Outsourcing is an excellent strategy for businesses looking to reduce costs and drive productivity, but it’s important to choose the right partner.
Unfortunately, there are many cases where businesses are not reaching their full outsourcing potential because their business process provider (BPO) just wasn’t the right fit. Switching to a new BPO is a relatively easy option but there are a few things that you need to know first.
To help you find the right outsourcing partner and set you up for business, we have compiles this list of top questions that you should be asking when switching BPOs.
1. Is this the right type of BPO model for me?
The very first thing you need to find out about a BPO before you do business with them is the type of services they provide. Unfortunately, there is no such thing as a one size fits all BPO. Instead, there are a number of different business models on offer, with each model having distinct pros and cons.
Some of the most common outsourcing business models are:
Freelancing is usually the cheapest outsourcing model available but also the riskiest. Through various websites, businesses can get in touch with home based individuals who are offering their services for projects or ongoing roles. While there are some very good workers available at low costs, there are no background checks to ensure that the person has the appropriate qualifications and experience, and no safeguards to ensure your project will be completed on time or at all. It also makes it difficult to expand your operations and grow your team.
Fully managed services
In this model, an outsourcing company will handle absolutely everything for you. You tell them what you need done and provide KPIs, and they do the rest. All recruitment, and day to day management is done by the provider and they provide you with periodic reports.
It can be a good approach for those looking for a hands off solution, however the downside is that the outsourcing provider will control your business processes which means that they can change the people who will complete your project. Because you have no control over the processes of your offshore team, it’s possible that the quality of work may suffer. There can also be a disconnection between cultures if your offshore team isn’t duly integrated into the business. The fully managed service model is also usually the most expensive model because of the additional management and risks that the provider takes on.
Staff leasing is the most popular model for most small to medium sized businesses and involves you setting up a part of your company in another country via an outsourcing partner. The provider will handle different areas of your business, such as recruitment, facilities, IT, HR and payroll, while you retain full control of the staff management and work quality. This works particularly well for businesses that want to scale up quickly and improve efficiency.
There are numerous benefits that this model can offer. It allows you to build your own full-time, dedicated remote team that you can integrate into your business. You also have complete control over your staff’s tasks, processes, and quality of service. Service providers with years of experience such as Cloudstaff can help you recruit and set up your team, and they understand the laws and local culture so they can offer you continuous support.
Another thing to consider when deciding if a BPO is the right model for you is if a BPO specializes in one particular area or offers a broader range of services. An outsourcing provider that specializes in one discipline can certainly have some advantages when it comes to industry expertise, but you will need to consider whether or not you will need a variety of roles.
Most businesses start their outsourcing journey with one particular role in mind but usually grow their team to expand their capabilities. For example, an accounting firm will likely start by hiring an outsourced accountant, but might later add an administration officer, a digital marketer and an SEO/SEM expert. In this case, the accounting firm would be better off choosing a BPO that can offer a wider variety of roles.
2. What are the fee structures and what value do I get?
Just as BPOs have many different business models, they also have many different price points and service capabilities.
BPOs range from small operators with a handful of staff who offer the bare basics to large multinational organizations offering a wide array of features and support services.
Which BPO you choose will come down to your needs and budget, but as with most things in life, you tend to get what you pay for. When it comes to choosing a BPO, the cheapest option is rarely the best.
It’s common for smaller micro operators to offer prices that seem too good to be true; and they rarely are. Make sure you ask about any additional fees early on so you know what the real price will be.
You also need to know what services and support you will be getting in return for your investment.
One way smaller operators keep fees low is to cut corners with hardware, infrastructure and support services. For example the standard setup might be a relatively low spec computer running on a slow internet connection. The initial cost savings might seem enticing, but you will eventually lose out when the staff are not able to process their work efficiently.
By choosing a well established and reputable outsourcing provider you can expect far greater value for your investment.
For example at Cloudstaff, high spec hardware and redundant high speed internet comes as standard, along with enterprise data security and 24/7 tech support. You also get access to exclusive applications that help you keep track of your staff and monitor their projects – features that other operators just can’t offer.
Other features to look out for include, recruiting capabilities, staff retention programs, training and conference facilities, and HR support.
The bottom line when choosing a new outsourcing provider is to get a clear and upfront pricing plan early on and really spend some time looking into what you will get in return.
