What is What is business process outsourcing??
What is business process outsourcing?Business process outsourcing (BPO) is hiring a third-party provider to run a defined business function like customer support, payroll, or IT helpdesk. The provider takes ownership of the people, process, and technology, and bills per seat, transaction, or fixed fee.
BPO is a subset of outsourcing that focuses on repeatable, high-volume work. When those functions move to a lower-cost country, the setup is called offshoring.
Common categories include customer support, finance and accounting, HR, IT helpdesk, and other back-office work — plus higher-value knowledge processes like analytics or research.
Key takeaways BPO shifts a defined function to an external provider under a written contract.
Pricing models fall into per-FTE, per-transaction, outcome-based, or hybrid buckets.
The Philippines and India lead global BPO delivery through 2025.
Cost drives many deals, but access to talent and 24/7 coverage matter just as much.
A service level agreement sets the quality bar and remedies for the relationship. How it worksBPO works by transferring a defined process to a specialized vendor under a written contract. You keep strategic control; the provider owns staffing, tools, and daily execution.
Pricing usually follows one of four models — per-seat, per-transaction, outcome-based, or a hybrid mix.
Companies choose BPO for three reasons: lower cost, access to specialized talent, and the ability to convert fixed headcount into variable operating expense. Most enterprise buyers combine two or three of these goals in the same contract.
Most engagements start with discovery. The client documents the process, sets KPIs, and defines escalation paths. The provider then hires, trains, and shadows before going live — typically 6 to 12 weeks.
The pricing model shapes risk. Per-seat fees favor steady work; outcome-based fees push accountability onto the provider. Most contracts also include a service level agreement that ties bonuses or penalties to defined performance targets.
Model
How you pay
Best for Per FTE (seat)
Fixed monthly rate per agent
Steady-volume work like inbound support Per transaction
Set fee per call, ticket, or invoice
Variable-volume back-office tasks Outcome-based
Tied to a KPI like CSAT or collections
Mature processes with clean metrics Hybrid
Base FTE rate plus variable bonus
Long-term partnershipsContracts usually run 2 to 5 years with annual price adjustments. Buyers should build off-boarding clauses upfront so the process can move back in-house or to another vendor if performance slips.
The upside is clear: cost reduction of 30-60%, faster staffing, and 24/7 coverage using follow-the-sun teams. The trade-off is management overhead, cultural distance, and dependency on a single provider for critical work.
Provider selection now weighs security posture and data residency more than a decade ago.
GDPR, HIPAA, and PCI-DSS obligations flow from the client to the provider. Contracts spell out audit rights, penalty clauses, and breach reporting windows.
Location choice matters. Providers in the Philippines and India deliver English-language support at 40-70% below onshore rates, while nearshoring to Mexico or Colombia buys time-zone alignment. Onshoring stays domestic but costs the most.
ExamplesBPO delivery clusters into three archetypes — call center hubs, knowledge process shops, and nearshore bilingual centers. Global BPO revenue reached USD 347.95 billion in 2024 with a projected 10.05% CAGR through 2035, per Precedence Research.
Buyers often start in the Philippines. English fluency, Filipino traits and values, and Western-facing culture reduce onboarding friction. It remains the top outsourcing destination for voice work heading into 2025.
Philippines call centers. The Philippines IT-BPM sector booked around USD 40 billion in 2024 with about 1.9 million employees, targeting 2.5 million by 2028.
Concentrix, Teleperformance, and TDCX all run major Manila and Cebu call center campuses. See the Top 40 BPO companies in the Philippines and this guide to call centers for hire.
India knowledge process outsourcing. Knowledge process outsourcing firms in Bengaluru and Gurgaon handle equity research, legal review, and analytics for Wall Street. WNS, Genpact, and EXL all posted multi-billion-dollar revenues in 2024.
Latin America customer support. Colombia, Mexico, and Costa Rica attract US fintechs and SaaS platforms wanting Spanish-English bilingual agents. Rankings on Clutch show Bogotá firms among the fastest-growing between 2022 and 2024.
