-service platform. This minimizes errors and gives HR employees more time for core business activities.
Furthermore, outsourced benefits administrators can offer suggestions for designing attractive benefits that appeal to your employees. They can also leverage AI and data analytics to identify trends and tailor benefits according to a staff member’s unique needs.
Payroll processing is a meticulous HR function. While payroll is associated with numbers and calculations, it is more than meets the eye. It’s about compliance, credibility, reputation, and trust. In fact, every payroll error you address sets your company back an average of $291 USD — which can add up if left uncontrolled.
Consequently, payroll mistakes can lead to poor employee satisfaction, inefficiencies, and financial loss. If your company has missed payroll deadlines or faced compliance issues, it may be time to outsource payroll to an HR outsourcing company.
Outsourced payroll specialists can handle the bulk of your payroll, leveraging advanced payroll software to streamline the calculation of benefits, minimize data and calculation errors, and ensure that all payslips are delivered to the correct employee.
These payroll specialists can also help your internal team prepare payroll and annual tax reports on time, so your company avoids fines and lawsuits from non-compliance.
HR management is tough. Companies entrust HR managers with tasks involving compliance, recruitment, talent management, workplace discipline, and performance evaluation. Alarmingly, human resources is a department that’s rife with burnout. Whether it’s excessive workload or empathy fatigue, HR staff and managers also crave support for their struggles.
This is where outsourcing HR management comes into play. With their out-of-the-box perspectives and knowledge of HR best practices, offshore HR managers can assist your in-house managers with developing training programs, enforcing company policies, managing your workforce, and maintaining legal compliance.
Because outsourced HR managers leverage AI, workflow and processes are streamlined to reduce your internal HR management team’s workload. This enables them to focus on high-value internal HR initiatives.
You can reap the advantages of human resource outsourcing by applying these two HR outsourcing best practices:
Choosing a provider is one of the most important steps to take when outsourcing HR. The right vendor has the following:
In some cases, the red flags show up when your offshore HR team is working on a trial project. But don’t let this stop you from finding the right vendor. Know what you want, set your expectations, and keep vetting outsourcing partners.
Outsourced HR services are only as good as the offshore staff behind them. To leverage the advantages of human resource outsourcing, set realistic performance standards and conduct regular feedback sessions.
This way, you can identify areas for improvement, assess your team’s ability to maintain compliance, and help your HR staff reach key performance indicators (KPI). The better your team performs, the more likely you’ll achieve organizational goals.
At KDCI Outsourcing, we can help you achieve the benefits of human resource outsourcing with our world-class offshore outsourcing solutions — carefully tailored to meet your organizational and staffing needs.
We source, vet, and onboard HR professionals who meet your requirements and exhibit values, ethics, and mindsets that mesh well with your organizational culture. With our expertise in automation and AI technologies, we can optimize all HR functions for efficiency and scalability.
Build a dedicated HR team and let’s elevate your HR with KDCI. Contact us for a quotation or proposal today!
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People are the core of every business. This is true in every industry, at all stages of growth, even and especially when AI takes the spotlight in business operations. It’s the employees that drive innovation, execute strategies, and ultimately determine whether a company succeeds or fails.
As such, the process of managing people — your business’ human resource (HR) function — becomes increasingly complex as the organization scales. HR processes tend to expand in scope as the business evolves, from functions like payroll and compliance to recruitment and overall employee performance management. So, what once worked for a smaller team often becomes unsustainable as the business grows and onboards more team members.
The global demand for human resource outsourcing is accelerating exponentially, with a $39-billion current market size that is expected to hit over $57 billion by 2033. It’s because businesses, especially medium to large organizations, are recognizing that outsourcing HR can be an ideal solution for businesses looking to both cut costs and maximize strategic value.
From payroll and compliance management to recruitment and training, HRO provides flexibility and expertise that allow leaders to focus on core business growth. In a highly competitive market, that could be the difference between thriving and being left behind as other businesses in your niche move ahead.
This guide explores everything decision-makers need to know about human resource outsourcing:
By the end, you’ll have a clear framework to make a strategic choice for your organization’s HR future. Let’s get started.
Human Resource Outsourcing (also popularly known as HR Outsourcing or HRO) is when a business delegates some or all of its HR functions to an external provider. These providers are equipped with specialized systems, processes, and expertise that many companies would otherwise need to build internally.
Instead of building large internal HR departments, companies can leverage outsourcing HR functions to cut costs, ensure compliance, and scale operations without compromising employee engagement and experience. Data shows that around 42% of large businesses are currently outsourcing at least one HR function. Because of its nature, this solution is best for medium to large businesses who are currently in a growth phase and in need of an efficient HR department, minus the overwhelming overhead costs.
As you explore outsourcing options, you have probably encountered a number of confusing acronyms — HRO, PEO, RPO. Now, these can sound similar (and they do have some intersections and overlaps), but they function differently. Understanding the distinctions is essential because choosing the wrong model can lead to inefficiencies, compliance complications, or misalignment with the organization’s long-term goals.
Let’s go through them one by one:
As already discussed above, this refers to the delegation of specific HR functions to external HR outsourcing companies while employees remain under the company’s direct employment. The outsourcing partner delivers services such as payroll, benefits administration, compliance management, training, or performance monitoring.
For medium to large enterprises, human resources outsourcing services are attractive because it reduces the administrative burden while still allowing business leaders to retain full strategic oversight of the workforce. The relationship is straightforward: the company maintains complete employer control, while the HRO provider acts purely as a service partner.
A Professional Employer Organization, on the other hand, operates on a co-employment model. In this arrangement, the PEO shares legal employer responsibilities with the business. Employees are technically employed by both the company and the PEO, with the latter managing payroll, benefits, and compliance under its own employer identification number.
This structure is particularly useful for small to mid-sized businesses that want to provide enterprise-level benefits and maintain regulatory compliance without investing heavily in building HR infrastructure internally. However, for larger organizations, the co-employment aspect can sometimes feel restrictive, as it requires sharing responsibilities that many enterprises prefer to keep in-house.
Lastly, there’s Recruitment Process Outsourcing which is more specialized. In this model, an external RPO partner manages all or part of a company’s recruitment and hiring activities. This HR staffing solution can include job advertising, candidate sourcing, interviews, background checks, and onboarding. Unlike a PEO, the RPO provider does not assume co-employment responsibilities; instead, they act as an extension of the company’s internal talent acquisition team.
For organizations experiencing rapid growth, high-volume hiring, or expansion into new markets, recruitment process outsourcing provides speed, efficiency, and access to a deeper talent pool, all while ensuring that new hires remain directly employed by the company itself.
Since we’re only focusing on fully answering the question “What is human resource outsourcing?” in this article, we’ll now proceed with discussing the other aspects that make HRO what it is and how it can benefit your business today and long into the future.
One of the biggest advantages of human resource outsourcing is its flexibility. Organizations can outsource just a few HR functions or their entire HR department, depending on business needs. That said, its scope can range from transactional services like payroll to strategic functions such as performance management and workforce planning.
Below are the core HR services that are commonly outsourced by businesses across the US and why they matter to you:
Payroll is one of the most complex, sensitive, and time-consuming HR tasks. Errors in payroll can greatly affect employee satisfaction. In addition to that, they can also lead to compliance penalties and reputational damage. Outsourcing payroll to an HR outsourcing firm ensures accuracy in payroll processing, timeliness of distribution of salaries, and compliance with every relevant employment law and government requirement.
For businesses, outsourcing payroll means predictable costs and reduced legal exposure, while freeing internal teams for higher-value work.
