How Outsourcing in Singapore Drives Business Growth?

Many have the idea that all tasks should be outsourced in Singapore to reduce the operating costs of hiring in-house employees to complete the job or to streamline the business’s efficiencies. However, before outsourcing any part of your business, you have to understand the advantages and possible disadvantages that outsourcing in Singapore will bring.

Read on to assess whether to continue or avoid the idea of outsourcing for certain operations and decide the significant impact that will be incurred to your Singapore company.

What are the Advantages of Outsourcing in Singapore

The advantages of outsourcing in Singapore include:

Time efficient

Outsourcing tasks such as back-office operations or administration frees up your company’s resources, allowing you to focus on the core functions of the business.

Reduce costs

Outsourcing has a lower labour and operational costs as well as a reduction in overhead expenses as compared to hiring in-house staff.

Savings on technology and infrastructure

Outsourcing doesn’t take into consideration the costs of infrastructure costs as the hired personnel will have the full responsibilities for the business processes and hence, developing the infrastructure for the same costs.

Expertise

However, with a skilled resource, the business can easily seek the right talent and ensure a higher quality of outsourced work done.

Increased work efficiency

As a result, outsourced vendors bring in specialised knowledge and adequate knowledge, leading to an increase in the productivity and efficiency of your business.

Reduce risks

Outsourcing tasks removes large share of risks as they are shared among the outsourced vendors which is beneficial as your company will face lesser risks of having to pay fines or penalties.

Staff flexibility

If businesses that have cyclical or seasonal demands for operation to bring in extra staff, outsourcing creates opportunities to avail of additional resources as staff can be realised when they are no longer required as outsourced vendors have taken over.

What are the Disadvantages of Outsourcing in Singapore

Although there are many pros of outsourcing your company’s functions, you should also note the disadvantages that follow, which include:

Loss of managerial control

Once the external vendors are hired, the managerial control belongs to the other company and there could be a risk of the contractor entering into transactions or doing things in the name of your company that you would not approve, damaging your company’s reputation.

Misaligned values or standards

It is almost not guaranteed that your vendor is driven by the same mission and standard that drives your company. The contractor’s focus is to help the business make a profit.

Hidden costs

You may wonder, why are there still hidden costs when I chose outsourcing in order to cut costs. Well, anything that may crop up later during the contractual relationship that is not covered will constitute in additional charges such as insurance, etc.

Threat to security

If your company has access to tons of confidential such as access to client emails and bank accounts, payroll and medical records, there might be a risk of a breach of confidentiality.

Hence, the outsourcing company must have their credibility as well as their background checked before being engaged.

Time and effort

The selection of vendors should not be done lightly as time and effort should be put into researching, testing, and selecting a suitable partner.

Issues faced replacing outsourcing vendors

Lack of knowledge of the outsourced functions also meant that you as the business owner might have difficulties describing the services and proper job scope to the suitable supplier.

Global Challenges Faced by Singapore Outsourcing Providers

Nevertheless, the main issue is that many companies in Singapore choose to outsource services to providers in other countries. Many Singaporeans seeking jobs find outsourcing positions unappealing for various reasons.

Hence, this has led to a decline in local talent in this field and has not seen growth in recent years, making it difficult for many Singapore companies to seek outsourcing services within the country.

Therefore, those who carry out outsourced services in Singapore ought to counter this turn of events. They may do so in either of two ways:

• By offering services that most or all of their foreign counterparts do not
• By providing services at such a high level they will naturally become the first choice of all companies, regardless of the location of the companies in question

Outsourced Services in Singapore

Fortunately, we at Paul Hype Page & Co. are one of Singapore’s leading providers of accounting services, payroll, and HR services. Our team has much expertise and knowledge in areas such as taxation, incorporation, work visas, and many other corporate services.

Some of the services we provide include:

1. Payroll Outsourcing Services
   • Calculation of monthly payroll
   • Employer registration with the Singapore Central Provident Fund (“CPF”)
   • Calculation of statutory deductions including CPF, skills development levy, foreign worker levy and ethnic/religious fund deductions
   • Payroll processing and annual reporting
   • Issuance and maintenance of electronic pay slips/remuneration reports
   • Electronic-leave management
2. Accounting & Book-Keeping Services
   • Management reporting of trial balance, ledgers and reports issued monthly
   • Creditors control purchase invoices and aged creditor reports
   • Cash management of bank reconciliations, treasury controls and invoice/payment processing
   • Liaising with auditors over audit queries and updating trial balances with year-end audit adjustments
   • Debtors control over sales invoicing and ageing debtors report
   • Preparation and conversion of financial statements
   • Other reports such as cash flow, budgetary control, and fixed asset register