Tag Archive: Outsourcing Services

  1. Hiring a Payroll Virtual Assistant

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    Are you a startup that outsource your payroll service? Are you planning of hiring a virtual payroll assistant? Using a payroll service company can ease you of compliance woes with global standards around financial, accounting and payroll matters.

    Ernst & Young auditor Stephen Dunn wrote in Forbes Magazine explains the categories of payroll service companies and what they do. All three payroll service categories perform the computation of employees’ withholdings and net pay, compilation of payroll accounting records for employer, and preparation of payroll tax returns for the employer.

    The first category is called the Payroll Service Providers (“PSPs”) and they prepare payroll tax returns using the employer identification number (“EIN”) of the employer. After proper documentation is made, employer then signs and files the tax returns.

    Reporting agents (“RAs”) comprise the second category and they prepare payroll tax returns and use the employer’s EIN. It is an RA who signs in behalf of the employer the payroll tax returns before filing them.

    The third category are the Section 3504 agents or simply professional employer organizations (“PEOs”). A PEO, who appear to take over as employer for designated employees, prepares a payroll tax returns using its EIN, and signs and files the returns.

    To more about the three categories of payroll service companies, you can go straight to an IRS table to check.

    Tips to Smart Payroll Service

    The next step for an employer to do is transfer to a PEO funds to cover their net pay and payroll tax withholdings. Other payroll withholdings, such as 401(k) plan contributions or health or dental insurance coverages must also be transferred to an PEO.

    The PEO holds the responsibility to pay the net pay to the employee, the payroll taxes to the taxing authorities, and the other withholdings to the persons entitled to them. An RA also receives employer funds while a PSP may receive employer payroll funds.

    According to Dunn, the risk is that an outside payroll service firm will receive employer payroll funds but fail to remit them to employees, taxing authorities, or others entitled to them.

    Even if an employer contracts the job with a payroll service outsourcing provider or contractor, they remain liable for filing its payroll tax returns and depositing its payroll taxes with the IRS. A contract signed between a payroll service provider and an employer is a create of state law. Under the U.S. Constitution, Federal law, including Federal tax law, is the supreme law of the land.

    It is the role of the IRS to prosecute payroll service company principals for failing to pay over to the IRS payroll tax funds that they have received from customers. For the employers, however, this is little consolation because they still must pay their payroll taxes a second time, or to all of us who work our entire careers paying into the Social Security trust fund only to have it compromised by such schemes.

    Dunn advises that the IRS wants employers to keep its address as the address of record with the IRS, and not change its adders of record to that of the payroll service company. This way, when issues with an account arise, the IRS can send correspondent to the employer at the address of record and not facilitate an embezzlement of the employer’s employment tax funds.

    Employers are urged to use Electronic Federal Tax Payment System (“EFTPS”), which enables them to confirm that Federal tax deposits are being made on their behalf. While Treasury regulations require employers incurring payroll over $200,000 in Federal payroll taxes in a calendar year to use EFTPS, all employers should still use this electronic system.

    EFTPS provides employers online access to their tax payment history for 16 months. The machine also enables an employer to make tax deposits which its payroll service company does not make on its behalf, such as estimated income tax payments.

    Where to outsource payroll service?

    Dunn explained the advantages of going to large payroll service companies. When a payroll service is big, the expectation is that they’re likely to have existed for quite a very long time and they have the capacity to cover a claim caused by their malfeasance. Their experience using effective systems to serve employers may be mature already.

    A smaller, local or offshore payroll service company can be approached to assist an employer with their payroll needs but Dunn has set out some guidelines before signing a contract. An employer must verify the company has commitment to fight employee dishonesty. When inquiring about the company in question, employer must check or conduct background check with attorneys, accountants, bankers, and other employers.


  2. Non-Voice Business Process Outsourcing: Is this the ‘Hidden Jewel’ for Philippines?


    After earning a spot as the most sought after offshore destination in the voice-based outsourcing sector, the Philippines got another reason to rejoice. The country’s non-voice business process outsourcing (BPO) is seen as another gold mine for growth and opportunities.

