Shrinkage

What is Business Process Outsourcing (BPO)?

Business Process Outsourcing (BPO) is the engagement of services from a third-party provider. BPO uses various technology-enabled services to hasten the delivery of services. The business activities could be back-office such as, but not limited to, payroll, accounting, human resources, or front office jobs like customer service, sales, and marketing, etc. In the case of content providers, these business activities could mean hiring writers, remote editors, or virtual assistants.

BPO speeds up processes and enhances efficiency. Companies that outsource some of their business activities use their time on core services and competencies. With this shift in focus, companies improve their current processes that 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.

When a business engages an external specialist to manage and operate some of its internal processes, it's referred to as business process outsourcing. 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.

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

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

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

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

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

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

Business process outsourcing is in the human resources and professional services sector. However, their services extend across all industries. The majority of BPOs are generalist, in that they offer a full range of professional services, although some specialise in certain verticals (ie accounting, or animation).

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

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.

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

Outsource Accelerator is the most trusted source for independent information & advisory for Business Process Outsourcing (BPO). We have over 4,000 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, business process outsourcing.

What is Idle Time?

Idle time, sometimes comparable to waiting time, is the period of time when an employee, machine, or commodity is ready and available but is unproductive. Minimizing idle time is crucial if a company wishes to optimize productivity and efficiency over a long time.

Companies should learn and track down idle time to figure out the difference between the current productivity levels. Simply put, any minute the computer or employee is idle is a minute of wasted productivity. Idle time is costly because the company needs to pay its staff, who are at that point, did not make any profit or income for the company.

There are two major types of idle time, Normal Idle Time and Abnormal Idle Time.

What is Agent Occupancy?

Agent occupancy means that the percentage of time spent on answering inbound calls by a call center agent is against the available or idle time. It can be measured by dividing the workload time by staff time. It is a statistic used to measure the efficiency of a call center agent.

The agent occupancy is sometimes confused with the utilization of agents. Both metrics have the same numerator but they have different denominators. The agent occupancy denominator is the cumulative time the speech, text, or chat agent logs into the framework, far different from agent utilization. Meanwhile, agent utilization indicates the overall time consumed by an agent through chat, voice, and email.

Agent occupancy is a standard and significant service desk indicator for monitoring and trends. This is because it gives an example of how active agents are when logging into the system. However, for the reasons outlined. The Occupancy Rate and the Service Level will inform you whether the personnel level is set correctly for any given period.

Here is the formula for agent occupancy rate:

Agent Occupancy Rate = Handle time (talk time + after call work time) / time signed into a queue.

What is Staff Leasing?

Staff leasing is where companies partner with a 3rd-party that will handle the administrative aspects of employment, such that the 3rd-party is the legal entity that employs the staff. This is similar to seat leasing where a company that already has the infrastructure in place, will lease the use of that infrastructure to other companies. In the case of staff leasing, that infrastructure is the HR, payroll, and other employment-related processes; in the case of seat leasing, the infrastructure is the IT and telecommunications equipment only.

Depending on the need of the client, staff leasing companies can either provide the employees using their pre-existing pool of candidates, or the client company can handle the recruitment efforts while the staff leasing company handles the compensation and other sundries. Thanks to the scale of staff leasing outsourcing companies, they are in a position to offer more competitive benefits, such as lower-cost healthcare plans, to which smaller companies would not have access to. In turn, clients not only save on administrative costs, but the cost of an employee turns into a single line-item for easier accounting.

Staff leasing is arguably the most popular type of business process outsourcing, where both employee and infrastructure is provided by the outsourcing company. Lessening the financial risk to the client should they decide to scale their outsourced team in the Philippines.

Outsource Accelerator's directory lists over 700+ outsourcing companies in the Philippines. All of these are carefully selected for innovation, expertise, and technology that will benefit our clients. We also provide you with guidance on the best staff leasing options you can get in the Philippines for your business.