Global finance and IT support. Accenture, IBM, and Cognizant deliver ERP support, cloud operations, and finance-and-accounting from delivery hubs in Poland, Ireland, and India. Their contracts often span 5 to 10 years and blend BPO with technology services.
Enterprise BPO deals are becoming more outcome-linked. Rather than paying per seat, buyers in 2024 increasingly pay for defined KPIs like first-call resolution or completed orders, which pushes performance risk back to the provider.
Related terms Offshoring: the practice of moving business functions to distant, lower-cost countries. Nearshoring: outsourcing to a country in a similar time zone, often for language or cultural fit. Onshoring: keeping outsourced work inside the client's home country. Knowledge Process Outsourcing: outsourcing of higher-value analytical or specialist work such as research or legal review. Call Center: a facility built to handle inbound or outbound customer calls at scale. Back-Office: the non-customer-facing operations that support day-to-day business functions. Service Level Agreement: the contract clause that defines performance targets and remedies for a BPO deal. FAQ What is BPO in simple terms?BPO is when a company hires another business to run a specific function like customer service or payroll. The client sets the outcomes; the provider handles the day-to-day work.
What is the difference between BPO and outsourcing?Outsourcing is the umbrella term for contracting any external provider. BPO is the subset that covers full business functions like call centers, HR, or accounting, usually delivered offshore at scale.
Is BPO only about cost savings?No. Cost is the entry point, but most mature buyers cite access to specialized talent, 24/7 coverage, and scalability as the bigger long-term wins. Cost-only deals tend to churn within 18 months.
Which countries dominate BPO?The Philippines leads voice and English-language customer support. India dominates IT and knowledge process work. Mexico, Colombia, and Costa Rica anchor Latin America's nearshore market for US clients.
What functions do companies outsource most often?Customer support, IT helpdesk, finance and accounting, HR administration, and content moderation lead the pack. Higher-value work like data analytics and legal review is growing fastest.
How do I choose a BPO provider?Match the provider's specialization to your function, check industry references, and shortlist candidates using the Ultimate Guide to Outsourcing.
Explore vetted providers at Outsource Accelerator's BPO Directory
What is an Outsourcing Company?
Outsourcing companyAn outsourcing company is a third-party firm that runs business functions — from IT to back-office work — for another firm under contract. It bundles specialised staff plus process capacity, so clients pay for outputs, not fixed overhead or headcount.
The category spans call centres, IT service firms, KPO shops, bookkeeping outfits, and dedicated offshore teams. Deals range from a five-seat inbound queue to a 2,000-agent operation.
Most contracts sit inside a defined SLA, priced by seats, tickets, or outcomes. The buyer keeps strategy and brand; the provider owns delivery, recruitment, and day-to-day management of the outsourcing work.
Key takeaways An outsourcing company delivers defined business functions for another firm under contract, priced by seat, ticket, or outcome.
Offerings span BPO, KPO, IT services, back-office, and dedicated offshore teams — from five-seat trials to 2,000-agent programmes.
Cost savings run 50-70% on labour; buyers keep strategy and IP, while providers own recruiting and delivery.
The Philippines and India dominate volume; nearshore hubs like Mexico and Colombia serve US time zones. How it worksAn outsourcing company takes over a defined process from a client, then runs it with its own staff, tools, and managers. Fees flow through a signed SLA that sets scope, response times, quality thresholds, and pricing — typically per seat, ticket, or outcome.
The engagement follows four phases: scoping, transition, steady-state, and continuous improvement. Scoping documents the workflow and success metrics. Transition trains the provider's team, then steady-state runs against the SLA with monthly reporting.
Providers charge in three common ways. Seat-based pricing bills a monthly rate per agent, common in contact centre work.
Transactional pricing bills per ticket, call, or invoice. Outcome-based pricing ties fees to KPIs like resolution time or collections recovered.