Hiring (and retaining) the right people is a competitive advantage, but recruitment is time-intensive and resource-heavy. It’s one of the human resources functions that cost the most to invest in, and also among the most costly if not done right. Outsourcing recruitment to a third-party provider can cover:
An HR outsourcing provider often has larger talent networks, recruitment HR technology (AI screening tools), and deep market insights. This gives your business the benefit of faster hiring cycles, lower hiring costs, and a higher quality of talent entering the organization.
Designing and managing employee benefits is critical to attracting top talent and their subsequent retention, but it’s also heavy in terms of administration. Its challenging nature is the reason why it’s also among the most outsourced human resource functions. Outsourced HR services for benefits administration empower your company to:
As a strategic retention tool, outsourcing benefits administration allows you to offer a more competitive and comprehensive compensation package without the added workload to your internal team.
Once employees are on board, the next step is to make sure that they stay with benefits that go beyond compensation. They expect continuous growth opportunities throughout their stay in the company, but building employee training programs internally requires significant resources. So, most businesses typically outsource training and development functions for:
HRO providers usually have ready-made learning platforms, industry-specific programs, and expert facilitators, helping companies upskill employees at scale. This empowers your business with improved workforce performance and reduced turnover without the cost of building an in-house L&D team.
Managing employee performance requires consistent monitoring, data collection, and alignment with company strategy. While it can be tedious, access to this data allows business leaders to make informed decisions for the company. Outsourced HR providers can help you:
Instead of HR managers struggling with spreadsheets, executives gain access to data-driven insights that support better workforce planning and strategic decision-making with the help of a reliable outsourcing provider.
By delegating the HR responsibilities we have listed here, growing businesses significantly reduce HR workloads and get cost savings at the same time. Doing so enables you to focus on things that matter the most, such as healthier employee relations and a culture that supports the overall business growth.
Human Resource Outsourcing has become a cross-industry practice, but its adoption is particularly strong in sectors where compliance, scalability, or workforce management are especially challenging.
While any business can benefit from outsourcing HR, certain industries have leaned into outsourcing more, specifically HR outsourcing services, because of their structural demands and growth patterns. The following are the top 3 industries are outsourcing HR functions:
The technology industry is one of the heaviest users of HRO. Tech companies scale rapidly, often expanding across multiple countries in short periods of time. This creates immediate complexity in payroll, benefits, and compliance. At the same time, the competition for top talent is fierce.
By outsourcing HR, technology firms gain faster access to global recruitment networks, streamlined onboarding processes, and automated payroll systems that support distributed teams.
In healthcare, the motivations for using outsourced HR functions are very different. This industry is heavily regulated, with strict requirements for licensing, training, and compliance with labor laws and safety standards.
The stakes are high since mistakes in HR compliance can result not only in financial penalties but also in risks to patient care and institutional credibility. Healthcare organizations use HRO providers to manage credential verification, ongoing training programs, and employee scheduling across diverse roles. By outsourcing, healthcare executives ensure regulatory compliance while freeing internal leaders to focus on patient outcomes and clinical innovation.
The finance sector also relies heavily on HRO, but here the emphasis is on confidentiality, risk management, and strict adherence to global compliance standards. Banks, insurance companies, and investment firms must navigate complex labor laws, data privacy regulations, and internal audit requirements.
Outsourcing HR to trusted providers allows financial institutions to maintain airtight compliance while still providing competitive employee benefits that attract top-tier talent. For executives, the decision to outsource is less about operational convenience and more about safeguarding reputation and maintaining investor confidence.
While these three are the top industries when it comes to HR outsourcing, it cannot be denied that HR outsourcing can benefit every industry — in fact, we have no doubt that this list will soon change as more and more businesses utilize outsourced HR functions.
As mentioned above, when outsourcing HR functions you can choose to outsource only specific functions or hand over your entire HR operation. This makes HRO adaptable to different business stages, whether you’re a company scaling rapidly, expanding into new markets, or simply looking to streamline day-to-day HR tasks.
Typically, businesses outsource these HR roles and functions:
From recruitment and payroll administration to benefits management and compliance, nearly every HR task can be outsourced depending on the organization’s needs. The goal is to relieve internal teams of routine or highly specialized responsibilities so that your team can focus on strategy, while still ensuring employees receive consistent, high-quality support.
Business leaders turn to human resource outsourcing not only for convenience, but because it delivers real strategic value. Beyond delegating a task, it’s a move that businesses make to streamline operations, reduce costs, and ensure that leadership is focused on driving growth rather than managing administrative tasks.
Here are the core benefits of HRO for medium to large enterprises:
With HR tasks handled externally, executives and managers can concentrate on strategy, customer growth, and innovation instead of getting tied up in payroll disputes or compliance paperwork. This sharper focus helps streamline business operations and strengthens the overall competitiveness of the business.
Running a full in-house HR department is expensive since salaries, training, software, and compliance costs all add up. HR outsourcing transforms these into scalable, predictable expenses that grow with business needs, giving organizations a leaner cost structure.
HRO providers bring specialists in employment law, compliance, benefits administration, and employee engagement. Instead of struggling with limited internal expertise, companies gain immediate access to best practices and extensive industry knowledge.
HR demands rise and fall with hiring surges, restructuring, or expansion into new markets. Outsourcing ensures HR capacity adjusts quickly, without the delays and expenses of building an internal team from scratch.
An ideal HR outsourcing provider is one that invests in HRIS platforms, payroll automation, and advanced analytics. When you work with one, the business benefits from these tools without the upfront costs, while executives gain real-time insights for better decision-making.
To access these benefits, it’s important to identify the exact needs of your business and work with an external provider that has expertise in your specific needs. It’s also important to acknowledge that while the benefits of HR outsourcing are many, it still comes with risks and challenges.
Understanding the potential downsides is essential to making an informed decision and ensuring the partnership works smoothly. Here are some of the common challenges encountered by businesses when outsourcing their HR:
By outsourcing, leaders place key HR functions in the hands of an external partner. While this saves time, it can sometimes make executives feel less connected to employee relations. While this is a natural feeling, there is a solution: maintain oversight through clear reporting and regular reviews.
HR is closely tied to company culture, and an external provider may not fully capture an organization’s values or ways of working right away. Without careful onboarding of the provider, employees may feel a disconnect. Strong communication helps align your culture with your outsourced HR provider.
Sensitive employee and company information are crucial HR responsibilities, and outsourcing introduces an element of risk to this. Reputable HRO providers invest heavily in data security and protection, but business leaders should still evaluate security protocols to ensure compliance and confidentiality.
While these challenges are inevitable, they are not really dealbreakers. With the right provider, as well as following HR outsourcing industry best practices, most risks can be significantly reduced or eliminated altogether.
Careful partner selection, clear service level agreements, and consistent communication create accountability and alignment. Ultimately, the organizations that have been using HRO (there are a lot of them!) have found that the benefits still outweigh the risks.
By now, it’s clear that HR outsourcing is a strategic investment for businesses looking to scale their operations. But it’s equally important to recognize that outsourcing is never a one-size-fits-all solution. The real question for businesses is whether their organization is at a stage where HRO creates meaningful impact.
A good way to find out is by asking (and answering) the right question:
If your business is expanding rapidly, struggling with compliance, or carrying high HR overhead costs, outsourcing may be the logical next step. Similarly, if HR bottlenecks are starting to hurt employee experience and retention, it may be time to explore an HRO partnership that can relieve internal pressure while raising service quality.
If you answered “yes” to one (or more) of the questions above, it may be the right time to explore HRO as a strategic partnership.
If you’ve been asking yourself whether outsourcing is the right move for your business, you’re not alone. Many growing companies reach a point where HR tasks become too complex, too costly, or too time-consuming to manage in-house.
