Five ways to put people to work for you offshore. They are priced differently, they solve different problems, and buyers mix them up every day.
By Andy Schachtel, CEO of Sourcefit | Global Talent and Elevated Outsourcing
The direct answer is that the right model depends on two questions: do you already have the person, or do you need them found and hired; and how much of the management do you want to keep. Answer those two and the model picks itself. Employer of record is for a person you have already chosen in a country where you have no entity. Staff augmentation is for a team you want recruited, employed and equipped for you, that you then manage as your own. Sightline is for a team you want run for you day to day, by a Sourcefit team lead against agreed SLAs, while it still reports to you and works to your KPIs. Fully managed services is for a function you want delivered as an outcome, where the provider owns the process. Output-based, which is what most people mean by BPO, is a process you pay for by the unit of output.
We offer all five, and a large share of the inquiries we receive ask for one when the buyer needs another, usually for an EOR when the real need is a recruited team. This page sets out the differences plainly, with what each model costs at Sourcefit, so you can choose before you talk to anyone. The full side-by-side, including the captive model for companies that need their own entity, is on our delivery model comparison page.
The two-minute test
Start with the person. If you have already found and interviewed the individual you want to hire, and the only obstacle is that you have no legal entity in their country, you need an employer of record. The EOR becomes the legal employer, runs payroll, benefits and compliance, and you direct the work. Nothing else is needed and nothing else should be charged for.
If you do not have the person, you need someone to find them. That is recruitment, and it is the first thing an EOR does not do. At that point you are choosing how much of the management you keep: staff augmentation, where the provider recruits, employs and equips the people and you manage them day to day; Sightline, where the provider also supplies the team lead and the quality layer and commits to SLAs while the team still reports to you; or fully managed services, where the provider owns the process and delivers the outcome.
Then ask who should run the work. If you have a manager with the time and the authority to direct an offshore team, staff augmentation gives you the most control at the lowest cost, and the team is yours. If you want to keep the team and its KPIs as your own but do not have someone to run it day to day, Sightline adds the Sourcefit lead and quality layer and commits to service levels. If you would rather buy an outcome than a team, fully managed services is the honest choice. Both cost more than staff augmentation because the management is included.
Finally, ask whether the work is a function or a transaction. A finance team, a help desk or a planning office is a function: you want people who learn your business and stay. Processing ten thousand invoices or labeling a dataset is a transaction: you can reasonably pay per unit, and that is where output-based or BPO pricing fits.
How the five models compare
| Employer of record (EOR) | Staff augmentation | Sightline (hybrid managed) | Fully managed services | Output-based | |
|---|---|---|---|---|---|
| You come with | A person you have already chosen | A role to fill, or a team to build | A team you want run for you, to your KPIs | A function and the results you want from it | A defined process and a volume |
| Who recruits | You | Sourcefit, you interview and choose | Sourcefit, you interview and choose | Sourcefit | Sourcefit |
| Who employs | The EOR | Sourcefit | Sourcefit | Sourcefit | Sourcefit |
| Who manages day to day | You | You | Sourcefit’s team lead, to your KPIs; the team reports to you | Sourcefit, to the agreed outcome | Sourcefit |
| What you are buying | Legal employment, payroll, benefits, compliance | A dedicated employee, equipped and supported | Your own team, run for you against agreed SLAs | An outcome against agreed SLAs | A unit of output at an agreed quality |
| How it is priced | Flat service fee per employee per month, plus the employee’s actual salary and benefits at cost | Flat management fee per employee per month, plus salary and benefits at cost | Quoted per engagement: the team at staff augmentation rates plus the Sightline management layer, shown separately | Quoted per engagement, with the team’s cost and the management layer shown | Price per unit, with the calculation behind it shown |
| Sourcefit rate | $199 per employee per month; contractor support from $90 | $395 per month work from home, $495 in our offices; from $980 a month all in | Quoted separately | Quoted separately | Quoted per process |
| Deposit | One month’s total fee, refundable | None | None | Per engagement | Per engagement |
| Computers, office, IT support | Not included at any EOR provider | Included | Included | Included | Included |
| Typical buyer | A company with one or a few remote hires abroad | An SMB or mid-market company building a team of one to fifty | A company that wants its own team but nobody free to run it day to day | A company that wants a function delivered, not a team to run | A company with a high-volume, well-defined process |
The line that causes the most confusion is the first one. An EOR’s fee is low because the EOR does nothing to find the person and nothing to equip them; that is true of every EOR provider, not only ours. When a buyer asks us for EOR pricing and then asks whether we can also find the candidates, provide the computers and manage the team, the answer is yes, and the model is staff augmentation. Our guide to what the management fee covers sets out exactly what the $395 pays for that the $199 does not.
Employer of record
You have found the person. We employ them legally in the Philippines, South Africa, the Dominican Republic, Madagascar, Armenia or the United Kingdom, run payroll and statutory benefits, handle local compliance and provide the HR system, and you direct their work. The fee is $199 per employee per month, with the employee’s actual salary and benefits passed through at cost, and a refundable deposit equal to one month’s total fee. Contractor support, for people who should stay contractors, starts at $90 a month. EOR is the right model when the person is already chosen and the work is already managed; it is the wrong model when what you actually need is someone to build the team. Details and country coverage are on the EOR services page.
