Financial Benefits

Direct salaries

Reduction of 50-70%

Cost of communication

Home office employees will need to spend more time communicating needs and wants regarding software requirements. Time spent to sort out design problems, bugs, and other issues will increase as well.

Time spent designing

This increases when design is still fully handled by the home office. More time will be needed to ensure that the detail level of designs is accomplished fully. If, on the other hand, that offshore manpower is hired to do functional specifications and the client will only take care of the Specification of Requirements, then the overall cost of design may actually decrease.

Costs for recruitment

These will dramatically improve. A rule of thumb is that the cost of hiring a new employee is equal to 4 months of his or her salary. Since WorldPartner takes care of this free of charge, substantial savings can be expected.

Costs of latency

By definition, things are handled more quickly when people are sitting together. When you have a team sitting on the other side of the world, there will be delays in solving day to day issues and challenges. WorldPartner has invested heavily in infrastructure in order to ensure that the costs of latency are minimal. This includes IP-telephony, chat and VoIP clients on each machine, Internet conference facilities, and high bandwidth fiber optics connection. Filipino employees are also required to observe work hours that correspond to that of the home office.

Costs of restructuring and change management

When starting on outsourcing, there will be costs associated with changing the way the home office works; e.g. reallocating responsibilities, setting up new procedures and reorganizing manpower. One necessary requirement for a company in order to reduce the cost of latency and communication is often to become even more structured and organized with day-to-day procedures. This may meet internal resistance, but from our experience, it may also bring about a number of positive changes.

Overhead HR costs

It is one thing to compare direct salaries; it is another thing altogether to declare major savings in terms of overhead HR costs. Some of these costs which are often forgotten consist of the following:

• Overhead time allocated for administrative functions like accounting, HR, legal support, system administration, staff management, reception and secretarial support is reduced.
• Facility costs are reduced in terms of furniture, hardware, some software, office space, and so on.
• Home office will not have direct employee costs like paid phone, paid Internet, paid lunch, pension, and similar running costs.
• Filipino employees are entitled to a max of 10 paid vacation and sick leaves each per year. Any vacation or sickness in excess of these will be deducted from the client’s bill.
• Filipino employees have relatively fewer benefits when it comes to bereavement, maternity, child sick days, and so on.

Exit costs

When the business environment of the company changes, it is much easier to reduce offshore staff with a WorldPartner ODC agreement.

Training costs

With an ODC agreement, WorldPartner takes charge of much of the ongoing training and HR development.