That’s where the right partner can make all the difference.
At KDCI Outsourcing, we specialize in building dedicated HR teams tailored to your business. From payroll and compliance to recruitment, training, and employee engagement, we offer flexible engagement models that let you focus on strategy while we handle the complexities of workforce management. Whether you need support for specific HR functions or an entirely outsourced HR team, we’re here to help you scale with confidence.
Let’s talk about how we can support your HR needs. Contact KDCI today.
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A business’s greatest asset is no other than its employees. Companies invest in talent not only to keep operations running and achieve organizational goals, but also to serve as representatives to customers, clients, and would-be employees. While employees are mostly responsible for their own learning, human resources (HR) management also plays a vital role in their development.
HR management is more than managing employees; it’s tapping into their skills, knowledge, experience, and potential to drive success in the workplace and in their individual careers. However, technological advancement in HR, evolving regulations, and turnover are troubling HR managers more than ever.
The good news? Outsourcing HR management gets HR managers back on track and elevates their HR game in ways that make organizational and employee success more attainable — that is, without straining your current workforce.
If the idea of outsourcing sounds good to you, this comprehensive article will teach you everything about outsourcing in human resource management.
From the name alone, HR management is a function that involves managing HR staff and other employees in the company. This includes recruitment, performance management, and employee engagement. It is also integral to workplace safety, compliance with employment laws, and fulfillment of organizational and individual employee goals.
HR managers are the leaders of the HR department. From recruitment to compliance, they wear multiple hats to keep the department and the organization running smoothly. Let’s tackle each of their responsibilities below:
Human resources managers are responsible for writing and posting job descriptions as well as sourcing, screening, interviewing, and onboarding employees into the company. They also orient employees on workplace policies and provide support to new hires.
These professionals liaise with team leaders, supervisors, or project managers to conduct performance reviews for potential salary increases and promotions within the department.
HR managers monitor employees’ training needs and create appropriate professional development programs.
Human resources managers create and oversee compensation and benefits packages for employees. These HR professionals factor in workplace needs in designing these packages to ensure that employees are well-compensated and healthy, thereby improving retention.
HR managers enforce company rules and regulations and impose sanctions — such as a suspension or a written warning — on employees to correct behavior, improve performance and productivity, and promote workplace safety. Depending on the severity of the violation, HR managers can terminate employees.
Leveraging their interpersonal, creative, and analytical thinking skills, they mediate and resolve conflicts between employees to promote well-being and avoid resentment.
Human resources managers keep abreast of changes in workplace safety standards and employment laws to ensure the organization maintains regulatory compliance and meets industry standards.
This section explores some of the benefits of outsourcing in human resource management.
Whether your employees work in the finance, HR, or marketing department, professional development is key to making themselves relevant, competitive, and future-ready in the workforce of tomorrow. When companies prioritize professional development, retention is greatly enhanced.
Gallup and Workhuman surveyed full-time and part-time 4,439 US adult employees. When asked if their company pushed them to upskill, the participants — who were 18 years old and above — answered “strongly agree.” Due to this encouragement, the report found that these employees have a 47% lower chance of seeking new job opportunities.
However, professional development involves resources. From developing training programs to finding an appropriate mentor or training venue, this initiative can leave HR departments stretched too thin, thus deprioritizing core business activities. Additionally, training programs should be tailored and engaging for all employees; otherwise, they won’t fully invest in their development.
An HR outsourcing provider can augment your team with HR managers and other HR experts who can develop training programs that are tailored to address skill gaps, encourage leadership, and meet workforce needs.
With the help of advanced employee training software, staff members have a clearer picture of their career trajectory, so the skills they learn suit their current position or prepare them for a future role in the organization. This encourages self-learning while also providing HR managers with data on the effectiveness and engagement of the training courses.
If there’s something that HR departments should never neglect, it’s compliance. Compliance makes the difference between a lawful organization and costly lawsuits. As the primary drivers of compliance, HR staff familiarize themselves with employment laws, workplace standards, and data privacy regulations, so the company fulfills its legal duties and avoids penalties.
With the amount of workload that HR managers face, there’s a tendency for compliance to be relegated to the back seat. Workplace bias, discrimination, and harassment are just a few of the compliance challenges HR managers face. Let’s also not forget that compliance issues can originate from payroll processing errors and a lack of qualified legal guidance.
HR outsourcing companies employ HR managers who are knowledgeable of employment laws and workplace standards at all levels of government. They help your business navigate the complexities of legal frameworks, ensuring your business remains fully compliant with local (overseas) laws and standards.
Outsourced HR managers can also review workplace policies and conduct compliance training, so your workplace becomes a positive environment for all employees — regardless of their gender, age, or race.
Local labor is more expensive, with the average cost of hiring sitting at $4,683 USD per hire. Obviously, recruiting and hiring costs differ between roles, companies, and industries. According to the US Bureau of Labor Statistics, HR managers earn an annual median salary of $140,030 USD.
As labor costs rise due to inflation, businesses turn to cost-effective options, such as contract workers and offshore outsourcing services, to offset costs while still benefiting from the specialized expertise of these contract and outsourced professionals.
Outsourcing to the Philippines drastically slashes your labor and overhead expenses, thanks to its lower wages and cost of living. In fact, on average, Filipino HR managers earn $10,482.54 USD to $12,579.05 USD a year.
By collaborating with an HR outsourcing provider, you can work with cost-effective HR managers who possess the same or higher caliber as local HR managers. Because outsourcing HR tasks puts less strain on your budget, you can better plan for future HR and business investments.
While outsourced HR services carry plenty of advantages to your business, be prepared to encounter these challenges when outsourcing in human resource management:
HR outsourcing may be cost-effective, but it’s easy to fall prey to overspending and compromising your company’s financial health if you don’t track your expenses. HR outsourcing costs encompass everything from labor to compliance fees. Hidden fees, such as currency exchange rates and technology upgrades, can likewise affect your budget.
No outsourcing company is perfect. However, an HR outsourcing company that doesn’t understand the nuances and peculiarities of your workplace culture can lead to unmet needs and expectations. Hence, you might end up being dissatisfied with the provider’s quality of HR services.
Data security and privacy are critical to HR outsourcing. Outsourcing does carry a degree of risk, as you’ll be allowing the HR outsourcing provider to process and store your data. If the outsourcing company’s security infrastructure is weak and employee data gets leaked, you’ll be in for a lot of trouble with your internal resources and, of course, the law.
In HR outsourcing, interactions take place virtually. Unfortunately, time zone differences can mean delayed responses and lost productivity. Because time is of the essence when outsourcing in human resource management, your HR outsourcing firm can adjust to your business hours for real-time HR support.
This section resolves the challenges discussed in the previous section. Follow these best practices to reap the benefits of HR management outsourcing:
It’s all about creating a budget and being aware of the costs of human resources outsourcing. Do extensive research on the Philippines’ cost of living and average salaries for HR managers. Consider also the project complexity, headcount, software, and your preferred experience level of HR managers. All these factors can influence your monthly total bill.
Additionally, don’t forget to ask for the breakdown of costs. The right HR outsourcing provider is transparent and will be happy to dissect the expenses of their outsourcing services.
While outsourcing expenses vary from provider to provider, anticipating all the possible costs can better financially prepare your business for expected and unexpected expenses. This way, you can enjoy the fruits of your provider’s service offerings and achieve a high outsourcing ROI.
The provider you’ll work with can make or break your company’s HR management operations. Well-experienced HR outsourcing companies possess deep knowledge of your industry.
Thanks to this knowledge, they can understand industry nuances and requirements. Because these HR and payroll service providers have worked with different clients, they can tailor their outsourced HR management services to your business needs.
