Types of BPO

In the ever-expanding global market, BPO is becoming increasingly popular due to the flexibility and outstanding services it offers. Since BPO is an alternative to hiring in-house workers and has proved an efficient way of working for many companies from various industries, different types of BPO have emerged. 

If you are a marketer, recruiter, or company owner who wants to expand or increase the growth of your business, you must take a look at the BPO types below. The advantages can truly make a positive shift in your business, so let’s get started!

BPO Types by Location

The need for outsourcing services is constantly expanding, and because of it, different types of outsourcing in BPO have emerged. 

At CLICKVISION BPO, we know five types of BPO based on location; however, we’ll focus only on onshore, offshore, and nearshore outsourcing as the most common. We’ll take a look at the advantages of hiring an outsourcing company within or outside the country’s borders and tackle the potential downsides of the three outsourcing types. 

Onshore Outsourcing

Onshore outsourcing, also referred to as domestic BPO, is a model that includes outsourcing a given business function to a vendor or employer in the same country where your company operates. The best example of onshore outsourcing is hiring agencies, companies, or other service providers to outsource services for your company as a third party, but the outsourcing is done within the same borders as your company. The perfect example of onshore outsourcing is if your company operates in Georgia, but the outsourcing services are located in Florida.

The reason companies hire third-party companies to work within the same borders is because it promotes faster communication, meaning there’s no waiting time for the completion of tasks. While there’s greater control over the business process and fewer cultural differences, the labor costs are higher than the other two BPO types.

Offshore Outsourcing

Offshore outsourcing types of BPO refer to performing services outside the country and far from the company’s headquarters. Businesses, in such a case, hire services from low-wage economic countries to save on overall costs. However, it shouldn’t go unnoticed that by choosing offshore outsourcing, you get to choose from the pool of talents, and qualified workers.

Additionally, offshore types of BPO services allow companies to delegate tasks more efficiently. While their on-site team can focus on performing core business operations, the outsourcing providers can complete tasks like quality assurance, testing, or customer support. This method improves the overall workflow in the company.

Ultimately, the leading advantage of offshore outsourcing is flexibility. When you get short-staffed or need someone to work for the weekends or holidays, you can always find an offshore provider that can substitute the employees and get the job done.

Customer Service Outsourcing

Nearshore outsourcing types of BPO refer to outsourcing providers in the neighboring country. Although it’s similar to the domestic one, nearshore outsourcing also offers tons of benefits worth mentioning.

Apart from lower costs for this job position, one of the greatest advantages is the same time zone. That way, you will eliminate communication issues as your outsourced provider will be reachable during working hours.

You can even assign more responsible tasks to the outsourced provider because you will be in touch with them during working hours. They can complete the tasks, and you get to follow their performance.

BPO Types Based on Services

BPOs may have started offering services by location, but later, the classification expanded. Some BPO types have formal education behind and experience on a specific topic, which makes them experts in the specialized field. For better understanding, we started specifying the services they offer. 

Now, types of BPO companies  based on services are subdivided into three categories:

• Knowledge Process Outsourcing (KPO) – KPO types of outsourcing offer knowledge-based or specialized expertise in a specific field that requires high-level attention. As opposed to BPO, KPO deals with core business activities, including data analysis, financial analysis, research, and development. Companies in the IT sector, communications, and engineering who don’t have the necessary means and time to train and hire full-time staff can benefit from these third parties.
• Recruitment Process Outsourcing (RPO) – RPO services revolve around recruitment and hiring duties. The RPO service providers help with all aspects of the hiring process to simplify the job of the in-house team. But predominantly, they are responsible for sourcing candidates, conducting interviews, and background checks. Usually, they are most effective when companies need to hire more employees simultaneously and have a high volume of filtering and difficulty with the candidate selection.
• Legal Process Outsourcing (LPO) – LPO offers a company legal services such as contract management, document review, and much more. These service providers are legal professionals and trained lawyers, which means they can help you out with more tasks outside the general scope of work.

Customer Service Outsourcing

Customer support is one of the most common outsourcing services on the market. Businesses that deal with customers on the phone, need reliable workers to handle the issues or dilemmas the customers may have.

The leading advantage of outsourcing customer service specialists instead of hiring someone on-site is that it spares you from providing them with the necessary training and equipment for uninterrupted work.

Payment Processing Outsourcing

Payment processing duty requires strong attention to detail, and alert monitoring. Therefore, it’s a full-time job. However, hiring a person for this job position within the company is not the most productive because it takes too much time, training, and resources.

But, the outsourcing market offers a wider pool of experienced and trained professionals who know how the operations work in payment processing, what are the common challenges and how to overcome them. 

Payment processing outsourcing is more cost-effective and definitely more efficient compared to on-site. Companies can reorganize their tasks, focus on the more important issues while covering the necessary with third-party professionals, and significantly optimize their workflows. 

Human Resources Outsourcing

An in-house HR team is essential for big companies due to the higher number of employees. Their job is to manage a high volume of employees, maintain a positive culture in the office, arrange events, and much more. On an efficiency note, these teams need relief in their job duties to focus on the more demanding tasks in the office. Therefore, by outsourcing HR experts, you will increase job performance as the team can separate the job responsibilities.

On the other hand, smaller or mid-sized companies often don’t have the necessary means to hire a professional in the field. But, given that the HR outsourcing workforce is less costly on the market, they have access to a professional who will fulfill their duties promptly and help the company grow.

Accounts Payable Outsourcing

Accounts payable as outsourcing is in high demand on the market. Out of all outsourcing jobs, this is one of the most profitable options for accountants. There is always a job on the radar, and depending on their skills and experience, accountants can increase their rate and make great money overall.

Nonetheless, companies hiring this outsourcing service also have many advantages. Firstly, they accelerate the process of filtering and completing the invoices, credits, and product orders, and they simplify the job of the in-house accountants. Secondly, it’s much more cost-effective and efficient instead of assigning this workload to a single person in the company.

Source: freepik.com / Photo Contributor: jannoon028

Conclusion

To sum up, there are two main types of BPOs, BPO types by location and BPO types based on services.

The BPOs by location can be onshore or within the same state or city, near shore or in the neighboring country, and offshore, which is self-explanatory. Based on the needs and future plans, companies can hire the appropriate type of BPO that matches their expectations.

On the other hand, there are the BPOs specialized services that offer knowledge-based, legal-process, or recruitment-process types of outsourcing. 

These specialized types of BPO services have unique characteristics and purposes, making them useful in different contexts. By outsourcing these specialized functions to third-party service providers, companies can save time and money while still receiving high-quality services.