Staff leasing vs. full outsourcing: offshoring to the Philippines
Staff leasing vs full outsourcing: which is better for offshoring to the Philippines?
For most companies offshoring to the Philippines, staff leasing beats full outsourcing because it costs less, sets up faster, and gives you more control over your team.
- Staff leasing lets you interview and pick your own staff.
- Full outsourcing hands the whole function to the provider’s existing team.
- As a result, staff leasing offers lower cost and better control for most needs.
Offshoring to the Philippines is now the preferred model for many companies in the United States, Canada, Australia, Singapore, and Northern Europe. From SMEs to multinationals, firms see it as a practical move. The reasons are clear: a deep talent pool, solid infrastructure, strong technical skills, and high English proficiency.
For many firms, the country is now the top outsourcing destination. Historically, companies chose full outsourcing to business process managers in the Philippines. However, some foreign firms set up their own back-office operations there. These are known as captives.
Meanwhile, another option called Staff Leasing now gives companies a cheaper, quicker path. Staff Leasing gives you better control of your offshore team. So you work with staff who were shortlisted by the provider, then interviewed and accepted by you. In short, you do not inherit fixed staff from the provider.
Full outsourcing fully manages the outsourced function, such as HR and payroll. It runs on the provider’s CRM and systems. However, it has a long setup timeline. In fact, it is the most expensive offshoring option available.
| Staff Leasing | Full Outsourcing | |
| Setup Time Frame | Provider can start sourcing candidates as soon as contract is signed | The provider needs to set up alignment meetings first since the client needs to approve their systems, processes, tech, etc. |
| Employee Selection Process | The provider conducts end-to-end candidate selection with strict guidance from the client, from screening up to semi-final interview | Clients work with employees under the outsourcing firm and often deploys management from the head office to the outsourcing provider’s office |
| Inclusion in Administrative Activities (for employees) | Employees can address their concerns to both the provider and the client | Employees answer primarily to the outsourcing provider |
| Length of Integrating Business Functions | 2 weeks (min) – 3 months (max) | 2 months (min) – 5+ months |
| Main Differences |
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Staff leasing
Staff Leasing is an efficient, affordable offshoring/outsourcing model. So it gives you strong control over your offshore staff. Here, you hire a Staff Leasing provider to run the screening and hiring for you.
Staff leasing steps
- The client meets and discusses their requirements with the service provider
- The provider creates a proposal/agreement based on the meeting
- The provider begins the sourcing and recruitment process
- The staff leasing company screens qualified candidates for final interview with the client
- The provider hires the client’s preferred candidates
- The provider provides leased employees with private office
Full-service staff leasing providers like KMC Solutions handle each step end to end. So this covers sourcing and recruitment through to premium managed offices across Metro Manila, Cebu, and other key hubs. In addition, IT, HR compliance, and infrastructure are all included.
This service helps companies save up to 70% on payroll while lifting productivity. As a result, it suits companies of all sizes that want to offshore jobs to the Philippines. The low average salary in the Philippines, plus control over hiring, makes Staff Leasing a smart business solution. So many firms use it to fill common roles outsourced to the Philippines.
Full outsourcing
Full Outsourcing hands an entire company function to an outside provider. Because the provider runs every part of that work, clients can focus more on profit. However, full outsourcing is expensive. In addition, it gives you little control over staff and comes with long timelines.
Outsourcing a whole operation can take months of preparation. For example, it needs proposals, document reviews, and calibration. So it is not ideal for a company that needs leased staff right away.
Which method is better?
Full Outsourcing can fully manage part of your operations. Still, Staff Leasing is the stronger option for most firms. Full Outsourcing can take non-core tasks off your plate, but it does so at the highest cost.
Long processes and higher costs come built into full outsourcing. Meanwhile, they are rare in the Staff Leasing model. In addition, it is more practical to pick your own candidate. With full outsourcing, fixed staff handle the complex, specialized tasks.
Overall, Staff Leasing brings less risk, more control, and better value if you want to build a back office and offshore team in the Philippines. Full outsourcing can still help. However, if you want quality output at a lower cost with better control, Staff Leasing is the model for you. To get the most from either path, follow these best practices for offshore teams.
Frequently asked questions about staff leasing and full outsourcing
What is the main difference between staff leasing and full outsourcing?
With staff leasing, you interview and pick your own staff, and you manage them day to day. With full outsourcing, the provider’s existing team runs the whole function. So staff leasing gives you more control.
Why do companies offshore to the Philippines?
The Philippines offers a deep talent pool and strong English skills. In addition, labor costs are lower than in many Western markets. As a result, it is a top choice for offshoring.
How fast can staff leasing get started?
Quite fast. A provider can start sourcing candidates as soon as you sign. In most cases, teams are up and running within two weeks to three months.
Is full outsourcing ever the better choice?
Sometimes, yes. Full outsourcing suits firms that want to hand off a whole function and step back. Still, it costs more and takes longer to set up.
How much can staff leasing save on payroll?
Providers report savings of up to 70% on payroll. Meanwhile, productivity often rises too. So the model works well for both cost and output.
Independent
