What Is Back Office Outsourcing?

What Is Back Office Outsourcing?

Picture of Daven Michaels

Daven Michaels

New York Times Bestselling Author, 30-year business veteran, and Executive Chairman of CurrentC Group.

For many offices, back-office outsourcing is becoming a popular choice. It is a process whereby some or the entire back-office functions such as managing payroll is outsourced. Other back-office tasks that are commonly outsourced include human resources management, health savings account administration, and data entry tasks. A third party that specializes in a back-office task handles the function on behalf of the company outside of the company’s premises or country. A company or business will ultimately save a substantial amount by choosing to outsource its back-office functions compared to hiring employees in-house for the task.

What You Should Know when Outsourcing a Back Office Task

A good number of outsourcing vendors offer back-office services as their area of outsourcing specialty. If you need to outsource any of the back office functions listed above, you should insist on hiring an outsourcing company that specializes in the particular task you wish to outsource. This way you can be sure of getting the best possible outcome from this type of outsourcing. You may also find providers who specialize in two or three back-office tasks. These providers usually have experts for the different tasks in their team, but ensure you verify things before hiring the vendor. In all, when contracting the services of back-office outsourcing providers, ensure that the task will be carried out in line with your company’s stipulated standard.

You should use the same rigorous and profound steps in hiring back office outsourcing providers just as you would do when hiring employees in-house. This will help you to ultimately land the best possible hands for the tasks. Also, it is best to sign a proper contract for the outsourced tasks. This way, both you and the outsourcing vendor will be legally binding to the stipulations of the contract. A formal contract helps to make both parties committed to their respective responsibilities (in the part of the outsourcing company quality and adherence to timeline is required, and in the part of the company timely payment for the services rendered is required).

Advantages of Back Office Outsourcing

As mentioned earlier, the most obvious benefit that comes with this type of outsourcing and just any other type of outsourcing is financial benefits. Eliminating back-office departments can save tons of money, especially overhead costs. A company can pay less on office space since they will only need a smaller facility for the rest of the business tasks once the back-office tasks are outsourced. Other costs that could be eliminated by choosing to outsource back-office functions may include the cost of printing checks as well as other costs. Also, when you outsource your back-office tasks, you are indirectly sharing the potential risk that comes with the task or tasks in question.

However, some employers are concerned that back-office outsourcing (especially when it is offshore outsourcing) will ultimately make fewer jobs available to citizens. But the truth is, the majority of citizens still get these outsourced tasks via the internet and would work from their homes.

Daven Michaels is a New York Times Best Selling Author and CEO of premiere global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! Inspires entrepreneurs to build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.

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