    In the past years, the Philippine outsourcing space recorded impressive growth figures. Just last year, the whole industry generated revenues totalling to $13-Billion. According to the Business Processing Association of the Philippines (BPAP), it expects the country’s non-voice outsourcing space to add up to the total outsourcing revenues in the forthcoming years.

    An Everest Group report entitled, “Healthcare BPO Is a ‘Hidden Jewel’ For the Philippines’ Global Services Industry,” indicated the tremendous growth posted by the country’s health BPO.

    The healthcare BPO segment increased fourfold over the past two years. From the US$102-Million revenues generated in 2010, revenues of the healthcare BPO sector jumped to US$430-Million by the end-2012, suggesting this non-voice sector is one of the fastest-growing among the country’s IT-BPO industry.

    The report also indicates that the country now holds a large pool of US-licensed nurses. More than 6,000 nurses are being trained every year, which suggests that this figure makes the Philippines far ahead of the domestic demand.

    Non-voice BPO works wonder for the Philippines, mainly due to its huge talent pool. It also boasts of a high level of cultural compatibility with that of the United States. Plus, the Philippine educational system follows the US standards.

    Other than healthcare outsourcing, the Philippines command quite an impressive feat in the other areas of non-voice outsourcing. Tholons, one of the world-leading advisory firms today, sees the recent foray of outsourcing service providers in the country into non-voice areas like software development and IT outsourcing, animation and game development, and healthcare information management (HIM) outsourcing.

    Tholons expects the country to also penetrate other markets outside the US. Local outsourcing firms are offering their services to Australian small and medium-sized enterprises as well. Tholons identified Cebu as an attractive destination for both voice- and non-voice BPO operations. In its ranking, Cebu got 8th place in Tholons’ top 100 global outsourcing destinations.

  3. Business Process Outsourcing Solutions to Watch by Year 2016

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    Australian companies wishing to control operational costs often resort to an offshore service providers who perform their administrative or non-strategic support functions. The modern business is evolving and business process outsourcing or BPO is quite the latest business practice darling known for giving businesses the strategic support they need to be competitive.

    Trends to watch in BPO

    According to Gartner, a world-leading information technology research and advisory thinktank, up to $9.5-Billion will be spent on business process outsourcing by the year 2016 in the Pacific and Asian regions. Australia was cited as the largest market for BPO in 2011, piling in $4.6-Billion, which technically made this commonwealth nation’s market share even bigger than that of India and China.

    Plunkett, another global market watchdog, issued in a report called Outsourcing and Offshoring Industry Trends and Statistics 2013, that the global outsourcing markets will exceed $480-Billion in the year 2013.

    Cost remains the biggest cited factor for outsourcing but there are also commanding boom in market industries like Information Technology, Banking and Finance, Retail, Travel, and Communications in Australia due to quality factors.

    Factors that Influence the Use of Offshoring BPO

    As a way to approach business, the use of BPO by small and big companies are driven by several key factors. They are:

    • BPO services are often scalable and offer flexible options to businesses
    • Diverse, reputable companies offering wide-scale BPO offerings and service levels
    • Assured quality goods and services due to improved processes and infrastructure
    • Improved productivity over reduced liability and less-pressure of business management
    • Competition and increasing call to expand globally which demands for more workers
    • Talent shortage

    Business Process Outsourcing Service Types to Consider

    What you need right now or in the next couple of years will be dependent on several factors. However, we would like to cite some of the ideal business process outsourcing solutions that you can seek from Australian BPO support providers like Big Outsource. Here are the following that will be highly in demand:

    Bookkeeping and FinancialCertain financial matters can be outsourced to an offshore provider from the preparation of the business payroll to simple to complex tax audits. Outsourcing to a BPO provider this aspect of business can help generate more revenues for your business and give you more edge in dealing with your financial matters.

    Virtual Management – Especially for startups, certain non-strategic business functions can be delegated or sent offshore as you grow your business, especially to meet customer and business demands. Hiring an executive management team member under a business process outsourcing provider contract can remove the pressure off business owners and allow them to focus on the important side of their business.

    Customer Service – As companies see the bigger picture of operating and maintaining their own in-house customer service department – time consuming and costly – outsourcing customer service continue to appeal as a viable option. In fact, it is one of the most popular BPO support side that companies are sending to offshore service providers.