In line with this, choose an outsourcing company experienced in outsourced HR management. Likewise, it would be better if the external provider has ample experience in providing HR management outsourcing services to clients operating in your industry. This minimizes the risk of unmet expectations and dissatisfaction with the outsourcing company.
Never, ever skip cybersecurity. This starts with vetting your HR outsourcing partner’s cybersecurity capabilities.
Probe into the provider’s IT infrastructure, data security practices, remote work policies, fraud detection measures, and risk management strategies. Ask about their background-checking processes and how they hire HR managers with integrity. Most importantly, check if the company is certified by the International Organization for Standardization (ISO).
When outsourcing in HR management, you’ll want to err on the safe side since your employees’ data is at stake. One data breach or insider threat can expose your data to hackers and cyber criminals.
If you’ve already started working with an HR outsourcing company, don’t make the mistake of being too complacent with your data security. Here are three tips:
When outsourcing in human resource management, the company has already prepared offshore HR managers who have agreed to work on your schedule. Building trust and forming a strong relationship with your offshore HR management team boils down to communication. Without proper communication, the partnership crumbles — and that’s something you wouldn’t want to happen.
Here are five tips for effective communication:
At KDCI Outsourcing, we understand the vital role of HR management in driving organizational success. Our offshore HR managers are equipped with all the right skills — from technical to soft skills — to handle your HR department and liaise with your internal team.
By integrating AI, automation, and modern HR technologies into your workflow, we can enhance your HR operations, improve operational efficiency, reduce errors, usher in innovation, and free your internal resources from boring administrative tasks.
Let KDCI Outsourcing oversee your HR department. Hire an HR manager or build a full HR team with us. Let’s get talking today!
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Outsourcing has become a powerful strategy for businesses that want to scale efficiently, reduce costs, and stay competitive in a fast-changing market. Among the world’s top outsourcing destinations, the Philippines continues to stand out in 2026, thanks to its skilled workforce, strong cultural alignment with Western businesses, and government-backed infrastructure.
In this article, we’ll explore the top outsourcing companies in the Philippines and highlight what makes them leaders in the industry. Whether you’re a startup looking to build your first offshore team or an established enterprise aiming to expand operations, this comparison will help you identify the right partner to match your business goals.
If you’re looking to scale your operations and considering working with an outsourcing company from the Philippines to delegate some of your business’ functions, then this article is written for you.
With a rich history of being the world’s “call center capital” — known for offshore customer service operations that support various global and multinational companies, the business process outsourcing (BPO) industry in the Philippines has successfully evolved.
Today, it is an intricate, fully-developed system that now supports a wide range of outsourcing services and offshore business processes, including but not limited to:
From customer support, IT, accounting, and finance, to creative design, HR, logistics, and procurement, outsourcing companies in the Philippines now empower businesses with functions that used to only be available inshore, at significantly more cost-effective rates.
With its skilled, English-speaking workforce, strong cultural compatibility with American, Australian, and European businesses, as well as a government-backed outsourcing infrastructure, the country has become the go-to destination for companies looking to outsource business functions. It’s the reason why a lot of offshore outsourcing companies have risen to fame over the past couple of years.
That’s exactly why we created this guide. Below, you’ll find a detailed breakdown of the Top 10 Outsourcing Companies in the Philippines (2026 Edition) — who they are, what they do best, and why you might want to consider them for your business.
Whether you’re a medium-sized business looking for a small but dedicated team offshore or a larger organization preparing to scale with outsourced staff, this list will give you a clear picture of the landscape and help you make a confident decision.
Let’s get started.
If you’ve been looking for the best countries for outsourcing solutions, we’re also almost positive that most, if not all, of the lists included the Philippines as a top destination for offshoring and outsourcing, as has been the case for decades now.
But, why exactly? What’s in it for you when you outsource to the Philippines?
So, before diving into the list of top outsourcing companies in the Philippines, let’s quickly cover the five key reasons why this country remains to be a global leader and the most ideal outsourcing destination in 2026:
The Philippines offers significant cost savings, allowing organizations to save up to 70% on staffing and operational costs compared to hiring domestically. This is primarily due to the lower cost of living and more competitive wages in the Philippines.
Beyond just salaries, however, outsourcing to the Philippines also lets businesses save on overhead expenses like office space, equipment, and utilities since these are already incorporated into the fees. This allows for a reallocation of capital to other critical business functions like research and development or marketing, driving revenue growth and productivity, without compromising quality (in essence, value for money).
The country boasts a large and diverse pool of professionals with extensive industry experience. Each year, hundreds of thousands of college graduates enter the workforce with degrees in fields like IT, business administration, finance, and human resources.
This talent pool is not only highly educated but also known for strong work ethic and dedication. The workforce is skilled in a wide range of services, from customer service and data entry to more complex tasks such as software development, financial analysis, and property management.
A key advantage is the high level of English proficiency among Filipinos since English is an official language and is primarily used in business and education. This fluency, coupled with a neutral accent, ensures seamless communication with clients and customers from Europe, Australia, and the US.
Additionally, the Philippines has a strong cultural affinity with Western cultures, particularly the United States, which facilitates smooth collaboration, reduces cultural misunderstandings, and fosters a productive work environment. The Filipino culture’s emphasis on hospitality and customer service is a natural fit for client-facing roles, so you can rest assured that your offshore team can meet the specific needs of your growing business.
The Philippine government has played a crucial role in nurturing the country’s BPO sector. It has implemented various programs and policies to encourage foreign investment that will support the industry’s growth and innovation.
As such, every BPO company in the Philippines is empowered by: (1) tax incentives and duty exemptions for registered BPO companies; (2) investments in infrastructure to support the industry’s technological needs; and (3) training programs aimed at upskilling the workforce in areas like IT, data analytics, and English proficiency.
When you choose to outsource to the Philippines, you are taking advantage of a well-developed industry with a continuously developing tech and structure, backed by strong government support that is geared to empower your business, too.
The Philippines’ large labor pool and established outsourcing ecosystem make it easy for businesses to scale operations up or down as needed. Whether a company needs to start with a small team of a few agents or expand to a large-scale operation, the infrastructure and talent are readily available through BPO services from the Philippines.
This flexibility is a significant advantage, allowing businesses to adapt to market fluctuations and manage their growth without substantial financial risk. The BPO industry is also highly adaptable to different work models, including remote and hybrid arrangements, further enhancing its appeal. Whatever phase your company is in, you can utilize outsourcing to match your client needs and drive forward your business’ ongoing success.
Of course, to maximize all the advantages that we have covered above, it is important to find a BPO company that will truly match your business’ specific needs.
Choosing the right outsourcing partner is a critical business decision and you need to do it with all the information you can get. After all, it’s not just about finding a company with a good reputation, it’s about finding one that’s a perfect fit for your specific needs — both in terms of technical skills and overall culture.
So, as you evaluate potential outsourcing partners in the Philippines, here are the key factors you should be checking:
With the above criteria in mind, we have compiled a list of the best outsourcing companies in the Philippines — so you don’t have to! These are the companies preferred by most businesses across the US and Australia, offering services across customer support, IT and software development, human resources, and even creative work typically handled by creative services outsourcing companies in the Philippines.
Let’s get to know them.
Company & Service Overview:
KDCI Outsourcing is a Pasig City-based outsourcing company with years of experience and is committed to helping businesses succeed. KDCI focuses on building high-performing teams of skilled professionals in the Philippines, enabling companies worldwide to achieve their goals. KDCI empowers experts in fields like accounting and financial services, customer support, back office services, IT and web development, among others.
