Business Process Outsourcing, or BPO, is the decision to have an outside provider perform work that otherwise could have been performed inside the business. What has changed is the number of ways that work can now be delivered.

An employer can keep a function internal, hire remote employees, use an outside service provider, automate portions of the process, move work into another labor market, or combine several of those approaches. Staffing Industry Analysts reflects that broader market by treating Staffing and Process Outsourcing as separate but related parts of the overall workforce-solutions ecosystem. [1]

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That creates a more useful question than simply asking whether a job can be moved offshore: Which parts of the work actually need to stay together?

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A single job title may contain very different kinds of work. Some tasks require deep company knowledge. Some are repetitive. Some require customer judgment. Some appear only during peak volume. Some can be automated. Some can be performed effectively by an outside team.

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BPO gives an employer the ability to make those decisions separately instead of assuming the whole job has to move—or the whole job has to stay.

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What Labor Staffing Can Help You Outsource

A BPO program does not have to mean transferring an entire department. It can begin with a clearly defined portion of the operation that has enough volume to matter and a clear enough boundary to transfer successfully.

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Depending on the client, process and service design, Labor Staffing can help build outsourced teams around work such as:

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• Customer Service and Call Center Support

• Data Entry and Back-Office Processing

• Virtual Administrative Support

• Remote Reception and Customer Intake

• Appointment and Service Scheduling

• Order Entry and Order Processing

• Order Status and Returns Support

• Billing and Invoice Processing Support

• Document and Records Processing

• Shared Email and Inbox Management

• Project and Workflow Coordination

• Tier 1 Help Desk and Technical Support

• Content Review and Moderation

• Selected Bookkeeping and Accounting Support

• Other repeatable digital or administrative workflows that can be clearly transferred

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Those examples are starting points, not the boundary of the service. The better question is often not, “Can this job be outsourced?” It is, “What work is consuming capacity inside the company, and which parts of that work actually need to remain there?”

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Why Labor Staffing for BPO?

Labor Staffing comes to outsourcing through the workforce business. Since 1999, our work has required us to understand why employers need additional capacity in the first place. Sometimes the problem is a vacancy.

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Sometimes demand has increased. Sometimes the work is seasonal. Sometimes growth creates administrative work faster than the company wants to build another internal department. Sometimes a special project appears.

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Sometimes managers are spending too much of their day performing work that does not require a manager.

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Outsourcing is one possible answer, but it is not the only answer.

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An employer can hire internally, use overtime, move work between departments, add temporary employees, recruit remote workers, automate part of the work, outsource a process or transfer responsibility for an entire function. Labor Staffing can work across several of those models, which allows the conversation to begin with the work rather than with a predetermined product.

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The objective is not to turn every business problem into outsourcing. It is to determine which workforce structure makes sense for the operation.

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A Job Is Really a Bundle of Tasks

One of the most important changes in modern workforce design is that the job title does not always have to be the unit of decision.

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Imagine a customer-service coordinator who spends part of the day answering routine order-status questions, part correcting unusual orders, part updating records and part managing important customer relationships. On an organization chart, that looks like one job. Operationally, it may be four very different kinds of work.

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Routine order-status questions may increasingly be handled through self-service or automation. Record updates may be transferable to an outside processing team. Order exceptions may still require a trained person, but not necessarily someone sitting inside the corporate office. An important customer escalation may belong with an experienced internal account manager who understands the relationship.

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The employer does not necessarily have to choose between outsourcing the entire job and keeping the entire job.

It can decide where each piece of the work belongs.

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That becomes increasingly important as software and artificial intelligence make the unit of workforce design smaller than the traditional job description.

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Start With One Meaningful Piece of Work

For a middle-market employer, the phrase “business process outsourcing” can sound larger and more disruptive than it needs to be.

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A company does not have to begin by transferring an entire department.

