BPO, dedicated staff or employer of record: which offshore model fits your work?

Pick a BPO when you want to buy a result: a process run for you, measured against agreed targets, by a team the provider manages. Pick dedicated staff or an employer of record when you want a person: someone who works only for you, in your systems, under your direction. Dedicated staffing and an employer of record differ mainly in who finds the person and how much support comes with them. This guide explains the three models, how each one charges, who controls quality, how to keep knowledge in your business, and what to ask any provider before you sign.

What is the difference between a BPO, dedicated staff and an employer of record?

• A BPO (business process outsourcing company) takes on a process, such as customer calls, claims processing or data entry. It hires, trains, supervises and rosters the people, often in its own offices and systems, and is accountable for the service levels you agree. The people may work across several clients, and you usually deal with an account manager rather than with them.
• Dedicated staff (also sold as offshore staffing or staff leasing) means the provider recruits someone who works full-time and only for you. The provider is their employer and usually supplies equipment and HR support. You direct their work day to day, as you would anyone on your team.
• An employer of record becomes the legal employer of a person you have usually found yourself. It holds the employment contract and runs payroll, contributions and statutory benefits. Everything else, from recruitment to daily management, is yours.

The labels are used loosely, and many providers mix them, so judge each one by the answers to the questions further down rather than by what it calls itself.

	BPO	Dedicated staff	Employer of record
What you buy	A managed process with agreed outcomes	A full-time person, recruited and employed for you	Legal employment of a person you chose
Who directs the work	The provider's supervisors, to your requirements	You	You
Who you talk to	An account manager	Your person directly, with the provider for HR	Your person directly
Whose systems	Often the provider's	Usually yours	Yours
Works only for you?	Not always	Yes	Yes
Who recruits	The provider, and you rarely choose individuals	The provider, and you choose	Usually you
Scales with volume?	Yes, up and down	One person at a time	One person at a time

How does each model charge?

Prices vary too much between providers, roles and contracts for a single figure to be useful, so here is how the structures work and what to check in each.

Pricing structure	Common with	What to check
Per seat: a monthly price for a position staffed during agreed hours	BPOs	Whether the seat is one named person or a rotating one; whether supervisors, quality checking, facilities and holiday or night premiums are included
Per hour: billable hours worked	BPOs, some staffing providers	Minimum hours, how training and idle time are billed, and how overtime and holiday rates are passed on
Per transaction or outcome: per call, ticket, claim or record	BPOs	Minimum volumes, tier thresholds, who pays to fix errors, and how a "transaction" is defined
Monthly per person: either one all-in price, or the person's employment costs passed through plus a fee	Dedicated staff, employers of record	What the person is actually paid, which statutory costs are inside the price, and when and why the price can change

On top of the running price, ask about one-off and exit costs: set-up or recruitment fees, deposits, equipment, minimum terms, and any fee to hire the person directly later.

Per-transaction pricing rewards the provider for volume, so it suits work you can count and quality you can measure. Per-person pricing is predictable, but you carry the cost whether the week is busy or quiet. For a role in the Philippines, a monthly per-person price has to cover more than salary: 13th-month pay, the employer's SSS, PhilHealth and Pag-IBIG contributions, holiday and night premiums, and leave. Our guide to what it costs to employ someone in the Philippines lists them, and the checklist for comparing offshore hiring quotes shows how to put two quotes side by side.

Who controls quality in each model?

With a BPO, the provider does. Its team leaders and quality staff check the work against the service levels in your contract. Your control is the contract itself, so it is only as good as what you write into it: measurable targets, how they are sampled and reported, your right to review recordings or work samples, and what happens when targets are missed.

With dedicated staff, you do. You set priorities, give feedback and decide what good looks like. The provider controls who reaches your shortlist and handles the employment side: payroll, leave, equipment, and the formal process if performance has to be addressed. Most quality problems in this model come from thin onboarding and unclear expectations, not from the person. Our guide to the first 90 days covers how to avoid that.

With an employer of record, you do, entirely. The employer of record makes sure the person is employed lawfully. It does not supervise the work. It does run the legal side of discipline or dismissal, which in the Philippines needs a valid cause and due process under the Labor Code, so you cannot simply end someone's employment by email.

How does knowledge stay in your business?

This is the question most people forget to ask until someone leaves.