3. What will moving mean for my current staff?
Staff KPI performance dashboard report of individual work results. Financial indicators for business startup applicationWhen switching BPOs one of the first things you need to consider is what will happen to your existing outsourced staff? Do you want to transfer them to the new BPO or do you want to start with a new team?
If you want to start with a new team, ask your prospective provider for clear timeframes around how quickly they can recruit and set up a new team, as well as finding out what recruiting costs may be involved.
If you want to bring some or all of your existing outsourced staff, you will have to be aware of the policies of both the incumbent provider and the prospective provider.
In many cases, the incumbent provider will charge a fee if you want to employ the staff directly or take them to another provider.
Staff moving to a new provider will also have a lot of questions and concerns, most notably around accumulated leave, tenure, salary continuance and retirement benefits. These are the key points you should be asking any prospective outsourcing partner.
Some providers will take a very hard line stance which can disadvantage incoming staff, while others offer a lot more flexibility. For example, when we have staff joining us at Cloudstaff from
other BPOs, we are able to carry over staff tenure for regularization, assist with salary continuance, and give the option to transfer unused leave and length of tenure for retirement benefits. We also provide all new staff with a welcome kit to help them settle into their new surroundings.
4. How well does this BPO fit with our corporate culture & values?
While outsourced staff are not directly employed by your company, they are for all intents and purposes your staff. They represent your business and your brand, which is why it’s so important to choose a BPO that fits in with your business culture and shares the same vision.
No matter how strong your business culture is, it will be difficult to incorporate your values and vision with your team without the support and compatibility of your outsourcing provider. Not all service providers out there will be the right fit.
After all, offshoring is not just about reducing costs. It’s really about taking your business to the next level, and to achieve this, everyone needs to be aligned.
When speaking to prospective BPOs don’t just ask them about their culture, because nobody thinks they have a bad workplace culture (or at least they won’t tell you about it). Instead ask them about the steps they actively take to build their culture. What incentives, programs, policies, benefits and events do they use to build culture and see if they align with your own.
Another key question to ask in relation to corporate culture is around staff retention. Unfortunately many BPOs suffer from extremely high staff turnover. At Cloudstaff we’ve managed to buck this trend by working hard to build an environment that values and supports our staff by providing regular events, training, perks and policies that respect both the staff and our clients. We have an industry leading 98.1% staff retention rate that has been independently verified.
If you are speaking with a prospective BPO with a high staff churn rate or they can’t provide you with a retention figure, you need to be asking, ‘why?’.
5. What happens when things go wrong?
If the Coronavirus pandemic has taught us anything, it is that modern businesses need to be agile, flexible and forward-thinking to be able to survive. Nowhere has this been more evident than in the BPO industry.
The BPOs that had a plan and enacted it early are still running and delivering for their clients, but unfortunately many BPOs simply couldn’t act in time. The result was clients having to cease operations and thousands of people losing their jobs.
While the global coronavirus crisis caused unprecedented business disruption, there are many regular issues and disasters that can affect your business. They range from simple power outages to full scale natural disasters, but if your outsourcing provider doesn’t have proper business continuity plans in place, then it’s your business that will suffer.
When looking to partner with a new BPO, business continuity planning is usually not at the top of most people’s list, but it should be.
Top outsourcing providers should have redundant internet and electricity sources, and many will also have multiple locations. For example, Cloudstaff has eight offices across three cities. Many of our clients choose to split their offshore teams across multiple locations. When an earthquake struck in early 2019, some offices were temporarily closed, but the businesses who split their teams across multiple offices were able to continue operating with minimal disruption. Additionally, we were quickly able to move staff from affected offices to our other locations.
Likewise when the covid crisis escalated rapidly, we enacted our business continuity plans and was able to move over 2300 staff to work remotely within a couple of days, and kept 96% of our clients active and operational.
Ultimately you can’t control when a disaster will strike, but you can be prepared. Make sure that your outsourcing provider is too.
Still need help?
Moving your operations from one outsourcing provider to another is a big decision and one with many considerations to make. We hope this guide has offered you some useful guidance.
If you would like to know more about how to switch BPOs, we would be very happy to set up a private consultation with you and your business partners to help you make the move with confidence.
Speak to us today: firstname.lastname@example.org