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APQC documented a mid-sized retailer and manufacturer using strategic outsourcing relationships to support aggressive growth while controlling fixed costs. [2] That is a useful illustration of why outsourcing can be a capacity strategy rather than simply a search for cheaper labor.

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A retailer might begin with one returns queue. A distributor might start with appointment scheduling or shipment-status communication. A service company might start with customer intake. An accounting department might transfer one repetitive invoice-processing workflow. A growing company might move a shared inbox that several highly paid employees currently monitor inconsistently.

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The starting point should be important enough to matter but contained enough to understand. The process can be transferred, operated, measured and improved before the employer decides whether the boundary should expand.

That creates a way to prove the model without redesigning the entire company on day one.

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Outsourcing Can Create Capacity Without Building Another Internal Department

Growth creates work behind the work.

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A company adds customers, locations, orders, contracts, products or production volume. Somewhere behind that growth, additional customer emails appear. More invoices have to be processed. More appointments have to be scheduled. More records have to be updated. More documents need review. More exceptions have to be resolved.

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Eventually somebody has to own that work.

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The traditional answer is another employee, followed by another employee, and eventually another internal department. Sometimes that is exactly the right answer.

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BPO creates another choice: buy the capability instead of continually building the department.

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That can be especially useful when demand is growing but the company does not yet know what the long-term size of the function should be, when workload varies materially, or when management would rather keep capital and internal leadership focused on the parts of the business that differentiate the company.

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The economic question therefore is broader than whether an outside employee earns less than an internal employee. The question is what it costs the organization to create and maintain the capability itself.

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BPO Is Showing Up Across More Industries

 

Retail and Ecommerce

Retailers generate large amounts of work around the transaction rather than on the sales floor: order processing, product questions, returns, customer email, complaints, order-status communication and back-office updates.

At the same time, the National Retail Federation reports that retailers are rapidly increasing their use of artificial intelligence to improve efficiency, customer engagement and employee support. [3]

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That changes the outsourcing opportunity. A retailer may not need an outside team to manually answer every routine question. Some requests may be handled through self-service or automation, while an outside team handles exceptions, unusual orders, customer frustration or situations that require a person to investigate and make a judgment.

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The work has not disappeared. The mix of work has changed.

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Hospitality and Travel

Hotels illustrate particularly well why employers can need several different workforce models at the same time.

The American Hotel & Lodging Association reported in March 2026 that hotel owners continued to rank labor costs, fluctuating demand and workforce shortages among their major operating pressures. More than half of surveyed respondents described their properties as somewhat or severely understaffed. [4]

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Some hospitality work can be performed away from the property: reservation support, customer communication, scheduling, administrative processing, document work and similar functions.

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Other work cannot.

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A room still has to be cleaned inside the hotel.

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If a hotel needs additional room attendants who work inside the hotel's existing housekeeping operation, that is staffing. If an outside provider assumes responsibility for operating the housekeeping function itself—potentially including department management, inspectors or supervisors, frontline employees, scheduling, quality controls and agreed operating outcomes—that relationship moves into Managed Services or Department Outsourcing.

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Both involve outside workforce capacity. The difference is the responsibility being transferred.

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Logistics and Distribution

Physical freight has to move through physical facilities, but a surprising amount of the work surrounding freight is information.

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Appointments have to be scheduled. Orders have to be entered. Customers want updates. Documents have to be processed. Vendors and carriers exchange information. Exceptions have to be investigated and communicated.

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Those processes do not all require someone standing on the dock.

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The logistics industry is also becoming increasingly automated, which makes the condition of the underlying process especially important. MHI's 2026 warehouse-automation guidance makes the point directly: automation does not repair a broken process; it can amplify and accelerate the problems already inside it. [5]

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The same principle applies to BPO. Moving a poorly designed process somewhere else does not automatically improve it.

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The better opportunity is to understand the workflow first, determine what should remain physical, identify what can move digitally, and decide which steps should be performed by people versus technology.

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Manufacturing

Manufacturing is becoming more digital even when the product itself remains physical.