The market keeps expanding. Global BPO revenue hit roughly USD 348 billion in 2025 and is projected to grow at 10.05% CAGR through 2035, per Precedence Research.
Finance-and-accounting outsourcing alone was worth USD 54.8 billion in 2025, per Mordor Intelligence.
The Philippines IT-BPM sector generated about USD 40 billion in 2024 revenue and employed 1.9 million people, per the IT and Business Process Association of the Philippines. Growth targets aim past 2.5 million workers by 2028.
According to Gartner, customer service and support is one of the fastest-growing enterprise-software slices heading into 2026, which lifts demand for third-party contact-centre providers.
ExamplesReal-world outsourcing companies work across contact centre, IT, finance, and creative disciplines. The four examples below span geography and specialism, with Manila, Bengaluru, and Bogotá each turning up on the roster of buyers hiring in 2025.
Accenture is a global consulting-and-outsourcing firm based in Dublin. It reported USD 64.9 billion in FY2024 revenue and employs around 774,000 people. Its Manila and Bengaluru centres run banking, insurance, and IT support for Fortune 500 buyers.
Concentrix is a Newark, California-based CX and customer-service provider. It reported USD 9.6 billion in FY2024 revenue after absorbing Webhelp in 2023. The firm employs roughly 440,000 people across 70+ countries, with major Philippine and Indian sites.
TDCX is a Singapore-headquartered digital CX specialist listed on the NYSE since 2021. It reported USD 481 million in FY2024 revenue and runs sites across Malaysia, the Philippines, Singapore, and Colombia. Clients include Airbnb, Netflix, and OpenAI.
Teleperformance is a Paris-listed CX and specialised services firm founded in 1978. It generated EUR 10.3 billion in 2024 revenue and employs about 500,000 people in 100+ countries. The provider anchors Colombia's nearshore market and Portugal's multilingual hub.
Related termsBuyers often confuse an outsourcing company with adjacent operating models. Each related term below carries a distinct scope, contract shape, and pricing logic worth checking before RFP goes out.
Business process outsourcing (BPO): the parent category, covering any non-core function delegated to a specialist provider. Knowledge process outsourcing (KPO): analytics, legal research, and other judgment-heavy work priced above BPO. Offshoring: moving work overseas, whether to a captive centre or an outsourcing company. Nearshoring: outsourcing to a country in a similar time zone, like Mexico or Colombia for US buyers. Service level agreement: the contract clause that binds a provider to response times, uptime, and quality thresholds. Back office: the internal admin and finance work most commonly handed to an outsourcing company. FAQ What does an outsourcing company do?An outsourcing company runs defined business processes such as customer service, IT, finance, HR, or back-office work for another firm. It supplies the people, tools, and management under a service level agreement, then bills by seat, ticket, or outcome.
How is an outsourcing company different from a BPO?BPO is a category. An outsourcing company is any single provider inside it. All BPO firms are outsourcing companies, but the term also covers IT services, KPO, and specialist creative or engineering shops that fall outside classic business-process work.
How much does outsourcing cost?Labour rates run 50-70% below US and UK equivalents in offshore hubs. A Philippine contact-centre agent typically costs USD 8-12 per hour fully loaded in 2025, versus USD 25-35 in the US. Overheads, ramp, and management fees add 15-30%.
Which countries lead the outsourcing company market?The Philippines leads voice-based CX at USD 40 billion in 2024 with 1.9 million workers. India dominates IT and back-office at USD 250+ billion in exports. Mexico, Colombia, and Poland handle nearshore volume for US and EU buyers.
How do I choose an outsourcing company?Match the provider's speciality to the process, not the pitch; check dated financials, named clients, retention rates, and a live SLA sample. A three-month paid pilot on a small scope surfaces delivery risks before you commit to a 100-seat contract.
Compare vetted providers across the Philippines, India, and Latin America inside the OA directory.
What is a Startup?
StartupA startup is a young company founded by entrepreneurs to build a scalable business model around a product with wide market demand. Startups chase growth on tight capital, and many turn to outsourcing partners early to stretch runway while validating product-market fit.
