Cutting Operational Costs Without Cutting Corners: A Staffing Guide for Tech Businesses

Let’s face it…

Running a technology business costs money.

Software. Infrastructure. Talent. Before you know it your operating costs are draining your resources.

Fortunately, there is a solution that can slash your operating costs while maintaining exceptional quality.

That solution is back office outsourcing.

Used strategically, back office outsourcing can dramatically lower your costs while freeing up time and resources to do what your company does best.

Here’s what we’ll cover:

• Why Back Office Functions Drain Resources
• Calculating Your Real Cost Savings
• Creating a Remote Staffing Roadmap
• 5 Common Outsourcing Mistakes to Avoid

Why Back Office Functions Drain Resources

When was the last time you thought about your accounting team?

If you are like most tech company leaders, human resources, bookkeeping, data entry, and administrative help are probably the farthest from your mind. And why should they be? The backend functions of your business aren’t exactly revenue drivers.

With that said…

Your back office operations are quietly consuming 30-40% of your budget.

All that accounting work needs to be done. But in addition to costing you money, those payroll reports take hours of your time every week. Even if you outsource bookkeeping, your money is still going towards someone else’s payroll.

The same is true for HR, data entry, and administrative tasks.

Instead of spending time and money maintaining these essential but non-revenue generating functions, why not outsource them to a reliable third-party?

Companies utilizing offshore teams in the Philippines have discovered a goldmine of talented and affordable labor. Back office and administrative outsourcing has produced a $38 billion industry in 2024 alone.

Read that sentence again.

Thanks to a robust BPO market, The Philippines employs over 1.82 million people who specialize in back office functions for companies just like yours.

Ready to see how those savings break down?

Calculating Your Real Cost Savings

It’s time to do some math.

According to recent research from ISG, business process outsourcing provides companies an average savings of 15% over in-house production.

That might not sound like much, but for tech companies where margins are tight, that extra spending power adds up.

Wait, there’s more…

There is an opportunity to save even more if you know where to look.

When you outsource back office functions, you are not just eliminating salaries. There are several hidden costs that come with maintaining in-house staff:

• Recruitment fees
• Training
• Benefits
• Office Space
• Equipment
• Software Licenses

Each expense listed above is going away when you move that function to a outsourced provider. A tech startup that outsources HR, bookkeeping, and data management functions can easily see a total cost reduction of 25-40% for those operations.

Creating a Remote Staffing Roadmap

Ready to dive in but not sure where to start?

Fear not.

Here is a quick step-by-step guide to help you begin staffing up with remote talent.

Pick the right functions.

Just because you can outsource something doesn’t necessarily mean you should. Pick roles that require rote, repeatable effort with little institutional knowledge. Payroll processing, account payable, data entry, and customer support are great places to start.

What about things you should keep in-house?

Anything that drives your product forward. Core engineering, development, and executive functions should stay under your roof.

Pick the right provider.

This will be different for every company. Security is job #1. Make sure whatever company you are outsourcing to has the proper certifications in place. For technology companies, that means verifying SOC 2 and ISO 27001 compliance.

Don’t just take their word for it. Ask for references and talk to their clients.

Agree on expectations.

Define KPI’s upfront. How will you measure success? How will you measure quality? How quickly do they need to turnaround tasks?

Document, document, document. Give your outsourcing provider a step-by-step playbook for each task you want performed. This will help minimize errors and keep everyone on the same page.

Create communication workflows.

Want a bonus spreadsheet? Work off the other side of the world’s time zone.

Some tech companies get trapped thinking their offshore team needs to be available during regular business hours. Not only is this impossible, it massively limits your potential staff pool.

By handing off projects at the end of the day, your teams in the Philippines can work while the US sleeps, and flip projects back to you by morning. Boom. 24 hours of productivity for the price of a regular 8-hour shift.

Avoid These Common Outsourcing Mistakes

Implementing a new remote staffing strategy is challenging. Before you get started, learn from others who have failed.

Here are five don’t do this mistakes…

Don’t try to do everything at once.

Urging to go all in? Hold your horses. Pick one or two functions and get them dialed in before expanding to other areas of your business. You’ll learn a lot early on that can help you improve your process as you scale.

Don’t overlook culture.

Skills are important. But not every company will be the right culture fit for you and your business. Make sure the companies you are interviewing understand how your business works and what you expect.

This is especially important when outsourcing customer facing roles. You don’t want to hand off support to someone who is going to misspeak on your brand voice.

Don’t skimp on onboarding.

Pay extra attention to how you onboard your outsourcing team. Remember, they aren’t just blindly completing tasks. They should understand the “why” behind the processes you put in place.

Record video walkthroughs of complex processes. Share internal documentation on your company culture. The more context you can provide, the better.

Don’t neglect security.

Tech companies deal with sensitive data. Don’t cut corners by choosing the cheapest provider out there. Make sure they have established security protocols and practices. Do your due diligence. Perform regular security audits. Put a data handling agreement in place, and stick to it.

Don’t forget about your internal team.

Your current staff will have questions about why things are changing. Don’t ignore them. Make sure everyone is onboard with your new direction and understands how outsourcing can benefit the company as a whole.

Wrapping Things Up

If you do only thing today…

Remember this…

Businesses who leverage outsourcing gain a huge competitive advantage.

They spend less money on overhead. They have more time to focus on core functions. And best of all, they can invest that extra capital back into things that grow their business.

The future is here, and it doesn’t look like your dad’s office.

Tech companies who cling to the “we do everything ourselves” mentality are already getting left behind. Faster innovating companies with streamlined teams are eating their lunch.

Don’t be that company.

Outsource routine work. Staff up with talented individuals from around the world. And finally start growing your business.