    IT Support – As the search for the best IT professionals who are equipped with up-to-date skillsets and right qualifications become more and more challenging, some companies find success by hiring a virtual worker through a business process outsourcing provider. Programmers, mobile app developers, digital platform development professionals will be highly valuable and in demand and they will push for the growth of offshore BPO in the near future.

    The foreseeable future may be few years from now but the evidence are clear: companies globally searching for quality workforce from business process outsourcing providers will continue to rise. What’s best to do now is to have a regular progressive evaluation of business needs and requirements.

  4. Making Lean Culture Work in Talent Acquisition of Outsourcing Ventures

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    Lean culture is a management principle that’s often applied in the manufacturing sector. Its standout followers include Walmart, Southwest Airlines and GE Healthcare. But can Lean principle ever be applied in the business process of outsourcing, particularly for talent acquisition?

    This is an argument once popped by Zachary Misko and has even written an article at Outsource Magazine entitled “Embracing a Lean Culture in Recruitment.” The basic assumption may be around whether or not applying lean culture in HR recruitment processes will finally help find gems of talents and retain those who contribute to lifting the value of the outsourcing provider and buyer. Of course some theories are better only at staying as theories. Sometimes realities are harsher than initially thought.

    Bringing up the idea of Lean culture in resolving the shortage of high-value talent force could possibly help. Other than what’s already tested and tried by outsourcing companies in standardizing and streamlining their talent recruitment procedures, Lean principles could offer to yield more valuable talents.

    For the uninitiated, Lean manufacturing is one of the quality system principles that many multinational companies use to help identify value-creating activities, eliminate waste, and focus on continuous improvement.  So the next question is how adopting Lean principles will lift recruitment and other back-office functions to better heights of efficiency and quality. But one certain outcome is the insight that this disciplined initiative will provide business partners.

    Another valid question is, “Is Lean culture just fad?” Definitely not when this principle is taken as a lifestyle. With the practice, organizations are enabled to reduce development cycles so that higher quality services and products at a lower cost are produced. And let’s not forget, resources are efficiently utilized using the Lean principle.

    The next question is how to getting started in talent recruitment using Lean. Talent acquisition is a strategic service that can give real competitive advantage to any organization. How? The overall time to approve and fill staff positions will be reduced dramatically without the system adopted. This principle can also help HR to identify non-core, ancillary activities that occupied their time, which in the long run helps in simplifying and expediting the entire process.

    Misko cited the GE Healthcare experience in driving his point. The company sought the support of its external recruitment service provider to implement Lean culture. The result is an overhauled internal processes within GE Healthcare and its external recruitment service providers. With the success of the adoption, the global outsourcing service provider is bringing its Lean expertise to other organizations.

    It is also underscored that practitioners be able to train themselves to remain vigilant in identifying and solving breakdowns in their processes. Complacency is guarded throughout the course of the application of the principle.

    There must also be commitment within the organization to adopt Lean culture. This means executive champions, buy-in from the rank and file must be ensured along with the patience and resources to make this culture work. Finally, when executed well, the effort can significantly improve how you acquire talent.



    Embracing a Lean Culture in Recruitment

  5. Australian SMEs Should Try Outsourcing

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    Outsourcing has received a bad rap in the past years among Australian businesses, including SMEs, due to the fear of the unknown. The good news is that we have seen massive changes in perception in recent years from negative to positive.

    While most of Australia’s large banking and telecommunication firms have jumped ship to follow the trend and have seen the light, the smaller organizations appear to be delaying to follow suit.

    Some reports point to SMEs to be comprising 99% of the Australian business sector, stressing just how extensive the country’s economic stability rests on their continued growth. And some steps must be taken to sustain the SME’s growth.

    SMEs need to learn from their Australian business peers who have already tried outsourcing and have successfully leveraged this offshoring solution the right and effective way. Even from their peers in the UK, Australian SMEs can learn a thing or two about outsourcing or sending job tasks offshore.

    Size zero’ businesses is one of the fast-emerging business trend in the UK. Like a Diet Coke where calories and sugar contents are reduced, only it’s the non-core functions that ‘size zero’ SMEs are shedding. This is undertaken by embracing outsourcing, exchanging services and sharing expertise to focus on their strengths and reduce costs [1].