Most startups spend their first two years chasing traction rather than profit. Founders juggle product, sales, hiring, and finance at once — which is why lean teams often route non-core work to specialist vendors.
The playbook has hardened since 2020. Startups now open offshore delivery pods in the Philippines, India, and Latin America, often before their seed round has even closed.
Key takeaways A startup is a growth-focused venture built around a scalable, repeatable business model.
Outsourcing lets founders keep headcount lean while still shipping product and serving customers on time.
The global BPO market is projected to reach USD 347.95 billion in 2025, giving founders deep vendor choice.
Common outsourced functions include customer support, bookkeeping, back-office admin, and design.
Offshore hubs like Manila and Bengaluru now host teams for Wells Fargo, Google, and thousands of scaling companies. How it worksA startup starts with a founding team, a market thesis, and seed capital, then iterates until it finds a scalable business model. Once traction appears, founders raise larger rounds and hire — usually blending in-house talent with outsourced delivery teams for cost control.
Growth is measured against a small set of numbers. Most operators track burn rate, monthly recurring revenue, activation, and retention alongside classic KPI metrics tied to each vendor engagement.
Outsourced work is governed by a service level agreement that defines quality bars, uptime, and turnaround times. That contract layer lets a 10-person startup ship like a 50-person one without lifting headcount.
The global outsourcing market sat at roughly USD 347.95 billion in 2025 and is forecast to grow at a 10.05% CAGR through 2035. That expanding market gives founders a deeper vendor bench than they had five years ago.
Per <a href="https://ibpap.org/" target="_blank" rel="noopener noreferrer">IBPAP</a>, the Philippines IT-BPM sector booked about USD 40 billion in 2024 revenue and employs 1.9 million people. Its growth target reaches 2.5 million workers by 2028. Statista's 2024 startup outlook tallied more than 150 million startups launched globally each year, and McKinsey's State of the Startup research finds that founders who outsource non-core functions early raise their next round 6-9 months faster than peers who staff every seat in-house.
Startup outsourcing model
Best for
Typical saving Freelance / project
MVP builds, one-off design
40–60% vs local Managed BPO team
Support, back-office, ops
60–70% vs local Dedicated offshore staff
Long-term product, engineering
50–70% vs localModel choice usually tracks stage. Pre-seed founders lean on freelancers for speed; Series A teams often move to a managed BPO for repeatable ops.
Series B and beyond build dedicated offshore squads reporting into a home-office manager, often anchored in Manila, Bengaluru, or Bogotá. That structure trades some setup cost for direct control and long-term retention.
ExamplesStartups use outsourcing to punch above their weight. The pattern shows up across every venture-backed cohort, from consumer apps to fintech to healthtech, and it repeats at every funding stage.
WhatsApp kept its engineering team under 55 people through acquisition by Facebook in 2014, routing infrastructure and support work outside the core team. Slack used contract designers and offshore quality assurance during its 2013 to 2014 launch phase, focusing in-house talent on the product surface. Airbnb built photography, customer service, and trust-and-safety operations through partners across Manila and Ireland before going public in 2020. Klarna and other European fintechs pushed back-office reconciliation and know-your-customer checks to nearshore hubs in Portugal and Poland while their engineering teams stayed home.Enterprise players show the same playbook at scale. Wells Fargo has run a Manila operations hub since 2011, and Google has used Philippines BPO partners since 2016.
Directory data on <a href="https://clutch.co/bpo" target="_blank" rel="noopener noreferrer">Clutch</a> lists thousands of vendors serving startups today, from single-VA shops to 5,000-seat contact centres. That spread means a Series A team can find a partner sized to their runway.
Founders can size options first with Outsource Accelerator's outsourcing calculator before signing any vendor paperwork.
The Top 40 BPO companies in the Philippines guide gives a curated shortlist to work from.
OA's insider read on why the Philippines has become the top outsourcing destination covers labour laws, talent depth, and cost bands.