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Order administration, purchasing support, records, document control, scheduling support, customer communication, invoice processing and other business processes surround the factory floor.

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Manufacturing Leadership Council research published in 2026 found that about 71% of surveyed manufacturers were already using generative AI and nearly 90% expected to increase usage during the following two years. Process improvement and root-cause analysis were among the leading applications. [6]

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That matters to outsourcing because a manufacturer should not assume the process it transfers tomorrow has to look exactly like the process it performed internally yesterday.

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Some repetitive steps may disappear. Other work may become system-driven. The outside team may increasingly handle exceptions, coordination, validation, customer communication and situations that software cannot reliably resolve.

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Professional, Administrative and Finance Support

Administrative work often grows quietly.

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Scheduling, intake, customer communication, document preparation, billing support, records and recurring transaction work become distributed across employees whose primary jobs are something else. Eventually expensive employees spend increasing portions of their day on work that does not require their level of expertise.

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BPO creates another option between absorbing that work indefinitely and immediately building another internal support department.

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Selected finance and accounting processes can fit the same model, particularly transactional work such as invoice processing, billing support, document preparation and bookkeeping support when the work, controls and client requirements support outsourcing.

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The value is not merely getting the work done elsewhere. It is allowing internal employees to spend more of their time on the work the company actually hired them to do.

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AI Changes the BPO Question Before It Changes the BPO Workforce

A company preparing to outsource a repetitive process should now ask one additional question:

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Should the process still be performed this way at all?

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Artificial intelligence, automation and self-service tools are increasingly capable of handling routine, rules-based parts of many workflows. IAOP's 2026 view of the outsourcing industry describes AI-enabled delivery as increasingly expected rather than unusual, while buyers are placing more emphasis on measurable outcomes, specialized capability and flexible global delivery models. [7]

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That does not mean every process can or should be automated.

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The work technology struggles with is often where people become more valuable: incomplete information, unusual situations, customer emotion, judgment, validation, troubleshooting, quality control, escalation and decisions that do not fit the standard path.

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The strongest BPO model may therefore combine both.

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Technology handles the routine transaction. People handle the exceptions. The client retains the decisions that truly require internal expertise.

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The objective is not to build an outsourced workforce whose primary job is competing with software. It is to use people where human judgment, communication and adaptability create value.

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Remote Workforce, BPO and Managed Services Are Different—But They Can Overlap

These models are related, but the amount of responsibility transferred is different.

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Remote Workforce is primarily staff augmentation. Labor Staffing provides an individual or team working remotely, while the client generally continues to own the business process, establish priorities and direct the day-to-day work.

Business Process Outsourcing transfers responsibility for performing an agreed process—or a defined portion of one—to an outside provider. The client is no longer simply purchasing another person. It is purchasing execution of the work.

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Managed Services places still greater emphasis on the provider's continuing responsibility for operating an agreed function or service. The American Staffing Association defines Managed Services as a staffing firm assuming responsibility for operating a specific client function on a continuing basis and notes that these arrangements are often structured through a statement of work rather than simply hourly labor. ASA's examples include call centers and data processing as well as maintenance and janitorial functions. [8]

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That means there is no honest rule that says BPO is always remote and Managed Services is always onsite.

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A remotely operated customer-service function could be both BPO and Managed Services if the provider is responsible for running the function rather than merely supplying employees.

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Likewise, a hotel outsourcing its entire housekeeping department is outsourcing a business function in the broad sense. The relationship is especially well described as Managed Services or Department Outsourcing because the provider assumes ongoing responsibility for operating the department at the property.

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The important distinction is what responsibility is being transferred: a person, a process or an operating function.

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Global Talent Does Not Mean One Geography

Outsourcing no longer points automatically to one country or one labor market.

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IAOP's 2026 industry research highlights the continued evolution of nearshore strategies, global capability centers and distributed workforces alongside traditional offshore delivery. [7]

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Different processes can call for different locations.

