Unlocking Efficiency: Outsourcing Human Resources in the Philippines - Business Cases

Joel Lienard
September 27, 2023 

For confidentiality, the name of our clients have been removed.

Business Case 1: Outsourcing HR for a FinTech Company

Company Background

XYZ FinTech is a rapidly growing financial technology startup based in London, United Kingdom. The company specializes in digital payments and blockchain solutions, and its innovative technologies have attracted global attention. As XYZ FinTech continues to expand, its HR needs have become increasingly complex, requiring a more efficient and cost-effective solution.

Challenges

1. Rapid Growth: XYZ FinTech is experiencing rapid growth and needs to scale its workforce quickly to meet market demands.
2. Compliance: The company operates in a highly regulated industry and must ensure strict compliance with financial regulations and data protection laws.
3. Limited HR Expertise: The existing HR team lacks the specialized knowledge required for handling FinTech-specific HR functions.
4. Resource Allocation: Managing HR internally is diverting resources from core business activities.

Solution

Outsourcing HR functions to a reputable provider in the Philippines offers several advantages for XYZ FinTech:

1. Cost Savings: HR outsourcing is expected to reduce operational costs by approximately 30% in the first year. This reduction includes savings in salaries, benefits, office space, and HR technology costs.
2. Access to FinTech HR Experts: The chosen outsourcing provider specializes in HR services for FinTech companies and aims to improve efficiency in HR processes by 25%. This improvement includes faster recruitment, streamlined onboarding, and more accurate payroll processing.
3. Scalability: As XYZ FinTech continues to expand globally, HR outsourcing provides flexibility in scaling HR functions up or down as needed, leading to an estimated 20% improvement in scalability. This scalability ensures that HR can adapt to the changing needs of the organization without additional hiring or downsizing costs.
4. Compliance: The outsourcing provider ensures compliance with both Philippine labour laws and global financial regulations, reducing legal risks by 35%. This compliance assurance includes adherence to data protection laws, financial reporting regulations, and industry-specific requirements.

Benefits

1. Efficiency: HR processes are streamlined, enabling faster recruitment, onboarding, and payroll processing, resulting in a 40% increase in HR process efficiency. This improvement translates into reduced time-to-fill job vacancies, reduced onboarding time, and more accurate and timely payroll processing.
2. Focus on Innovation: XYZ FinTech can allocate more resources to innovation and product development, maintaining its competitive edge and expecting a 15% boost in product development efficiency. With HR functions handled efficiently by the outsourcing provider, the company can channel its internal resources into research and development, ensuring that it stays at the forefront of FinTech innovation.
3. Global Expansion: The company can confidently expand into new markets, knowing that HR compliance is being handled expertly, potentially leading to a 25% increase in global expansion success rate. HR outsourcing ensures that the company can navigate the complexities of international markets and meet local compliance requirements without the burden of managing these processes internally.
4. Cost Savings: Beyond the initial cost savings mentioned earlier, HR outsourcing allows XYZ FinTech to avoid the costs associated with hiring and training an in-house HR team with FinTech expertise. Over the long term, these savings can contribute significantly to the company's bottom line.

Business Case 2: Outsourcing HR for an Accounting Company

Company Background

ABC Accounting is a well-established accounting firm with offices in London, United Kingdom. With a diverse client portfolio ranging from small businesses to multinational corporations, ABC Accounting has a growing need for efficient HR management to support its expanding workforce.

Challenges

1. Client Demands: As the firm takes on more clients, the workload has increased, requiring additional staff and HR support.
2. Regulatory Complexity: The accounting industry is subject to stringent regulatory requirements, making HR compliance crucial.
3. In-House HR Limitations: ABC Accounting's in-house HR team lacks the depth of expertise required to manage complex HR functions effectively.
4. Resource Allocation: Managing HR internally diverts resources from client service and core business activities.

Solution

Outsourcing HR functions to a reputable provider in the Philippines can address the specific needs of ABC Accounting:

1. Cost-Effective Scaling: HR outsourcing is expected to reduce HR-related costs by approximately 25% while efficiently scaling the workforce to meet client demands. This cost reduction includes savings in salaries, benefits, office space, and HR technology costs.

2. Compliance Assurance: The chosen outsourcing provider specializes in HR for the accounting sector, ensuring adherence to industry-specific regulations, reducing compliance-related risks by 30%. This compliance assurance encompasses adherence to financial reporting regulations, tax compliance, and industry-specific requirements.

3. Focus on Client Service: By offloading HR responsibilities, ABC Accounting can redirect its internal resources toward client service, expecting a 20% improvement in client satisfaction. Improved client satisfaction can lead to increased client retention, referrals, and overall business growth.

4. Scalability: As the firm continues to grow, HR outsourcing provides the flexibility to adapt to changing HR needs, increasing scalability by 15%. This scalability ensures that HR can accommodate fluctuations in staffing needs as clients come on board or projects demand additional resources.

Benefits

1. Efficiency: Streamlined HR processes lead to faster recruitment and onboarding of accounting professionals, improving HR process efficiency by 35%. This efficiency improvement translates into reduced time-to-fill job vacancies, shorter onboarding times, and increased accuracy in payroll processing.
2. Enhanced Compliance: ABC Accounting can confidently meet regulatory requirements, reducing the risk of legal issues by 40%. Compliance with tax laws, financial regulations, and industry-specific standards is critical for an accounting firm. HR outsourcing ensures that all employees are properly vetted, payroll taxes are accurately calculated, and relevant training and certifications are up to date.
3. Client Satisfaction: Improved focus on client service enhances the firm's reputation and client relationships, potentially increasing client retention rates by 25%. Client’s value timely and accurate service, and HR outsourcing allows ABC Accounting to prioritize client needs while maintaining efficient HR operations.
4. Cost Savings: Beyond the initial cost savings mentioned earlier, HR outsourcing allows ABC Accounting to avoid the costs associated with hiring and training an in-house HR team with accounting industry expertise. Over the long term, these savings can contribute significantly to the company's bottom line.

By outsourcing HR functions to a specialized provider in the Philippines, ABC Accounting and XYZ FinTech can efficiently manage their growing workforces while achieving significant cost savings, compliance improvement, and enhanced client satisfaction. These strategic decisions to outsource HR are expected to drive operational excellence and support business growth in their respective industries.

Please contact us for more information.