KDCI’s Strengths:
With flexible engagement models and a personalized approach to recruitment, KDCI hires and trains your offshore staff based on your brand’s culture. They also help ensure continuous team improvement by making sure that your offshore team seamlessly integrates with your organization and provides your inhouse teams the support they need.
KDCI is best for companies that want a hands-on outsourcing partner to build teams that feel like an extension of their in-house staff.
Company & Service Overview:
As a global BPO leader with a significant presence in the Philippines, Concentrix provides a full spectrum of customer experience management services, integrating advanced analytics and technology to deliver end-to-end solutions.
Concentrix’ Strengths:
Concentrix offers a full suite of omnichannel support, including voice, chat, social media, and email. They are also highly focused on optimizing the entire customer journey and leveraging their robust infrastructure to manage large-scale operations.
Concentrix is best for businesses looking for data-driven customer experience solutions with the ability to scale globally.
Company & Service Overview:
One of the most recognized names in the outsourcing industry, Teleperformance has a massive footprint in the Philippines, providing a wide range of services from customer care and technical support to finance and back-office operations.
Teleperformance’s Strengths:
With years of experience in the outsourcing industry, Teleperformance specializes in providing multilingual support and have made significant investments in technology and AI-driven solutions integrated with human expertise to enhance service delivery.
Teleperformance is best for companies that need enterprise-grade outsourcing solutions with guaranteed reliability from a trusted global leader.
Company & Service Overview:
Foundever specializes in customer experience management and digital solutions. The company is particularly known for its focus on employee training and engagement, which it believes directly improves service quality. Foundever offers services across customer support, technical support, sales and retention, back-office support, and more.
Foundever’s Strengths:
This outsourcing company is recognized for its high employee satisfaction, which leads to better service delivery. It offers a range of omnichannel solutions supported by innovative tools and has extensive experience across various industries including healthcare, tech, and hospitality among others.
Foundever is best for businesses that prioritize consistent, empathetic, and people-centric customer experiences.
Company & Service Overview:
Alorica delivers customer experience and back-office solutions across numerous industries such as banking, healthcare, and retail. The company differentiates itself through its use of digital-first and data-driven insights to personalize customer interactions and streamline operations.
Alorica’s Strengths:
Alorica leverages advanced digital transformation tools, including chatbots and analytics. It offers a wide range of scalable customer experience and back-office services and has a strong global reputation.
Alorica is best for companies that want tech-enabled outsourcing to enhance customer engagement and optimize their operations.
Company & Service Overview:
Cloudstaff specializes in providing skilled, remote staff and teams to businesses worldwide. They hire and train virtual assistants, accountants, marketing specialists, and other professionals for various industries. With a strong focus on technology and an employee-first culture, they offer future-forward and enterprise-grade solutions for companies looking to build their offshore workforce.
Cloudstaff’s Strengths:
They have a strong emphasis on providing a positive work environment, which helps in staff retention. Their model is highly flexible and transparent, allowing clients to have more direct control.
Cloudstaff is best for businesses of all sizes that want to build a dedicated, remote team that feels like an extension of their in-house staff.
Company & Service Overview:
TaskUs is a multinational outsourcing company with a strong presence in the Philippines. It specializes in digital-first support and content moderation. It has a strong presence in tech-enabled industries like SaaS, fintech, and gaming, and emphasizes flexible scaling to meet the demands of rapid growth.
TaskUs’ Strengths:
TaskUs has established itself by providing scalable outsourcing solutions to fast-growing tech companies and startups. The company focuses on agile solutions that bring trained team members and advanced tech together.
TaskUs is best for high-growth businesses or startups that need a scalable and tech-savvy outsourcing partner.
Company & Service Overview:
IBM brings its enterprise-level, AI-powered outsourcing capabilities to the Philippines, offering expertise in a wide range of services including IT, finance, HR, and customer service. With cutting-edge AI assets and trained agents, IBM takes pride in empowering end-to-end business transformation.
IBM’s Strengths:
IBM provides global IT expertise and digital transformation solutions. The company is highly focused on AI adoption, data security and compliance, making it an ideal choice for businesses looking for multi-function outsourcing from a trusted provider.
IBM is best for medium to large businesses that need a reliable partner for IT and back-office services.
Company & Service Overview:
MicroSourcing specializes in offshore staffing and managed services, providing a unique model that allows businesses to build dedicated offshore teams that feel like an extension of their in-house staff. They can hire and build teams for marketing, finance, real estate, e-Commerce and other industries.
MicroSourcing’s Strengths:
MicroSourcing offers flexible staffing options, from hiring a single role to building full, integrated teams. They are particularly strong in creative, IT, and back-office roles and provide clients with a high degree of transparency and control.
MicroSourcing is best for organizations that want direct control over their outsourced teams while still leveraging a BPO’s expertise and infrastructure.
Company & Service Overview:
More popularly known as TTEC, Teletech is another global leader in customer experience with strong operations in the Philippines. They provide a comprehensive suite of services, including customer support, digital solutions, and back-office services.
TeleTech’s Strengths:
TTEC has made significant investments in digital customer engagement tools and offers 24/7 global coverage. The company has deep expertise in customer retention and satisfaction, ensuring a high-quality service experience.
TeleTech is best for companies that want global customer experience solutions with a strong and reliable Philippine delivery center.
The Philippines continues to lead the global outsourcing industry, and in 2026, businesses of all sizes are taking advantage of its talent pool, infrastructure, and cost benefits.
Whether you’re just getting started with outsourcing to scale your ongoing business operations or looking for a new partner to explore more offshore staffing solutions, the companies on this list represent some of the best options available for building a reliable, skilled, and scalable offshore team.
Today, outsourcing is about strategically scaling your business while focusing on what you do best — provided that you’re working with the right partner.
Still not quite sure who to choose? Start by asking us.
At KDCI Outsourcing, we specialize in helping medium to large businesses build dedicated offshore teams that deliver world-class support without the overhead costs of hiring in-house.
From customer service to IT to human resources, we help you build a dedicated team that matches your brand and business goals. With a client-focused approach and a proven track record of helping businesses scale sustainably, we make it easier for you to focus on growth with an experienced, outsourced team.
So, let’s talk about how we can support your outsourcing needs in 2026. Contact KDCI today.
A big part of your business success depends on the people you’re working with. However, an efficient and reliable team can be hard to come by without investing too much time or money. This is why a lot of companies turn to building their own offshore teams in the Philippines.
By working with a Philippine offshore team, companies like Amazon and Target can streamline their business processes for lower costs without sacrificing quality.
In this guide, we’ll walk you through the step-by-step process on how to build an offshore team, so you can meet your business objectives, achieve operational efficiency, maximize competitive advantage, and unlock new growth opportunities.
Building dedicated teams in the Philippines can greatly benefit your business. Here’s why:
Unlike in the US, where the average annual salary is $66,621.80 USD, the Philippines has a much lower average salary at $3,870.12 USD per year — that’s $322.51 USD or ₱18,423 PHP per month. In the Philippine BPO industry, salaries range from $3,236.60 USD to $9,512.95 USD a year.
From this data, it’s clear why many companies from developed countries prefer hiring a full team of offshore Filipino employees. Without the high operational costs of maintaining an internal staff, you can save on labor and overhead by at least 70%.
Offshoring means an expanded global talent pool. Building an offshore team entails fewer budget constraints on labor, allowing you to hire specialized Filipino professionals at a lower cost than local talent.
Because the Philippines is ahead of the US by 12 hours (or more depending on your company’s location in the US), your offshore Filipino employees can cover business and after-hours support to keep your operations running 24/7 and ensure fast turnaround times.