• With a BPO, knowledge of your process builds up inside the provider: in its procedures, its trainers and its team. Make the process documentation a deliverable you own, kept in your systems, and write in what the provider must hand over, and help with, if the contract ends. If you might bring the work in-house later, check whether the contract stops you hiring the people who know it.
• With dedicated staff or an employer of record, the person works in your systems, so the work itself stays with you. The risk is that the know-how lives in one head. Ask them to keep a running procedures document in your own workspace, record short screen videos of recurring tasks, and make sure a second person can cover the essentials.
• In every model, keep accounts, files and logins in your business's name, and know how access is removed on someone's last day. Our guide to data security with offshore staff covers devices and access.

Which model fits your work?

If your work is…	Usually the best fit
High volume, standard and measurable, such as inbound support queues or claims processing	BPO
Volume that swings with seasons or campaigns	BPO
Round-the-clock or multi-shift cover	BPO
Needed, but you have nobody to lead it day to day	BPO
A steady, full-time role that depends on knowing your clients, products and ways of working	Dedicated staff
A full-time role where you want help finding the right person	Dedicated staff
A specific person you have already found, or already work with as a contractor	Employer of record
A large team in the Philippines that you want to run yourself long term	Your own Philippine company may eventually make sense

The models can sit side by side. A common split is a BPO for high-volume or after-hours work, and dedicated staff for roles that need deep knowledge of the business, such as finance or operations. If you have been paying someone as a contractor, read contractor or employee? Hiring in the Philippines legally before you choose.

What should you ask any provider before signing?

Copy these into your next call. Ask for the answers in writing, ideally in the contract.

1. Who is the legal employer of the people doing my work? Name the company and the country it is registered in.
2. Is there a real Philippine company behind that? Ask for its registration with the Securities and Exchange Commission and its employer registrations with SSS, PhilHealth and Pag-IBIG.
3. What exactly does the price include? Salary, 13th-month pay, government contributions, holiday and night premiums, leave, health cover, equipment, internet, recruitment, supervision. What is billed as extra?
4. What does the person actually get paid? For dedicated staff and employers of record, you should know the salary and benefits your person receives, not only your price.
5. When and why can the price change? Salary reviews, government rate changes, exchange rates, annual increases.
6. What is the minimum term and the notice period? Can you end one role without ending the whole agreement, and what does leaving cost?
7. What happens if someone resigns or isn't working out? Who recruits the replacement, how long it typically takes, and whether you pay again.
8. Does the person work only for me? In what hours, and from where: an office, or home?
9. Whose device is it, and how is it managed? Who installs and updates software, and what happens to the device and its data when someone leaves?
10. How is my data handled? Where it is stored, who can see it, and whether the provider will sign your data processing terms. Philippine providers are bound by the Data Privacy Act of 2012, so ask how they comply.
11. Who owns the work product? Check that the employment contracts assign intellectual property to the employer, and that your contract with the provider passes it on to you.
12. Can I hire the person directly later, and on what terms? Look for buyout fees and clauses that stop you hiring the provider's staff.

What are the red flags?

• Nobody can name the legal employer, or the contract quietly makes you the employer.
• "Employment" that is really a contractor arrangement: you are asked to pay the person directly, or they invoice as a freelancer while the provider calls it employment.
• A price that cannot be broken down. An all-in price is fine; a provider who cannot tell you what is inside it is not.
• No mention of 13th-month pay or contributions in a full-time quote. Either they are hidden somewhere or they are not being paid.
• Long lock-ins with large exit or buyout fees, especially before you have met the person.
• Vague answers about data, devices or ownership of work, or no written terms on them.
• A dedicated person who turns out to be shared with other clients, or a named person who is quietly swapped.
• Pressure to sign quickly, before you have the answers above in writing.

Where to start

Sort your work into two piles: standard, measurable work that varies in volume, and ongoing work that depends on knowing your business. The first pile suits a BPO. The second suits a dedicated person, through a staffing provider or an employer of record. Then put the twelve questions to every provider on your list.

Ramp Remote works in the second pile. We are a New Zealand business whose own registered company in the Philippines is the legal employer of full-time staff who work only for their client, from US$1,250 a month all-in, with a client success manager and six months' free re-recruitment for any reason. If a BPO suits your work better, the questions above will serve you just as well. Tell us about the work, or see how offshore staffing works for New Zealand businesses.

Last checked 17 October 2026. This guide is general information, not legal advice.