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A customer-facing function may benefit from close time-zone alignment, language skills or strong familiarity with the U.S. market. Another workflow may benefit from international talent and a different cost structure. Some work can be advanced overnight so that a U.S. team begins the next morning with the queue already processed.

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A blended model can also make sense. Leadership or complex escalations may remain in the United States while another team handles higher-volume transactions elsewhere.

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The right geography follows the work.

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Time Zones Can Become Operating Capacity

International outsourcing is often discussed in terms of wage differences, but time itself can also create capacity.

Some processes can continue after the U.S. office closes. Documents can be processed. Administrative queues can move forward. Information can be prepared for the next business day. Customer support can cover a broader service window without requiring every domestic employee to work overnight.

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That advantage disappears when the outsourced team continually needs real-time decisions from people who are asleep.

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The value of a time-zone difference therefore depends on how independently the work can move. A process with clear rules and limited handoffs may benefit substantially. A process requiring constant interaction with U.S. management may become slower rather than faster.

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The operating rhythm matters as much as the labor market.

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BPO Economics Should Be Compared With the Cost of the Process, Not Just the Wage

A low hourly wage can still produce an expensive process.

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Management time has a cost. Turnover has a cost. Rework has a cost. Technology has a cost. Errors have a cost. Slow customer responses have a cost. Highly paid internal employees performing repetitive administrative tasks have a cost.

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The meaningful comparison is the total cost of producing the result.

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Depending on the work, an outsourced relationship may be structured around dedicated people, committed capacity, a defined scope of work, transaction volume, service levels or another agreed commercial model. ASA's description of Managed Services specifically recognizes statement-of-work structures rather than limiting the relationship to hourly labor. [8]

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No single pricing structure fits every outsourced process. The commercial model should reflect what is actually being purchased and who is assuming the operating risk.

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Outsourcing Creates a Different Kind of Vendor Risk

When another organization begins accessing a shared inbox, customer record, internal system or operating workflow, the employer is doing more than adding labor. Part of the operating environment now extends outside the company.

Access therefore needs to be intentional.

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Which systems does the outside team actually need? What information can it see? Which permissions are unnecessary? How are accounts created and removed? Can data leave the client's systems? Are there geographic or contractual restrictions? Who is notified when something unusual happens?

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NIST's 2026 supply-chain due-diligence guidance is specifically focused on technology suppliers, but the underlying principle is directly relevant: organizations should evaluate meaningful third-party risk before granting access rather than after the relationship is already operating. [9]

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The more important the process, the more important the boundary.

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Sometimes the Right BPO Recommendation Is Not to Outsource

Some processes are poor outsourcing candidates.

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The work may change constantly. It may depend heavily on institutional knowledge that cannot easily be transferred. It may require continuous physical interaction with the operation. It may expose information or decision authority the company does not want outside the organization. The workload may simply be too small to justify another operating relationship.

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Sometimes the better answer is a remote employee working directly inside the client's team. Sometimes it is temporary staffing. Sometimes an entire physical function belongs under Managed Services. Sometimes automation should remove part of the work first. Sometimes the company should keep the process exactly where it is.

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Labor Staffing does not need every workforce problem to become BPO.

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The objective is to determine where the work belongs.

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BPO Outsourcing FAQs

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Do I have to outsource an entire department to use BPO?

No. A BPO engagement can begin with one workflow, customer queue, recurring transaction stream, shift or administrative process. Starting with a clearly bounded piece of work allows both sides to learn how the process transfers, what exceptions occur and whether the operating model creates enough value to justify expanding the scope.

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What is the difference between BPO and hiring remote employees?

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With Remote Workforce staffing, the client generally continues to own and manage the business process while Labor Staffing provides the remote talent. In BPO, responsibility for performing an agreed process or portion of a process shifts toward the outside provider. The distinction is less about where the worker sits and more about what responsibility the client is transferring.

Is Managed Services the same thing as BPO?