    It’s also high time for Australian SMEs to start looking outside the countryside, such as Asia and consider the burgeoning BPO sector in the Philippines.  The country can offer plenty of opportunities in terms of high-value talent, logistics, technology and low cost of doing business.

    Business optimism in the Philippines is high, and higher than ever in recent years. An international survey about business optimism ranked the Philippines as the second most optimistic nation in terms of how Filipino businessmen sees the country’s economy for the next 12 months. Peru was ranked the most optimistic country in the world.

    This was the result of a survey by Grant Thornton International Business Report (IBR) for the first quarter, adding up to the already many positive forecasts for the Philippines, including stronger growth for the next couple of years. The report also showed strong signs of willingness to invest by other countries in the country like the U.S. and Japan [2].

    The Philippines has increasingly been noticed as an emerging and preferred outsourcing destination by many international companies to partner with BPO organizations in the country. BPOs is one of the country’s sunshine sectors.

    It is smarter to work when you are able to concentrate on core business processes that are critical to your achievement of business targets and goals. Outsourcing allows SMEs to become leaner and smarter. It is only a matter of time until Australian SMEs will become more open to outsourcing because this strategy does not only help in reducing cost. Outsourcing done right gives access to talented workforce, gives decision makers to focus on what’s important, and even minimize risks in the long-term.



    [1] PH businessmen among world’s most optimistic, survey says

    [2] New breed of ‘size zero’ SMEs emerge

  6. More Investment in Talent is Key to Achieve High Performance in Outsourcing

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    Both the business process outsourcing firms and the buyers can get the full potential of the business strategy if they will increase investment on developing their talent pool. This was the result of a survey made by HfS research study about the emergence of a phenomenon called “talent paradox.”

    The report is 32 pages long, conducted among executives of 282 organizations, and I will try to squeeze in only the gist and the recommendations from HfS geared to provide the lessons learned that will be beneficial to the outsourcing industry in general.

    According to HfS, there is a marked failure from both the outsourcing providers and buyers in realizing the importance of investing in the key drive of value creation – people – which has created a “talent paradox.”

    What’s alarming is the neglect that’s supposed to be a priority “as outsourcing moves from the back office to the middle and front office, where value creation is paramount, and as buyers seek more sustainable business outcomes beyond merely cost reduction,” said HfS in the report sponsored by Accenture entitled “Is Good Enough Really Good Enough? The Great Talent Paradox in Outsourcing.”

    HfS cited many benefits that both outsourcing provider firms and client organizations can derive out of a well-invested talent resources of both the service provider and the buyer, such as improved productivity, efficiency and access to critical data.

    So what needs to be done to remedy the talent paradox? Here are the key recommendations given by the report –

    Invest on programs that will enhance talent’s core business skills. Focus your investment on experts whose skills go beyond merely leaned in operations management, procurement, and service-level skills. Doing so will produce a good number of operations manager in-house and will allow the companies to invest on skills that improve their core business.

    Access high-value strategic talent of service providers. For organizations who are keen in making the most out of the talent from service providers, it is high time the focus of your investment shift from operational capabilities to developing methodologies, analytics, and talent. And we are not only talking here of just anyone from the talent pool. These talent are the ones who are instrumental in creating value beyond lowering the costs. The learned buyers need to consider these capabilities parameter as gauge when evaluating a potential provider.

    Redesign skills expectations for the existing team.  The job competency models used in looking for individuals managing service providers in the past must be revamped to focus on strategic skills available or possessed by candidates.

    Establish shared ‘stretch’ goals. As well as the purpose to encourage skills development and usage, this solution will prevent outsourcing relationships from getting flat cold. Both enterprises and outsourcing providers must establish shared stretch goals together in reviewing goals, metrics, and objectives on a regular basis. If needed, solutions that need to be repositioned must be put in place to meet business goals.


    “Talent Paradox of Outsourcing” Research Finds Lack of Investments in Talent Limiting High Performance in Outsourcing

  7. Bright Future Ahead Philippine Game Development

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    If Filipino video game developers rise to the challenge, the Philippines has the potential to seize the bigger share of the projected US$30 billion the video game development sector in the Asia-Pacific region will likely generate by 2016.

