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Over the last couple of years, business process outsourcing (BPO) has become a familiar business model, especially among promising startups or businesses on the cusp of rapid growth and expansion. While COVID-19 and remote working engagements expedited the adoption of outsourcing solutions, there is so much more to the industry. We compiled this Outsourcing 101 article series to explore the benefits of outsourcing and to unpack some of the concerns keeping businesses from engaging BPOs for support.


Outsourcing explained

Outsourcing refers to the practice of contracting a third party to handle tasks, provide services, or run a part of your operations. Businesses usually partner with outsourcing companies to manage various activities like customer service, talent management, recruitment, IT, accounting, manufacturing, and more.

A significant challenge faced by companies is effectively handling aspects of their operations in which they lack the required expertise or resources. By outsourcing these processes, they can focus on their core business while entrusting experts to handle the rest of their operations. While some models maintain your active role in team management, others delegate this responsibility to your trusted outsourcing partner.

In 2022, the global outsourcing industry was valued at USD 261.9 billion. However, recent studies suggest that it is set to reach USD 525.2 billion by 2030. Derek Gallimore from Outsource Accelerator has predicted that the Philippines would experience an explosion in the BPO sector during that period, which could create around 40 million jobs and generate close to USD 600 billion.


The types of outsourcing models

Before planning to outsource, it’s important to understand the different outsourcing approaches available in order to determine which one fits your company’s requirements best. The main difference between these models is where your partner is located:

Onshore: Onshoring refers to partnering with a third party located within your country. This type of outsourcing model can guarantee that there will be no language barriers or cultural differences. Time zones vary slightly, but the work culture remains the same. However, this model is restricted to a limited talent pool and tends to come with comparable pricing structures.

Nearshore: Nearshoring is the practice of outsourcing to a neighboring country. It is perhaps one of the most popular models in the US. According to Bloomberg, 80% of companies in North America are actively considering nearshore outsourcing solutions. The similar time zones and the reduced long-term costs compared to onshoring or offshoring alternatives make nearshoring an efficient and cost-effective way to build a team.

Offshore: Offshoring is when your outsourcing service provider is located in a different country with different time zones. This model can be useful if you are looking to increase your service coverage to 24/7, referred to as chasing the sun, or if you are looking for a flexible workflow.


Let’s talk about the benefits

The outsourcing industry has been growing exponentially. Companies have found several advantages to partnering with external service providers that go beyond cost reduction. Here are some of the main benefits:

Improved focus on core business tasks

One of the main benefits of outsourcing is having the time, energy, and resources to focus on what your business does best. By entrusting specialized functions to your outsourcing partner, your company can dedicate its efforts to innovate, plan, strategize, and grow your business. Caraway experienced rapid growth during the pandemic and quickly realized that the outsourcing of specific support processes would enable its in-house teams to focus on the company’s growth.

Access to a global talent pool 

Deciding to look for fresh talent in other locations can benefit your business in multiple ways. Having a global team will not only increase your company’s ability to achieve customer success but also provide diversity for the team and foster a stronger work culture. When Tractive wanted to expand its global footprint, it required multilingual teams to augment its customer support, which became possible through outsourcing.

Time zone coverage

Having a team located in different time zones offers the advantage of extending your existing coverage. This allows your business to provide round-the-clock support to your customers, increasing customer satisfaction while being able to address urgent issues promptly and overcoming the limitations associated with operating within a single time zone, leading to increased productivity in your operations. In preparation for Brooklinen’s Black Friday/ Cyber Monday seasonal ramp-ups, we created a personalized team, drawing from advocates and specialists across Canada, Mexico, South Africa, and the Philippines.

Decreased costs

The most popular reason why companies choose to work with an outsourcing provider is due to its cost-effectiveness. This allows you to get the job done by experts at a fraction of the expense, as these providers absorb the costs of infrastructure, training, office space, and administrative responsibilities.


Is outsourcing the right choice for your company?

The most important questions to ask before engaging an outsourcing partner are:

  • Is your company in need of specialized services?
  • Are you experiencing rapid growth and need to scale your support teams?
  • Are you unable to keep up with your talent acquisition requirements?
  • Are you looking to expand your talent pool?
  • Do you find it difficult to manage every process of your operation?
  • Are your operational expenses too high?

If you replied yes to any of these questions, it might be time to start looking for an outsourcing partner that fits your needs.

We specialize in delivering high-quality, seamless customer experiences for our values-aligned clients while empowering our team members to develop and grow. We create strategies focused on generating long-term value for our clients by forming global teams that evolve, scale, and align with your organization.

While we have helped many clients to pivot or scale their support structures, our integrated business model reflects our mission to address the limitations of traditional outsourcing. Not only are we a B Corp-certified ethical outsourcing company, but we aspire to make a lasting, positive change in the communities we operate in. If you are curious about outsourcing and Boldr sounds like a possible fit, then reach out to us.


Aitana Rangel Garibay is Boldr’s Creative Writer and she is passionate about writing purpose-driven stories.