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Labor Union

Definition

What is a Labor Union?

A labor union or trade union is a shared association of employees who meet together to create agreements on the conditions that affect their jobs. In history, the labor union has a difference in salaries to a higher-degree for low-skilled than for high-skilled jobs. As a result, the union is reducing income disparities.

Labor unions have a massive effect on the employment and daily lives of both unionized and non-unionized workers. Reports and studies have shown the impact of labor unions on wages, marginal gains, overall salaries, pay inequalities, and security in the workplace.

What is a Labor Union
What is a Labor Union?

Importance of labor unions

Labor unions are vital because they tend to set requirements for education, skills, salaries, working conditions, and the quality of life of employees. Union-negotiated earnings and benefits are typically greater than those enjoyed by non-union employees. Here are other advantages of labor unions:

  • Labor unions aim to provide our country with economic justice for the workers and social justice. 
  • Labor union employees are getting better pension benefits. Not only are they more likely to get a fixed retirement payout. Their employers are also paying 28 percent more to their advantage.
  • The influence of labor unions on overall non-union employment is about as massive as the impact on total union wages.
  • Labor union workers are more likely to earn paid leave than non-unionized workers. 
  • Workers under the union labor have 18 to 28 percent more healthcare advantage and 23 to 54 percent more likely to provide employer-provided pension plans.
Outsourcing FAQ

What is What is business process outsourcing?

What is Business Process Outsourcing BPO?

Business Process Outsourcing (BPO) is the delegation of business processes to an external service provider to a nearby or farther location. BPO uses various technology-enabled services to optimize the delivery of services.

Some of the usual outsourced business functions are the following.

Payroll Accounting Human resources Customer service Sales Marketing

In the case of content providers, these could mean hiring writers, remote editors, or virtual assistants.

BPO speeds up processes and enhances efficiency. Companies that outsource some of their business processes use their time on core services and competencies.

With this shift in focus, companies improve their current processes which may result in improved customer satisfaction. BPO helps companies divert their resources to more critical business strategies.

Often, companies find it impractical to hire a full-time position in-house because of the cost associated with doing so. Outsourcing services can also help them save costs and resources in hiring suitable employees.

How does Business Process Outsourcing work?

Business process outsourcing happens when a business taps a third-party service provider to operate some of its internal processes. Such ‘processes’ include customer service, accounting and finance, or sales.

It is different from hiring an agency to do specific tasks, as the outsourcing provider (BPO) is more concerned with the ongoing production of labour-intensive tasks, instead of the higher-level strategy and guidance.

Now, business process outsourcing has broadened and is more akin to staff augmentation, or staff leasing.

What are the benefits of business process outsourcing?

There are many benefits to outsourcing, as well as some downsides and risks. The common benefits include:

Cost savings

Companies can enjoy savings of up to 70% by leveraging the salaries and costs in countries such as the Philippines and India.

Global market

Businesses get to access a bigger pool of talent that can fit their requirements. They can have better options in hiring employees since they are not limited to what is available in their home countries.

Global presence

At the same time, business process outsourcing opens clients to global trade opportunities. They can establish their global presence and expand more easily to other locations since they already have operations in the area.

Flexible workforce

BPO reduces internal local compliance obligations including providing additional office spaces to employees. Instead, organizations can hold their business operations on a remote setup, most usually having their teams in an office provided by the BPO firm.

Leverage skill

Companies cannot always do everything on their own. BPO enables them to leverage the skills of other specialist companies on more complex tasks such as accounting and IT.

Focus

Lastly, BPO enables organizations to focus on their core business functions. This is since most of their non-core business operations are done with the help of a reliable service provider.

Business process outsourcing examples

The business process outsourcing sector is a vast industry, generating over $200bn annually, and employing millions of people worldwide.

BPO can be seen in different forms and contexts, from hiring single staff to getting an offshore team. Some examples of BPO include:

Big enterprise

Facebook and Uber outsource many of their operational functions, including content moderation for Facebook, and customer service for Uber

Medium-size businesses

A medium business with 50-500 staff might outsource the labour-intensive accounting and finance functions to a team in the Philippines.

Small business and entrepreneur

It is common for small business owners to have a Virtual Assistant (VA) working for them full time and remotely from the Philippines.

What are the different types of BPO?

The type of business process outsourcing can be characterised by their specialisation, location, and size.

