Between growing the customer base, keeping up with rapidly changing health policies, and the increased demand on offering remote work options, every organization has a lot on its plate these days. One strategy to handle the constantly evolving issues, especially for businesses working with an online presence, is to consider outsourcing your operations and other logistical needs.

But to do so can be tricky if you don’t understand how, and when done incorrectly, it may lead to possible exposure for your organization. And when you’re in the process of hiring and outsourcing to contract workers, knowing all the tax liabilities and other payroll demands, especially for an international workforce, can be a challenge.

For that reason alone, any organization that hires outside help should consider utilizing a payroll outsource to handle all the ins and outs of the various tax codes, VAT’s, and other tax compliance needs. Even when your workforce is mostly regionalized, you should explore international global payroll options so that if and when you need to hire additional help from a foreign country, you’re prepared for the needs that must be met.

But before any payroll outsourcing is used, you need to understand what outsourcing is and how to do it effectively.

Outsourcing Categories

In general, there are three categories of business outsourcing that you need to understand.

1. Onshore

The first one is known as onshore outsourcing, which is a fancy way of hiring outside your organization but within your regionality or country.

2. Nearshore

The second form of outsourcing is known as nearshore outsourcing. With nearshore outsourcing, you’re hiring on talent from neighboring countries. This form of outsourcing is quite convenient as most neighboring countries have procedures for nationals to work cross-border.

Take the United States and Canada, for example. While the laws and tax codes are dissimilar, the governments of these two neighbors understand the interrelated cohesion of their industries and have a streamlined process for organizations that choose to near-source.

3. Offshore

The final form of outsourcing is known as offshore outsourcing. In offshore outsourcing, your organization is, in effect, hiring someone, not in close proximity to your business location.

For example, if you are headquartered in Denmark and hired out to South Korea, this is an example of offshore outsourcing.

The tricky part here is that the further the distance from your native boundaries, laws, and customs, the more you need to understand employers’ obligations in those various territories. For most businesses, especially small online businesses, keeping up with all the different laws can be challenging, which is why hiring specialists for offshore outsourcing is a great idea.

When done correctly, outsourcing your processes, sales, and fulfillment options can be a boon for an organization’s bottom line, but if done incorrectly, it can set up the organization for costly fines, fees, and other potential exposure.

Benefits To Outsourcing

1. Find Top-Talent at Subprime Costs

One of the hidden benefits of hiring outside your area is that you can find top-tier talent in a given field from other parts of the world, and often cheaper than if you hired local talent. The reason for this is simple and may be related to standards of living, demands on benefits that regionally don’t apply elsewhere, as well as tax liabilities for employers that may be onerous in a specific area.

2. Expand The Work Day

A hidden advantage to hiring outside your region through outsourcing is that depending on where you hire, you may be able to double or triple productivity without impacting your expense line. This strategy is incredibly beneficial for remote, online work and businesses, as you can hire people outside your time zone to work while your competitors may not be in operation. Pair this advantage with a lower labor cost, and you’re positioning your organization for success.

3. Save Costs On Lease And Operational Costs

By having outsourced employees and contractors, you’ll save a ton on traditional leases and hard expenses.

4. Free Up Time And Energy For Other Projects Within Your Organization

By outsourcing nuanced operations, you can free up time and energy within your organization to work on tasks that are more natural in your wheelhouse.

As businesses navigate the combination of rapidly changing social and health situations around the globe, outsourcing becomes even more of a priority to gain the upper hand over your competitors. And in doing so, you can help ensure you maximize your profits while also minimizing your payroll overhead.