When building an offshore team, consider your capabilities when it comes to budget, available time and resources, as well as your current business condition. Here are the three main ways you can do this:
The most effective method in building a dedicated offshore team in the Philippines involves partnering with a specialized outsourcing company that manages all aspects of recruitment, training, and management, aligning the team with your business needs.
Setting up your own offshore office in the Philippines offers direct control over your team and operations but requires significant investment in time, finances, and resources to manage all operational aspects.
Using freelance platforms for building a remote team in the Philippines provides flexibility and cost-effectiveness, especially for small projects or budgets, but requires more hands-on management for coordination and quality control.
Unfortunately, not all freelancers are reliable. Some freelancers underdeliver on their promises, while others may refuse high-priority tasks because they have conflicting deliverables with other clients. Between freelancers and offshore teams, companies will opt for the latter as they are more reliable and consistent.
There are many ways you can build an offshore team in the Philippines, but the most efficient method involves finding a reliable outsourcing provider. Let’s go through how you can do this.
As a business owner, the first step in building an offshore team is identifying your needs and business and project goals. You can do this by closely examining your current operations. Look at what's working well and areas that need improvement, such as customer service, technology, or market expansion.
You should also pinpoint the specific challenges your business is facing. For instance, if rapid growth is overwhelming your current staff, you might consider whether adding offshore team members to perform certain functions could alleviate pressure. Conversely, if innovation is your goal, pinpoint the skills and expertise needed to drive this, and assess if these are present within your existing team.
This phase is about aligning your operational needs with your strategic goals. Are you looking to cut costs, improve efficiency, or expand your offerings? Each goal will require different resources and approaches, and recognizing this early on is key to successful offshore team management.
Choosing the right offshoring partner in the Philippines is a critical decision that can significantly impact the success of your offshoring venture. Begin by conducting thorough research to create a list of potential offshore outsourcing companies in the Philippines.
This can be achieved through online searches, ChatGPT, recommendations from business networks, and reviews and case studies.
Pay close attention to each candidate’s track record, particularly in your industry or for the specific services you need. It's important to evaluate a potential outsourcing partner not just based on cost but also on their proven ability to deliver quality work and their experience in handling similar offshoring operations.
Once you've shortlisted potential partners that can help you build an offshore team in the Philippines, assess their compatibility with your business by evaluating their communication skills and their company culture to ensure a good match with your own. An ideal partner should not only be capable of fulfilling your business needs but should also be flexible and adaptable to your working style and values.
Once you've selected a reliable outsourcing provider, it's time to leverage their expertise in building an effective offshore team tailored to your specific business needs and objectives. Here are the things that your partner will do for you.
Your outsourcing partner begins the process of building your offshore team by assessing your business and project requirements to determine the ideal team size and the specific roles needed. They consider factors such as task complexity, necessary skill sets, and the level of support your onshore team requires.
They also plan the role specifications and task distribution, deciding whether your team needs generalists for various tasks or specialists for certain areas, based on the nature of the work and your long-term goals. This ensures a balanced team dynamic with members whose skills complement each other.
Once there’s a concrete plan for the team structure, they will start finding the right people through their recruitment team, who are responsible for making job posts, sourcing talent, as well as vetting, screening, and interviewing candidates.
Your outsourcing partner will also handle and manage the training and onboarding process of your team.
For the training process, they will prepare and hold specialized on-brand training that involves equipping the new talents with complete knowledge about your brand. By training them for your brand, you can ensure that you’ll get an offshore team that can work using your brand’s voice, values, and management styles.
To further guarantee a high-performing team, the best business process outsourcing (BPO) companies like KDCI Outsourcing certify talents through assessments, exams, live situational demos, and more.
Your outsourcing partner will also handle the onboarding process, which involves providing the talents with the systems and project management tools that your business uses for its operations. They’ll also take care of the necessary infrastructure and equipment.
Another key responsibility of your outsourcing partner involves managing your offshore team. They will monitor and oversee the operations and ensure that your staff maintains high levels of productivity and service quality.
To achieve this, the outsourcing provider monitors key performance indicators (KPIs) and ensures that the service level agreements are met. If not, then the partner will determine the areas for improvement and the possible resolutions to take.
Your partner will also prepare a report containing data-driven insights based on customer feedback and interactions, giving your business a better overview of the team’s efficiency. They will also provide regular updates and meetings to keep all parties aligned on project goals, timelines, and changes.
We created this short FAQ to help you better prepare for effective offshore team management and building.
Outsourcing companies usually take four to six weeks to build a full offshore team. However, timelines may vary between providers, so we recommend asking the company’s outsourcing expert for the average timeline.
You should use your company’s preferred communication tool. If your company uses Microsoft Teams, your offshore employees must have their own Microsoft Teams account for seamless communication and collaboration during working hours.
We recommend Asana, ClickUp, or Trello. Your choice of project management tool depends on your preferences as well as the tool’s features, reliability, and security capabilities.
When it comes to offshore team management, communication is always the key! Regularly discuss your project goals and expectations to avoid misunderstandings and keep everyone aligned on important matters.
Yes! Virtual team building activities let you connect and bond with your offshore team members beyond chats and video conferencing meetings. Your team’s project manager can also choose to hold virtual team building activities — especially if most (or all) offshore team members are working remotely.
However, these activities don’t take too much of your employees’ time, so they can still work on their deliverables and maintain momentum.
Building an offshore team in the Philippines is not an easy task. You need to allot ample time and resources to ensure that each step goes well, but this may not be possible for businesses with limited capabilities.
That said, make sure to work with a trusted offshore partner who will take care of everything for you, from finding the best people for your team to managing them and ensuring high-quality service.
At KDCI Outsourcing, we build a Philippine offshore team based on your needs, goals, and project requirements. Whether you’re outsourcing software development, accounting and finance, content creation, or customer service, we’ll find the right talent, train and certify them for your brand, and oversee your offshore business operations, giving you more time to focus on your core business processes.
Ready to progress on your goals and achieve business success with your own offshore team? Contact us to learn more!
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Human resources is the key that holds your business together. While HR departments play a significant role, managing them comes with its own set of challenges, such as labor shortages, burnout, skill gaps in AI, budget constraints, and operational inefficiencies. To address these challenges, businesses resort to human resources outsourcing.
HR outsourcing offers significant advantages that in-house HR teams can’t. If this strategy is on your radar right now, this guide will teach you how to outsource human resources the right way.
This tutorial helps you understand the process and best practices for outsourcing human resources. Put the following procedures into action, and you can reap the many benefits of outsourced HR.
If outsourcing is a new venture for your company, you have to understand what outsourced HR is as well as its benefits and drawbacks.
To start, HR outsourcing is a process of delegating HR functions to a third-party vendor in a foreign country, providing HR support in outsourced human resource management, background checking, benefits administration, payroll, HR management, and recruitment.
Some of the benefits of outsourced HR include:
On the other hand, HR outsourcing has its drawbacks, such as:
By researching HR outsourcing, you’ll know what to expect and make smart decisions for your business.
HR outsourcing is not an overnight decision; it’s a commitment and an investment for long-term success. Before you outsource human resources, it’s important to have a good, hard look at your company’s HR functions — some even use HR consultancy services to find clear answers. For starters, here are four signs you need to outsource human resources:
Remember, employees are looking for more than just a good paycheck. They also want to work for companies with ample professional development opportunities, competitive benefits, and a non-toxic work environment.
HR outsourcing providers can enhance your talent acquisition and retention strategies, refine your training programs, and improve your workplace culture, so you can attract and retain high-performing employees.
This data exemplifies the demand for automation and efficiency while addressing evolving workforce needs. However, when done in-house, technology upgrades can be expensive.
But when you outsource human resources, the service provider can integrate advanced HR technologies and tools into your day-to-day workflow to automate tedious processes and simplify the HR experience for internal staff.