Generalist or specialist BPOs

Business process outsourcing is in the human resources and professional services sector. However, their services extend across all industries. The majority of BPOs are generalists, in that they offer a full range of professional services.

Meanwhile, some specialise in certain verticals such as the following.

Legal process outsourcing

Legal process outsourcing deals more with delegating legal processes and compliances to legal firms in another area.

Knowledge process outsourcing

Meanwhile, knowledge process outsourcing enables companies to outsource knowledge-related work including research and development, innovation, and creatives.

Location

Business process outsourcing typically operates from developing nations such as the Philippines, India, and Colombia. They typically have cheaper cost-of-living and bigger populations. Different locations offer different advantages.

Size of BPO

The bigger BPOs employ more than 250,000 people. They are huge, global operations. Medium-sized BPOs range from 500-5,000 staff and offer a full range of services. The smaller BPOs might have 1-500 people.

Functions of business process outsourcing

Collectively, business process outsourcing provides any kind of staffing solution. Common functions of BPO include:

Finance and accounting

Outsourced finance and accounting services help businesses manage their books, monitor cash flow, and keep up with corporate income tax compliances without fuss.

Healthcare

Healthcare outsourcing, meanwhile, organizes various back- and front-end functions done for the healthcare and insurance industries.

Creative and content

Creative services outsourcing covers everything from post-production of Hollywood movies to newspaper and website content.

Tech, IT and development

IT outsourcing involves delegating network management, web and app development, and cybersecurity protection to IT firms in different countries.

Sales & customer support

Some BPO providers specialize in sales and customer support for pre- and post-sales transactions. This helps companies meet the expectations and demands of their customers, keeping them satisfied even after their purchase.

Marketing

BPOs and marketing firms can help in ongoing marketing, communication and branding activities for their clients. This helps them attract more suitable leads in a cost-efficient way.

Talent and HR

Businesses can delegate HR, recruitment and compliance to professional employer organizations to maximize recruitment and workforce management.

Administration

Generalist BPOs help organizations accomplish general business administration and operational activities. This includes data entry, appointment setting, and other related functions.

Supply chain management

Lastly, e-commerce stores benefit from outsourcing supply chain management to manage warehouse and delivery processes.

Top BPO companies in the world’s top outsourcing hubs

A wide range of business process outsourcing companies in different parts of the world provide utmost services to their Western and local clients. Many of them even earned recognition by award-giving bodies due to their performance in both their roles and their level of care for the employees.

Check out the top BPO companies in several outsourcing destinations below.

Top BPO companies in the Philippines Top Indian BPO companies Top South African BPO companies Business Process Outsourcing (BPO) services

With the rise of new offshore outsourcing locations, companies can have better options in terms of location and services they can delegate. However, finding a suitable BPO company can be a daunting task to be done on their own.

Good thing advisory services such as Outsource Accelerator is there to help them.

Outsource Accelerator is the most trusted source for independent information & advisory for Business Process Outsourcing (BPO). We have over 5,000 articles, 350+ podcast episodes, and a comprehensive directory with 2,500+ BPOs from different locations.

Outsource Accelerator's offerings make it easier for clients to learn about, and engage with, business process outsourcing companies worldwide.

Want to learn more about outsourcing? Check out the Inside Outsourcing book as well as the Inside Outsourcing book review today!

What is Full-time Equivalent (FTE)?

Full-time equivalent (FTE) definition

In human resources, full-time equivalent (FTE) refers to the unit of measurement that each business owner uses to indicate the working hours of a call center agent. The employer uses FTE to track the agent’s full-time or part-time involvement in a project or organization.

FTE can standardize wages by demonstrating the equivalent salary of part-time agents based on working full-time. For part-time workers, determining the pro-rata is by changing their working hours with the help of FTE.

Importance of full-time equivalent

Calculating FTE is crucial mainly for accounting purposes in the business. It determines the wages and the calculation of the company expenses needed to pay the employees.

FTE helps the employer develop an understanding of the performance and effectiveness of the part-time employee. It is a useful measurement because it helps budget analysts, project managers, and business owners estimate labor costs.

By determining the complete FTE headcount of full-time employees that a business needs, team leaders, budget analysts, or employers can better forecast the funds they will need to continue the operations of the company or finish a given project.