Related termsStartup outsourcing sits inside a wider vocabulary of delivery models and support functions. These are the terms a founder is most likely to meet inside their first year of building the company.
Outsourcing: contracting a business function to an external provider. Offshoring: moving work to a distant, lower-cost country for delivery. Nearshoring: shifting work to a nearby country in a similar time zone.
Onshoring: keeping outsourced work inside the home country. Back-office: the internal admin functions that keep a business running day to day. Knowledge process outsourcing: outsourced work needing specialist analytical or domain skill. Call center: a centralised voice team handling inbound or outbound customer contact. FAQ What counts as a startup?A startup is a company under roughly 5 to 7 years old, still searching for or scaling a repeatable business model. Once revenue and org structure stabilise, the label usually gives way to "growth-stage" or simply "small business."
When should a startup begin outsourcing?Founders typically outsource once repeatable, non-core work starts absorbing more than a day per week — often around the seed stage. Common first roles offshore are customer support, bookkeeping, and virtual assistants. Later rounds tend to add engineering and product design.
How much can a startup save by outsourcing?Offshore delivery in hubs like the Philippines can trim staff costs by 60 to 70% versus US or UK rates, depending on role and vendor model. Freelance work saves less on paper but scales up and down much faster. The gap widens for niche roles where domestic hiring markets are tight.
Startup outsourcing versus hiring a freelancer — what's the difference?A freelancer is a single contractor engaged directly by the startup for defined deliverables. Outsourcing for startups usually means partnering with a BPO firm that runs a managed team, handles HR, and reports against agreed SLAs.
Where can founders learn more before signing a contract?The Ultimate guide to outsourcing walks through delivery models, contract risk, and vendor selection in one place. It pairs well with the calculator for a first budget pass and doubles as onboarding reading for co-founders new to the space.
For a curated shortlist of vetted delivery partners across support, marketing, and back-office, browse Outsource Accelerator's outsourcing hubs.
What is Staff Leasing?
Staff LeasingStaff leasing is an outsourcing arrangement where a third-party provider becomes the legal employer of your workers while you keep full operational control of what they do day to day. The provider owns HR, payroll, taxes, and benefits in the host country — usually the Philippines — while you direct tasks, set KPIs, and manage quality.
The model sits between full outsourcing and direct offshore hiring, so companies get the cost profile of an offshore team with the operational grip of a house team.
Vendors in Manila, Cebu, and Clark bundle seat, IT, and management overhead into a single monthly rate. Contracts run per full-time equivalent, and every candidate clears client-side interviews before onboarding.
Key takeaways Staff leasing shifts the legal employer to a third-party BPO while you keep operational command of the offshore team.
Philippine rates typically bill at USD 8–15 per hour fully loaded, versus USD 25–45 onshore in the US.
Fees bundle wage, statutory benefits, seat, IT, and compliance into one per-FTE monthly charge.
Contracts usually run month-to-month or annually, with a 30-day notice standard.
The model fits companies wanting offshore scale without registering a foreign entity. How it worksA staff leasing engagement splits ownership. The leasing firm signs employment contracts, files taxes, and runs payroll in-country. You interview candidates, assign work, and manage day-to-day performance against agreed KPI metrics and the service level agreement.
Billing is one per-FTE rate covering wage, statutory benefits, seat, IT, and provider overhead. Because the vendor is the legal employer under host-country law, US and UK clients never trigger foreign registration.
Onboarding typically runs 4–8 weeks — role scoping, joint sourcing, client interviews, offer, then induction on your tools. Most vendors offer a 3-month probation with free replacements if fit fails.
Layer
Client owns
Leasing firm owns Legal employment
None
Contract, taxes, statutory filings Work direction
Tasks, KPIs, quality bar
None Facilities
None
Seat, PC, internet, licenses Payroll
None
Salary, 13th month, HMO, SSS/PhilHealth Escalations
Performance calls
HR complaints, disciplinary processAccording to Precedence Research, the global BPO market, which includes staff leasing, hit roughly USD 347.95 billion in 2025 and is projected to grow at a 10.05% CAGR through 2035. Analyst work from McKinsey and Gartner frames staff leasing as the fastest-adopted BPO format because it needs no long process transition.
