Outsourcing means having a business process done by an external provider. When the provider is in another country, it is offshoring; when that country is close to yours and shares your time zone, it is nearshoring. The term covers a wide range of arrangements, from legally employing one person abroad to handing over an entire function with service levels, and most of the confusion buyers run into comes from treating those as one thing. They are priced differently and solve different problems.
The six ways to outsource
Employer of record
You have already chosen the person; the provider legally employs them in a country where you have no entity, runs payroll, benefits and compliance, and you direct the work. Sourcefit’s EOR service is $199 per employee per month plus the employee’s salary and benefits at cost. EOR services
Staff augmentation
The provider recruits people to your brief, employs and equips them, and supports them with HR, IT and quality, while they report to your manager and work in your systems. Sourcefit’s management fee is $395 per employee per month working from home or $495 in our offices, plus salary and benefits at cost, with published rates for every role from $980 a month all in. This is the model most of our clients use. Staff augmentation
Sightline
Your own team, run for you: the provider supplies the team lead and the quality layer as well as the staff, builds the team from the lead down and commits to service levels, while the team still reports to you and works to your KPIs. Sourcefit’s Sightline model is quoted per engagement as the team at staff augmentation rates plus the management layer, shown separately.
Fully managed services
The provider owns the process and delivers the function as an outcome against agreed SLAs, with its own workforce planning, quality framework and reporting. SourceCX and SourceCycle are fully managed services; Sourcefit runs the same model for recruiting, finance, IT support, supply chain, data annotation and back-office operations. Quoted per engagement with the team cost and management layer shown separately.
Output-based outsourcing
You pay per unit of work rather than per person, with the calculation behind the unit price shown. Output-based outsourcing
Captive
You own the offshore entity; the provider builds the team under staff augmentation, runs the operation with you and transfers the people and processes when you are ready. Captive services
The delivery model comparison sets all six side by side with a two-minute test for choosing.
Why companies outsource
The first reason is cost: a dedicated professional in the Philippines, South Africa, the Dominican Republic or Madagascar costs a fraction of the fully loaded cost of the same role in the US, Australia or the UK, and with a published rate the saving is known before anyone is hired. The second is focus: functions that are necessary but not what the company is for (the close, the help desk, order processing, claims follow-up) get done well by people whose whole job they are, while the company’s own staff work on what makes it different. The third is flexibility: a team can start with one person and grow or change shape without the fixed cost of local hiring, and the fourth is access to skills that are scarce or expensive at home, from bilingual support to CAD, estimating and software engineering. Outsourcing also lets a company cover hours its own office does not, which is how most 24/7 operations are built.
Is outsourcing right for you?
Five questions settle most cases. Is there work in your business that is defined well enough to explain to a new hire? If you could write the job description, it can be outsourced. Is someone on your side able to direct the work day to day? If yes, staff augmentation. If not but you still want the team and its KPIs as your own, Sightline. If you want the function delivered as an outcome, fully managed services. Does the work need a local license, a physical presence or authority to commit your money? Those parts stay with you; the rest can move. Can you measure the output? If you can, you will know within a quarter whether it is working. And is the cost difference large enough to matter? For most roles it is several times, which is why the question is usually how rather than whether.
The risks are real and manageable: a provider that hides what it pays its people, a team with no one on your side to direct it, data handled outside your systems, and work started without documentation. Each of those has a plain answer (a published rate, a named manager, named logins in your own systems, and a written brief), and our steps for getting started walk through them.
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Frequently asked questions
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What is the difference between outsourcing, offshoring and nearshoring?
Outsourcing is having work done by an external provider. Offshoring is outsourcing to another country. Nearshoring is offshoring to a nearby country in a similar time zone, such as the Dominican Republic for US companies.
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What is BPO?
Business process outsourcing: having an entire process, such as customer service or claims processing, delivered by a provider, usually against service levels or a price per unit. It is one of six outsourcing models; the others are employer of record, staff augmentation, Sightline, fully managed services and captive.
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How much does outsourcing cost?
It depends on the model and the role. At Sourcefit, employer of record is $199 per employee per month plus salary; staff augmentation is from $980 a month all in for an entry-level role, with every rate published; Sightline, fully managed services and output-based work are quoted with the components shown.
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What can be outsourced?
Any work that can be explained to a new hire and done in your systems from another location: customer service, finance and accounting, IT support, software development, design, data operations, recruiting, back-office administration, supply chain planning, engineering support and more. What stays with you is work that needs a local license, physical presence or authority to commit your money.
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How do I know if outsourcing is right for my business?
If the work can be described, someone can direct it or you want it run or delivered for you, the output can be measured and the cost difference is material, it usually is. Start with one role and a written brief.