Staff augmentation
You have a role or a team to fill. We recruit against your brief, you interview and choose, and we employ the people, supply the computer and the network, provide HR, IT and quality support behind them, and replace anyone who leaves at no charge. They report to your manager, work in your systems and follow your processes; the team is yours, and if you later want to move them to your own entity, they go with you with no transfer fee. The fee is $395 per employee per month working from home or $495 in our offices, on top of salary and benefits at cost, with no deposit and no setup, recruitment or exit fees. Every role we staff has a published rate, from $980 a month all in for entry-level customer service; the full card is on the pricing page. This is the model most of our 200-plus clients use, and it is usually what a buyer asking for “an EOR that can also hire” is looking for.
Sightline: your team, run for you
Sightline sits between staff augmentation and fully managed services. You want a dedicated team that is yours, working to your KPIs and reporting to you, but you do not have someone with the time to run it day to day. Under Sightline we supply the team lead and the quality layer as well as the staff, build the team from the lead down, agree service levels for the work (resolution times for a help desk, close dates for a finance team, forecast accuracy for a planning office) and report against them. The team is still yours: it works in your systems, to your standards and your KPIs, not ours. Sightline is quoted per engagement, as the team at staff augmentation rates plus the management layer shown separately, with no deposit. Clients often start with staff augmentation and move to Sightline as a function grows, or the other way round once their own manager is in place; the people stay the same.
Fully managed services
You want a function delivered as an outcome, and you would rather the provider own the process. Under fully managed services Sourcefit designs and runs the operation, including the workforce planning, quality framework, training and reporting, and is accountable for the results against agreed SLAs. SourceCX, our customer experience brand, and SourceCycle, for US healthcare revenue cycle and patient support, are fully managed services, and we run the same model for recruiting, finance and accounting, IT support, supply chain planning and procurement, data annotation for AI teams and back-office operations. Fully managed services are quoted per engagement, and the quote shows the team’s cost and the management layer separately so you can see what the outcome is made of.
BPO and output-based pricing
You have a defined process and a volume, and you would rather pay for what gets done than for who does it. Where the work suits it, we price per unit: per invoice processed, per claim worked, per record labeled, per permit filed. We do not take on fixed-scope projects; output-based work is an ongoing arrangement, with a ramp period priced per seat until volumes settle. The unit price is built on the same transparent framework as everything else we quote: we show the salary, the productivity assumption and the management cost behind it, so you know what you are paying for and the number does not move without a reason. Output-based pricing works for high-volume, well-defined transactions with agreed quality gates; it works badly for judgment work, which is better staffed as a team.
Which model costs less?
For a single person you have already found, EOR costs less, because you are paying only for employment. For a team you need recruited and equipped, staff augmentation costs less than any model that includes management, and far less than hiring locally. Sightline and fully managed services cost more than staff augmentation for the same people, because the lead and the quality layer are included, and both are still a fraction of running the function onshore. Output-based pricing is cheapest when volumes are high and steady and most expensive when they are not. In every case the quote is built from the same visible components, which is the point: the choice between models should be about who does what, not about which provider hides the margin best.
Frequently asked questions
What is the difference between an employer of record and staff augmentation?
An EOR legally employs a person you have already chosen and runs payroll and compliance; it does not recruit, equip or manage them. Staff augmentation recruits and employs people for you, provides the computer and support, and you manage them as your own team. Sourcefit’s EOR fee is $199 per employee per month and the staff augmentation fee is $395 ($495 office-based), each on top of salary and benefits at cost.
I asked for an EOR but I need the provider to find the candidates. Which model is that?
Staff augmentation. Recruitment is the first thing an EOR does not do. With staff augmentation Sourcefit recruits against your brief, you interview and choose, and the person is employed, equipped and supported by us while reporting to you.
What is the difference between staff augmentation, Sightline and fully managed services?
Who manages the work and who owns the process. In staff augmentation your manager directs the team day to day. Under Sightline, Sourcefit supplies the team lead and quality layer and commits to SLAs, while the team still reports to you and works to your KPIs. In fully managed services Sourcefit owns the process and delivers the outcome. Sightline and fully managed services are quoted per engagement with the team cost and management layer shown separately.
What is Sightline?
Sourcefit’s hybrid managed model: a dedicated team that is yours, built from the team lead down, run day to day by a Sourcefit lead and quality layer against agreed service levels, reporting to you and working to your KPIs. It is priced as the team at staff augmentation rates plus the management layer, shown separately.
Is BPO the same as staff augmentation?
Not as most people use the word. BPO usually means a provider delivers a process and charges per unit of output or a bundled fee. Staff augmentation gives you named, dedicated employees you manage. Sourcefit offers both, and output-based prices are built on the same visible cost framework.
Can we switch between models later?
Yes. Clients move from EOR to staff augmentation when they need more hires, from staff augmentation to Sightline when nobody on their side has time to run the team, to fully managed services when they want an outcome rather than a team, and back again when their own manager is in place. The people stay the same; the fee and the management layer change.
Which countries does each model cover?
Staff augmentation, Sightline and fully managed services run from the Philippines, South Africa, the Dominican Republic and Madagascar. EOR covers those four plus Armenia and the United Kingdom.
To learn more about which model fits your situation, visit sourcefit.com or contact our team for a consultation.