ExamplesStaff leasing shows up wherever companies need offshore scale without legal setup. Customer service teams for e-commerce brands, back-office finance staff for accounting firms, and dev pods for SaaS startups all use the model in the Philippines.
Concentrix and Teleperformance run staff leasing lines beside full-service BPO for mid-market Western clients. A US SaaS company might lease 40 support agents through Concentrix Manila, paying a fixed FTE rate while directing coaching, scripts, and Salesforce workflows internally.
Smaller vendors like Booth & Partners and MicroSourcing target startups and small and medium-sized enterprises (SMEs). The model suits founders who can't yet justify setting up a foreign entity. A UK fintech, for instance, might lease five compliance analysts through MicroSourcing at Ortigas while keeping visibility over Jira boards and standups.
Legal offshoring firms use staff leasing to place paralegals with US and Australian law practices. In 2024, the IT and Business Process Association of the Philippines counted roughly 1.7 million sector workers, with staff leasing a growing share as first-time offshore adopters enter the market.
For a fuller side-by-side, see the staff leasing vs seat leasing vs BPO vs BOT comparison — the four models overlap but split legal, operational, and infrastructure ownership differently.
Related termsStaff leasing sits next to several outsourcing models. Some overlap on cost and location; others differ meaningfully in what the vendor owns and who signs the paycheck.
Business process outsourcing: Vendor owns the process end-to-end, including its own management layer. Offshoring: Any work relocation to another country, whether via a third party or not.
Nearshoring: Offshoring to a nearby time-zone country, common for US-to-Latin America pairings.
Onshoring: Relocating work within the same country, not offshore. Back office: Non-customer-facing functions frequently placed under a leasing arrangement.
Knowledge process outsourcing: Higher-tier analytical work increasingly delivered via staff leasing. Call center: Customer voice operations often staffed through leased teams in Manila and Cebu.
Contact center: Omnichannel version of call centers, similarly staffed under leasing. FAQ How is staff leasing different from full outsourcing?Full outsourcing hands the vendor an entire process, KPIs and management included. Staff leasing keeps the process yours; the vendor's role stops at legal employment and infrastructure. See the staff leasing vs full outsourcing offshoring to the Philippines breakdown for the trade-offs.
Does the client or the leasing firm decide who gets hired?The client. Staff leasing vendors run sourcing and initial screening, but every candidate must pass the client's interview loop before offer. If a hire underperforms, the client flags it; the leasing firm handles the exit under Philippine labor law.
What functions can be staff leased?Customer service, telemarketing, virtual assistant work, back-office finance, IT support, software development, inbound and outbound call center operations, HR administration, legal research, and knowledge process outsourcing all commonly run under leasing. As outsourced team models matured through the pandemic, complex analyst work joined the list.
How much does staff leasing cost in the Philippines?Fully loaded FTE rates typically fall between USD 8–15 per hour, versus USD 25–45 for the same role onshore in the US. The rate covers wage, statutory benefits, HMO, seat, IT, and provider overhead in one monthly line item.
Is a staff leasing worker my employee?Legally, no. The leasing firm is the employer of record, signing the contract, paying tax, and issuing statutory benefits. Operationally, the worker sits inside your team, embedded in your tools, standups, and reporting lines.
Which countries dominate staff leasing?The Philippines leads for English-language outsourcing, followed by India for technical work and Poland or Colombia for nearshoring. The Philippine market's scale (1.9 million IT-BPM workers as of 2024 per IBPAP) makes staff leasing especially mature there.
For a broader look at Philippine market depth and vendor selection, see the Ultimate Guide to Outsourcing, the Top 40 BPO companies in the Philippines, and OA's BPO directory. Compare rates and build a shortlist on the Outsource Accelerator platform.
Independent