    The country reportedly has earned US$70 million from late 2011 to early 2012 alone based in the latest study conducted by Ovum. Viewing the talent force breakdown, five percent belongs to console game services and another 15 percent specializes on quality assurance (QA), game design consulting and game community support. Around 80 percent focus in mobile and social games development.

    But the country’s Game Development Association has high expectations to the gaming industry of the Philippines. While commending the country’s best two years so far, Alvin Juban, the president of the same group, believes there’s a lot that needs to be done to excel in this sector.

    In an article, Juban said that the country has experienced its best two years of work even there were gaps between projects. He added that “Now, what happens is when you end a project, you receive two, which is a good sign.”

    The Game Development Association of the Philippines said that there are an estimated 3,000 game developers working in the industry who represent around 60 companies.

    While many Filipinos are already outstanding in programming and providing other IT development services, game development is a tough area that requires developers to be excellent and proficient in math and physics.

    Not only good but very good grasp of physics and math concepts will set a high-value game development talent from the rest. Usually these programmers are self-taught and have the drive to study on their own. Currently, there are few schools that offer game design and development courses and De La Salle-College of Saint Benilde is just one.

    But other careers available for game development enthusiasts include Java developers, iOS, Android, C++, PHP and MySQL developers. Actionscript developers are also highly in demand yet very rare to find these days.

    For the more creative-leaning without programming skills, game designing is one career that can be pursued. Neither a programmer nor an artist, but the game designer need to be knowledgeable of video games, game play and writing the game. Game producers and sound engineers are also vital roles needed to produce a video game service.

    The industry has a very low attrition rate, noted Juban, simply because game developers often love playing games, making them stay longer to their jobs. Juban noted that Philippines fiercest rival in the industry is China, next is Singapore, Malaysia and Vietnam.

  8. Demand for Outsourcing Mobile App Development Services Seen Growing

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    Mobile will continue to be relevant this year and the foreseeable future as smartphone and tablet based-device penetration continue to increase. Observers saw the trend to accelerate even higher along with companies who will seize the promise offered by outsourcing mobile app development services to countries like the Philippines.

    The impact of a movement gearing fastforwad to mobile – from shopping to media consuming to search – is getting stronger than ever. The U.S.-based ComScore, which tracks mobile and Web usage, suggests that businesses will have to take advantage of the trend to lead in an industry where consumer behaviors are constantly changing.

    In its 48-page report, comScore talks about the U.S. mobile landscape, highlighting what happened a year ago and what are there to expect in the future state of digital business. It added the current year (2013) “could spell a very rocky economic transition.”

    In a relative development, the world saw an astonishingly quick transition to mobile. Just last year, the smartphone transition crossed the 50 percent mark for the first time, where Android-based phones dominated the segment.

    People who are spending their time more using their desktop computers reached 63 percent while those who use their mobile devices (including smartphones and tablets) reached 37 percent, added ComScore.

    And there’s another big industry that the sweeping impact of mobile domination has the big tech companies of the world shaking their heads – the desktop space. As we all know, the rising smartphone and tablet computer device penetration in the recent years continue to snatch consumers buying and using the versions of applications in desktop products.

    Users can now skip using their desktop computers to access their favorite websites like Google, Yahoo, Microsoft, Facebook and Amazon. All these and more are accessible through the click of their fingertips, using mobile.

    In the mobile landscape particularly, the demand for mobile app and mobile web developers and designers is seen soaring and mobile firms must do everything to stay ahead of the competition.

    As mobile become ubiquitious and become the preferred digital technology of choice by users, it is getting clearer now that the challenge for mobile development firms will increase, particularly towards staying ahead of the competition and meeting the demand.

    Outsourcing for low-cost, competitive labor force is one solution. Yet as the mobile market continues to mature, quality will become the order of things over quantity of apps being developed.

    Over India, the Philippines offers more benefits and business continuity in terms of the outsourcing services and solutions available. Outsourcing a mobile application project or hiring a virtual mobile app developer through Philippine offshoring companies are also said to be more effective over its Asian neighbors due to the availability of infrastructure and the technical training and education being offered to its labor force.