Outsourced HR compliance officers can take care of your compliance needs, leveraging their expertise to ensure your company is free from workplace hazards and discriminatory employment practices.
Just by looking at the signs above, you already have a rationale for outsourcing as well as a clear idea of which HR services to outsource. Don’t solely rely on observation, though. Interviews, surveys, and data analytics can shed light on blind spots and provide data-driven insights on the current state of your HR department and workplace.
HR outsourcing may be a more cost-effective venture, but it doesn’t mean coming in unprepared for all the possible costs you might incur. When you outsource human resources, expect the following expenses:
Scope of work, project complexity, experience level of outsourced employees, headcount, pricing model, and location can also affect your total outsourcing fee.
While it’s hard to determine the exact amount of money you’ll need for outsourcing HR, understanding outsourcing costs can help you prepare a realistic monthly budget, minimize overspending, and measure your outsourcing ROI.
Don’t forget to account for long-term business goals. At some point in the partnership, your business will grow, and you’ll want a budget that will scale to your current business needs.
It’s so easy to be overwhelmed by the ubiquity of human resources outsourcing companies online. Even Googling “HR outsourcing companies” yields a lot of results.
If you’ve grown tired of the classic Google method, consider chatting with ChatGPT for prospects. Here’s a fun fact: Our lead asked ChatGPT for the best Philippine AI companies, and one of the recommendations included KDCI Outsourcing.
By using ChatGPT, you can find and shortlist potential outsourcing providers much faster than a traditional Google search. These recommendations are not random, though. In fact, they are based on multiple factors, such as the company’s reputation and expertise as well as the SEO rankings and quality of published content. These data make it easier for ChatGPT to curate HR outsourcing companies.
Another method — albeit a more human one — is by asking your network (virtual or otherwise) for suggestions. All it takes is the right people to help you find the right provider.
Whether you’ve found 10 or 20 potential outsourcing companies, the next step is to vet your prospects. When evaluating potential outsourcing partners, take note of the following:
At this point, you’ve probably removed a few potential partners from your list. Let’s move on to the next step.
The vetting doesn’t stop at the initial screening. Booking a meeting with an outsourcing partner is a huge opportunity to dive deep into their capabilities as a provider. Here are questions you can ask during the meeting:
Transparent and trusted outsourcing providers are more than eager to answer all your questions. They understand that you’re risking your data and investing money into their services, so they want nothing but the best for you.
Most importantly, use this meeting to set your expectations and performance metrics with the vendor.
It’s normal to feel reluctant when making big decisions. Most of the time, marketing claims are just claims until they’re proven right in front of your eyes. Those answers from your interview questions? Maybe they’re not enough to make you fully commit to the partnership. Thankfully, HR outsourcing companies offer trial periods.
Think of trial periods (or trial projects) as a “demo” or “preview” of the provider’s expertise and service quality. What’s great about accepting a trial project is that it exposes most of the green and red flags of your offshore HR team and the HR outsourcing company itself.
Here are the green flags to look out for:
Conversely, here are the red flags:
If the trial period did not work out as expected, it’s okay to move on to other prospects. It’s better to go through the whole vetting process than waste time and money on the wrong HR outsourcing partner.
What if my offshore HR employees passed the trial period? Congratulations! You can now officially outsource human resources. To build a long-lasting outsourcing relationship, follow these tips:
Outsourcing partnerships take time to build. So long as the relationship is grounded in trust, accountability, and shared responsibility, there’s a huge chance that it will last for years.
At KDCI Outsourcing, we help medium to large-sized businesses scale their in-house HR department with a dedicated offshore HR team from the Philippines. Our staffing solutions are designed to augment your existing team with outsourced roles in payroll, HR data analysis, recruitment, talent acquisition, and many more.
With our strict hiring process and commitment to innovation, we ensure that our AI- and human-driven HR services exceed your expectations and meet your business needs.
If you’re looking to outsource human resources and build your own team, contact us now for assistance!
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About 68% of US companies engage in offshore outsourcing today.
And when we say companies, we’re also talking about multinational, successful businesses. The brands that we know and love. Top brands like Adidas, Google, Telstra, and Amazon outsource their operations to companies like KDCI because of benefits such as cost efficiency, access to a wider, global talent pool, and staffing flexibility.
That’s how much offshore outsourcing impacts the business world. With the right outsourcing partner, you can tap into this impact and empower your business to scale smarter with an outsourced team, too.
So, let’s talk about it! In this blog, we’ll answer the questions “what is offshore outsourcing?” and “how does it actually work?” We’ll also cover the key benefits of having an offshore team as well as the best practices in finding a reliable offshore outsourcing partner.
Here’s everything you need to know.
Offshore outsourcing is a business strategy wherein companies hire external firms or a third party service provider in other countries to handle tasks like customer service, IT support, software development, and manufacturing. It could mean having a handful of staff working for you from across the globe, or a dedicated team for the function you are outsourcing, say an entire HR department operating from offshore destinations like the Philippines, serving as an extension of your in-house team.
This allows businesses to save costs and access specialized skills that are more readily available or more cost effective abroad. As opposed to onshore outsourcing, an offshore outsourcing service allows businesses to leverage lower labor costs from outsourcing providers, giving them both reliable workers and substantial cost savings. That’s a win-win!
The tasks outsourced depend on the company’s unique operational and business needs, such as a tech firm hiring foreign developers for their expertise or a manufacturer seeking lower labor costs or an eCommerce company needing more customer service agents. Since the global BPO market has grown and evolved over the years, almost every service can now be outsourced. The test? If a task can be done remotely, then you can delegate it to an offshore team.
Offshore outsourcing services can be broadly classified into five types, each catering to different operational needs and strategic objectives of businesses.
More popularly known as ITO or IT Outsourcing, this type of offshore outsourcing involves contracting external organizations located in other countries to handle various technical support and IT-related tasks, such as software development, application maintenance, network management, and IT support. It’s one of the most common forms of offshore outsourcing, driven by the need for technical expertise and cost savings.
Curious about IT Outsourcing? Check out ITO Meaning: Benefits and Use Cases of IT Outsourcing.
Business Process Outsourcing (BPO) entails outsourcing non-primary business activities and functions such as customer support, administrative tasks, human resources, finance and accounting, and data entry to specialized service providers overseas. The aim is to improve operational efficiency and allow companies to concentrate on their core competencies.
Knowledge Process Outsourcing extends beyond traditional BPO by outsourcing more complex, knowledge-intensive tasks that require specialized skills (that, of course, still come at a lower cost). This includes research and development, financial analysis, advanced engineering services, legal processes, and consultancy services.
Learn more about the difference between BPO vs. KPO here: BPO vs KPO Explained: Essential Insights You Should Know.
Legal Process Outsourcing focuses on outsourcing legal services to external firms located in jurisdictions with lower labor costs. Services commonly outsourced include document review and management, legal research, contract management, and compliance services.
This type of offshore outsourcing service is typically used by legal forms or large corporations with their own legal departments who need to fill some roles while reducing the overhead costs of recruiting and training legal staff.
If you want to know more about LPO, read: LPO: A Comprehensive Guide.
This offshore outsourcing type involves contracting manufacturing processes or production tasks to foreign companies. Manufacturing outsourcing is adopted by companies looking to benefit from lower labor and as well as production and operational costs, access to advanced manufacturing technologies, and the ability to scale production based on demand without significant capital investment.
Offshore outsourcing follows a structured process that allows companies to delegate certain tasks or business functions to third-party service providers located in countries other than where the company is.