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They overlap, but they are not perfect synonyms. BPO is the broad concept of outsourcing a business process or function. Managed Services emphasizes the provider's continuing responsibility for operating an agreed function or service, often through a defined scope of work. A remote customer-service operation could qualify as both, just as a physically operated department such as hotel housekeeping can be a form of outsourced business function delivered through a Managed Services model. [8]

What types of work are good candidates for BPO?

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Good candidates are usually processes that can be separated clearly from the rest of the operation, transferred with enough knowledge to perform correctly and evaluated against meaningful expectations. Customer support, scheduling, order administration, document processing, data work, billing support, shared-inbox management and other repeatable administrative workflows can fit. Work requiring constant onsite judgment or highly proprietary institutional knowledge may be a poor candidate.

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How are AI and automation changing BPO?

They are changing which parts of a process need people. Routine, rules-based work is increasingly a candidate for automation, while people remain important for exceptions, judgment, customer interaction, validation, troubleshooting and escalation. The strongest operating model may combine technology with people rather than simply moving an unchanged manual process into another labor market.

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There Is More Than One Way to Get the Work Done

Businesses no longer have to treat every new unit of work as another internal job description.

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A function can remain internal. A remote employee can join the existing team. A repetitive task can be automated. One workflow can be outsourced. An entire digital process can move to a BPO team. A physical department can operate under Managed Services. Several of those approaches can exist inside the same company.

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Labor Staffing's role is to understand what work has to be accomplished and help determine the workforce structure that fits it.

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That is where the BPO conversation begins.

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Sources

 

[1] Staffing Industry Analysts — Workforce Solutions Ecosystem: 2025 Update
SIA separates Staffing and Process Outsourcing into distinct sectors of the broader workforce-solutions market.
https://www.staffingindustry.com/research/research-reports/americas/workforce-solutions-ecosystem-2025-update

 

[2] APQC — Gain Scale and Speed with Business Process Outsourcing
Practitioner research involving a mid-sized retailer/manufacturer using outsourcing to support growth while controlling fixed costs.
https://www.apqc.org/resource-library/resource-listing/gain-scale-and-speed-business-process-outsourcing

 

[3] National Retail Federation — Retail AI Trends 2025
Research on current AI adoption, investment priorities, and customer/employee applications in retail.
https://nrf.com/research/retail-ai-trends-2025

 

[4] American Hotel & Lodging Association — Rising Cost, Staffing Challenges Persist for Hotels as Travel Demand Expected to Hold Steady, March 2026
https://www.ahla.com/news/rising-cost-staffing-challenges-persist-hotels-travel-demand-expected-hold-steady

 

[5] MHI — Preparing Your Warehouse for Material Handling Automation
Industry guidance on process readiness, automation, and hybrid warehouse operations.
https://www.mhi.org/blog/234992/preparing-your-warehouse-for-material-handling-automation

 

[6] Manufacturing Leadership Council — Survey: GenAI Adoption Surges in Manufacturing, April 2026
Research on current generative-AI adoption and planned expansion among manufacturers.
https://manufacturingleadershipcouncil.com/survey-genai-adoption-surges-as-manufacturers-continue-to-grapple-with-data-skills-issues/

 

[7] International Association of Outsourcing Professionals — 2026 Global 100 / Outsourcing World Summit 2026 Research and Industry Trends
Current themes include AI-enabled delivery, specialization, nearshore strategies, global capability centers, and distributed workforce models.
https://www.iaop.org/Content/23/196/5920

 

[8] American Staffing Association — Definitions of Staffing Solutions and Services
Defines Managed Services as ongoing responsibility for operating a client function and includes both digital and physical-function examples.
https://americanstaffing.net/job-seekers/definitions-of-staffing-services/

 

[9] National Institute of Standards and Technology — Cybersecurity Supply Chain Risk Management: Due Diligence Assessment Quick-Start Guide, 2026
NIST SP 1326.
https://csrc.nist.gov/pubs/sp/1326/final