BPO vs Labor Supply Outsourcing: Discover the Differences

These days, most outsourcing companies offer two kinds of outsourcing services to their clients: Business Process Outsourcing (BPO) and Labor Supply Outsourcing. Both services differ in how they manage and operate their clients’ businesses. Here are the details on the differences between BPO and Labor Supply Outsourcing.

What Is Business Process Outsourcing (BPO)? 

A BPO company is a type of service where the outsourcing company is responsible for managing and running the entire business process within a department in the client company. Typically, BPO services include two parts: 

• Front Office Services, including customer support, telemarketing, help desk and technical support. In this service, the outsourcing company will interact directly with customers. 

• Back-Office Services, including human resources (HR), payroll, finance and accounting services, IT services, and data entry. 

To conclude, BPO companies are outsourcing service providers who take over the management and execution of entire business processes within a particular department of their client company. 

What Is Labor Supply Outsourcing? 

Labor Supply Outsourcing is a type of service that focuses on providing labor for recruitment and salary management needs at client companies. In this type of service, the outsourcing company is responsible for recruiting, managing administration, and paying employees. However, it does not take over management of the client company’s business processes or operations. 

Essentially, although employees are employed by an outsourcing company, the management of departments or business processes carried out by these employees remains under the control of the client company. 

Differences and Similarities Between Labor Supply Outsourcing and BPO

Based on the elaboration between both outsourcing services, it can be concluded that the differences lie in their complicity and responsibility towards the client’s business. 

The focus of BPO is taking over the management and thoroughly executing the business process within a department. Meanwhile, Labor Supply centers on offering workforce and managing the company administration without taking over the business management or internal operation from the client company. 

As for the similarity between both services, it is found in the status of the workforce they recruited. So, the workforce that is recruited by the outsourcing company will be working under the outsourcing company itself, not the client company. 

Simply put, BPO will be responsible for the administrative needs of these workers, including payroll calculation, attendance management, and other HR administration tasks. 

Categories of Services Offered by Outsourcing Company 

After knowing the differences and similarity between Labor Supply and BPO, the following are several service categories that can be tailored to client needs: 

• Labor staffing: In this category, outsourcing companies will recruit short-term workers to fill positions on seasonal projects that are not permanent. 
• Specialized staffing: The outsourcing company is responsible for providing workers with the specialized skills that the client company requires for a particular project or position. 

That concludes the explanation of the differences between Labor Supply Outsourcing and BPO companies. Predominantly, both types of services have the same goal: helping client companies meet their human resource needs efficiently, as well as increasing the productivity of internal resources in business development which has a direct impact on company profitability. 

Therefore, consider using Outsourcing Services from RecruitFirst Indonesia. With our experience, we are ready to help manage various administrative and operational tasks in your company. Contact us now for more information about how we can provide solutions that suit your company’s needs.