While there is no one-size-fits-all approach and the journey may vary depending on your outsourcing needs as well as the nature of your chosen provider, the process typically involves the following key steps:
Companies first need to identify the tasks they want to outsource. These can range from IT services, customer support, and manufacturing, to specialized tasks or short-term projects like legal processing or knowledge-based work, depending on every specific business need.
The next step involves researching and selecting the best offshore outsourcing companies with the expertise, resources, and capacity to meet the company's needs. This selection is based on various factors, including cost, reputation, quality of work, tech innovation, and the provider's ability to communicate effectively across cultural and linguistic barriers.
Usually, companies from developed nations and economies outsource to developing countries like the Philippines to maximize cost savings. This strategy leverages lower labor costs and access to a skilled workforce, allowing businesses to reduce expenses and improve efficiency with a trusted BPO company.
Companies conduct due diligence to assess the capabilities, financial stability, and track record of the chosen offshore outsourcing company. Following due diligence, the company negotiates terms, including scope of work, engagement models or service level agreements (SLAs), pricing, confidentiality agreements, and timelines with the outsourcing provider.
This phase involves transferring the identified business processes to the offshore outsourcing provider. It may include training the provider’s team, setting up communication and project management tools, and integrating systems and processes to ensure smooth operation and oversight across the entire outsourcing journey.
Effective communication and management are crucial for the success of offshore outsourcing. Regular meetings, progress reports, and performance reviews help manage the relationship, address any issues, and ensure that the outsourcing objectives are being met.
Establishing quality control measures and feedback loops is also essential to maintain the quality of the offshore outsourcing services availed. This can involve periodic audits, performance metrics analysis, and implementing changes based on feedback to continually improve the process and outcomes.
Ensuring compliance with legal and regulatory requirements in both the company's home country and the provider's country is critical. This includes data protection laws, intellectual property rights, labor laws, and tax implications.
Aside from the nature and process of outsourcing, among the most frequently asked questions about working with a BPO company are about its benefits. Let’s talk about what’s in it for you when you outsource specific business functions.
Offshore outsourcing comes with a number of advantages. Listed below are some of the most common benefits:
Offshore outsourcing greatly lowers costs by using cheaper labor from other countries, saving money on salaries, office space, and equipment.
It enables access to a vast pool of skilled professionals worldwide, providing expertise that may be scarce or costlier domestically.
Businesses can concentrate their resources on core activities that drive growth and revenue, enhancing their competitiveness.
Offshore outsourcing offers the ability to scale operations quickly in response to market demands without large capital investments or long-term commitments.
Partnering with specialized offshore companies leads to improved workflows, productivity, and turnaround times, thanks to optimized processes and best practices.
While offshore outsourcing offers significant advantages, it also requires careful planning, effective communication, and diligent management to address challenges such as cultural differences, time zone discrepancies, and ensuring quality standards are met.
Want to learn more about the benefits of offshore outsourcing? Read: Offshore Outsourcing Guide: Benefits & Best Practices.
While outsourcing can now benefit almost every industry, there are still services that are preferred over others. For organizations all over the world, the five most commonly outsourced business operations are:
software development services, web development, IT support, network management, and cybersecurity
Such as call centers, help desks, and customer interaction management
payroll processing, benefits administration, recruitment, and training
Such as bookkeeping, tax preparation, financial analysis, and auditing
outsourcing the physical manufacturing process of goods, especially to countries with lower labor costs
These offshore services are commonly outsourced due to their universal demand across industries, coupled with the availability of specialized global providers who offer cost-effective and scalable solutions.
Didn’t find the exact service you need on the list above? Check out In-Demand Offshore Outsourcing Services for US Businesses.
Where should you find a trusted offshore outsourcing service provider? The top offshore outsourcing destinations are renowned for their skilled labor pools, cost-effective services, and business-friendly environments. As of 2025, the best countries for outsourcing include:
With a strong emphasis on customer service and English language proficiency, the Philippines excels in providing offshore employees for call center services, customer support, and creative outsourcing.
Known for its vast pool of IT talent, India is a premier destination for software development, IT support, and business process outsourcing (BPO).
A global leader in manufacturing outsourcing, China offers a broad manufacturing base and access to a large, skilled workforce.
Recognized for its IT and software development expertise, Poland has become a preferred choice for companies seeking advanced technical skills in Europe.
With a growing reputation for its IT and software development talent, Ukraine offers highly skilled professionals in these fields at competitive rates.
By leveraging the strengths of these leading outsourcing destinations, companies can enhance their competitive edge, improve operational efficiency, and drive growth in the global marketplace.
Choosing the right outsourcing company is crucial for enhancing your business operations and achieving strategic goals. Here are the top five tips you can follow when choosing a service provider:
Clearly outline your objectives and the specific services you need to outsource to ensure alignment with potential partners.
Conduct in-depth research to identify outsourcing firms with a strong track record and relevant industry experience.
Choose a partner with excellent communication capabilities to ensure smooth interactions and project management.
Verify the outsourcing firm’s technical capabilities and infrastructure to handle your projects efficiently and securely.
Review the pricing structure and contract terms carefully to ensure transparency and flexibility to meet your business needs.
By following these tips and approaching the selection process systematically, you can find an offshore outsourcing partner that not only meets your current needs but is also well-positioned to grow and evolve with your business over time.;
Ready to choose an offshore outsourcing provider to work with? Check out 10 Best Offshore Outsourcing Companies in the Philippines.
Or better yet, take the first step by discussing your offshore outsourcing needs with an offshore outsourcing provider that you can trust. Just reach out — we’d be happy to answer any other questions you might have about offshore outsourcing.
It’s difficult to navigate offshore outsourcing with little knowledge, especially if you have specific business requirements to fulfill. With several things you need to consider, how do you get started?
This is where KDCI Outsourcing comes in. We take the time to understand your needs and requirements, company culture, and pain points to build you the perfect offshore team. With over 20 years of industry expertise, we’ll do everything for you, from finding, vetting, training, and certifying the right talents for your brand, up to managing your operations, saving you time and money — so you can focus on growing your business..
Learn more about our offshore staffing services and how it can empower your business to scale smarter. Contact KDCI to get started.
What started out as a few agents, has grown into an invaluable partnership with KDCI. With more than 40 team members, we are lucky enough to count as part of our Cedar Family. Thank you so much KDCI for making our Company better!
We have found KDCI to be a consistently reliable partner, always willing to ‘go the extra mile’ to ensure our valued customers receive the best possible service.
KDCI plays a very important role in our catalog and content operations. They are responsive, kind, and always willing to help us as much as possible. We have been working together for more than 4 years, and we hope our partnership will be even more fruitful in the future.
Having collaborated with KDCI.co for our creative needs, I can confidently attest to their unparalleled expertise and dedication. Their team consistently delivered innovative solutions that not only met, but often exceeded our expectations. Their professionalism and attention to detail are commendable.
KDCI were able to grow with us with any future requirements. We have a lot to do when it comes to our business, and everytime we come back, they're right there with us and able to deliver.
KDCI's team has been instrumental in helping us not only modernize our platforms but also increase the experiences for the customer, and to deliver on the tsunami of content that came their way.
We had a lot of difficulty finding qualified talent in the United States. Honestly, I don't think we had thought about outsourcing at all as a potential option, but we were very open to it once we heard about it. We love our KDCI team. They're just like a regular part of our team, it's just that they're thousands of miles away.
It's been five years since we started working with KDCI, and it just keeps getting better and better. We've grown together and achieved a lot of shared success. Overall, they're incredibly professional yet fun to work with. We are incredibly happy to have found them.
We're so glad we partnered with KDCI to develop a unique platform that delivers personalized customer experiences without compromising functionality or security. It was an amazing experience, I won't hesitate to start another project with them again.
