Outsourcing is not a new concept in the Philippines. Generally, outsourcing refers to an arrangement or relationship between two different parties where one provides outsourced services to another.

In outsourcing, the main difference will be on which side are you currently belonging—are you outsourcing your business processes to another party or are you outsourcing them for another company? Both of these will have their advantages and disadvantages that would suit your business goals.

If you are outsourcing your business processes for another company, this means that you can focus on your core competencies by outsourcing non-core activities. The other benefit would be the cost savings because outsourcing has usually lower costs than insourcing (hiring employees). However, if something goes wrong with the outsourcing agreement, it will be your headache because outsourcing gives you less control over the outsourcing company. For example, outsourcing is the practice of sending some or all of the business processes outside a company to another service provider.

For instance, instead of hiring more employees in-house who will take care of your payroll outsourcing activities, outsourcing allows you to get it done by using their services at a lower cost. Thus, this arrangement provides organizations with flexibility and scalability. If an increasing number of employees are needed for payroll outsourcing, additional resources can simply be engaged from the outsourcing vendor(s) without having to incur costs for onsite human resource management executives' salaries nor benefits packages—all these while getting access to highly skilled personnel.

In this article, we’re going to talk about why businesses outsource their payroll services in the Philippines.

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