The FTE count also plays a vital role in determining which positions — whether in a large corporation or a small business — should be full-time and which should only be part-time. The management usually works with human resources on this decision.

One FTE is usually equal to one job vacancy. When it comes to part-timers who are sharing one job, they can be considered equal to one FTE. Meanwhile, some jobs do not require "whole" FTE at all.

Moreover, FTEs play a vital role in monitoring the salaries of part-time employees since they are generally paid less and do not receive the same benefits as full-time workers.

How to calculate the full-time equivalent 

Many BPO companies are using the FTE calculation for various purposes. The calculated data is useful for benchmarking revenues or earnings per employee.

Converting the hourly wages of part-time employees into full-time equivalents may be beneficial in evaluating these metrics.

To calculate the full-time equivalent, determine the employee’s scheduled hours and then divide it by the employer’s hours for a full-time workweek.

 

FTE payroll

FTEs are most widely used by companies to determine their employees’ workload and payroll. If the company has part-time employees, this helps determine if their working hours add up to the same number of a full-time staff's total weekly hours.

For payroll purposes and determining wages, the full-time equivalent assists in calculating salaries. The FTE of a full-time employee is the baseline of a part-time employee’s pay.

For example, if a full-time employee’s salary is US$100,000, a part-timer that works in the same role 20 hours per week with a 0.5 FTE value would make US$50,000 in their payroll. Another part-timer who works for 30 hours per week with a 0.75 FTE would earn US$75,000.

FTE in a nutshell

When a company mainly has part-time employees, business owners can be keen to convert their total hours worked into an FTE basis to compare headcount needed between part-timers and full-time employees.

Project managers can then utilize these converted data for several analytical observations that could help the company's finances. This includes comparing the total number of employees to profit and revenues that are earned by the business on an annual basis.

Converting staff headcount to FTE also assists the business when it is comparing the company's total employee number to competitors within the industry.

What is Impact Sourcing?

What is impact sourcing?

Impact sourcing, also known as socially responsible outsourcing, is a BPO model that aims to employ people at the base of the pyramid. These are people who were previously unemployed for a long time or are living below the national poverty line. 

The main goal of impact sourcing is to improve the situation of people living in economically disadvantaged areas and at the same time provide high-quality services to both domestic and international clients. This model was originated by the Monitor Group and the Rockefeller Foundation back in 2010.

Impact sourcing companies

There are associations that help companies in different countries, such as Accenture, Alorica, and Teleperformance. Associations like the Global Impact Source Coalition and ImpactHub provide resources and assistance to companies and match the companies to developing countries according to the latter’s needs and resources.

Outsource Accelerator provides you the best outsourcing companies in the Philippines, where you can save up to 70% on staffing costs. We have over 3,000 articles, 200+ podcast episodes, and a comprehensive directory with 700+ BPOs… all designed to make it easier for clients to learn about, and engage with, outsourcing.

What is a Freelancer?

What is a freelancer?

A freelancer is often hired for a particular job or fixed project who has the freedom to work flexible hours on these projects. Being self-employed, it is common for freelancers to handle multiple clients at any given time.

A freelancer can specialize in various project-based jobs, such as writing, graphic designing, web developing, digital marketing, and a lot more. Freelancers work remotely with usually flexible working hours, as long as they are able to meet client deadlines. One disadvantage of being a freelancer is having no certain mandatory benefits shouldered by an employer.

Freelancers can be a great addition to an existing workforce for businesses who look for cost-effective service and high-quality work. Freelancers are perfect for small to medium business owners who are looking for excellent outsource partners who can work independently and can be productive under minimum supervision.

 

Freelancing and outsourcing

Outsource Accelerator specializes in helping small & medium sized enterprises (SMEs), with 2-500 employees, typically based in the high-cost English-speaking world. We are the experts in transforming these businesses with outsourcing.

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About OA

Outsource Accelerator is the trusted source of independent information, advisory and expert implementation of Business Process Outsourcing (BPO).

The #1 outsourcing authority

Outsource Accelerator offers the world’s leading aggregator marketplace for outsourcing. It specifically provides the conduit between world-leading outsourcing suppliers and the businesses – clients – across the globe.

The Outsource Accelerator website has over 5,000 articles, 350+ podcast episodes, and a comprehensive directory with 3,000+ BPO companies… all designed to make it easier for clients to learn about – and engage with – outsourcing.

About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.