Offshoring vs. Freelancing: Which is Better for Your Business?

With labour shortages in Australia increasing, businesses look for ways to find skilled staff and keep up with the workload. Two commonly used options to find team members are offshoring and hiring freelance professionals. Both offshoring and freelancing provide businesses with a more accessible and cost-effective solution to growing their team. However, they are two different concepts that each have their own advantages. As a growing business, it’s important to do your research and see which of these options best suits your business.

What is freelancing?

Freelancing is the process of hiring an individual directly to do particular tasks or projects. This can be done for tasks involving accounting, bookkeeping, admin and marketing. Most freelancers are not considered regular or permanent employees, which means they can accept work from other clients.

Advantages of freelancing:

Cheaper than hiring a full-time employee
No overhead costs since they use their own equipment to complete tasks
Large pool of specialised talent
Easy hiring and onboarding
Ideal for short-term projects
No long-term commitment

Disadvantages of Freelancing

Assurance and Output - Since they are not fully committed to your business, you have less control of their output, and you cannot ensure that your deliverables will be prioritised.
Data Security - Freelancers use their own resources to conduct work so you have no way of controlling where and what your information is being used for.
Employee Benefits - Most freelancers do not get the same benefits a regular employee receives. Unlike offshore staff, they need to process their own statutory requirements, avail health insurance and pay their own taxes. It is quite common that they don't meet the requirements and hence may be operating outside the tax and employment laws of the country they live in.

What is offshoring?

Offshoring is the process of using a third-party company to find the right staff, manage the process, pay the staff wages, supply all the equipment needed (i.e. computers, headsets, etc), and ensure all statutory requirements are met for each staff member. Offshoring providers like TRA have a comprehensive recruitment method that consists of an accounting test (for accounting staff), a personality test and a series of interviews. This is to ensure you get the best, most suited and most qualified staff for your business. Unlike freelancers, offshore staff are considered an extension of your onshore team. You will take control and manage the staff on a day-to-day basis exactly like you would with Australian staff members.

Advantages of offshoring:

Lower operational and labour costs

Offshoring allows businesses to save up to 70% on operational and labour costs compared to those in Australia. It is highly cost-effective to hire offshore staff since the cost of living in countries like the Philippines is much lower than in Australia.

More control of business operations

Offshoring gives you more control over business operations. It lets you deal with the staff directly, provide instructions and train staff to carry out all the tasks for your specific role. You have more control over how the work is done and the quality of the output. It is significantly more flexible than outsourcing

A large pool of skilled professionals

Offshoring in Australia has become the norm, especially in the areas of accounting, administration, bookkeeping, and digital marketing. The business model allows companies to access talent who are highly skilled and fluent in English. Top offshoring destinations like the Philippines, for example, are home to top accounting and administrative talent as the country’s education and professional accreditations are similar to those of Australia. They adopt the same International Financial Reporting Standards (IFRS) and even have a longer education length for an accounting degree than in Australia.

Proper Staff Management and Data Security

Having an offshoring provider means that your staff is properly managed and monitored. You can always contact your provider to assist you with staff concerns. Moreover, your offshore staff will be provided with the needed equipment to conduct jobs which makes it easier to implement stringent data security practices. This way, you can ensure that your data is safe from breaches.

Complete Employee Benefits

Offshore staff are entitled to complete employee benefits such as healthcare and government-mandated benefits (13th-month pay, holiday premiums, etc.). Your offshore provider will manage these benefits for you and ensure your staff gets the career fulfilment they deserve.

Offshoring and Industry Expertise

Offshore providers specialise in finding and recruiting qualified staff. The Remote Accountant, for one, is headed and managed by a team of offshoring and accounting industry experts. This gives us the right insight to support Australian businesses. We work with businesses across different industries to find highly skilled offshore staff.

Offshoring as a more sustainable staffing solution

As a growing business, finding good staff is necessary to meet client demands and generate profit. Working with freelancers may be faster and less costly, but it is not the best solution in the long run. Using an offshoring company helps you manage and retain your staff by ensuring they get the proper onboarding, training and employee benefits. You will have a partner that will handle all your HR, IT and staffing requirements so that you can focus on growing your business. At TRA, we hold our clients’ hands through the offshoring process and offer them a mentoring program that teaches them how to better manage their staff and make the offshoring journey a success

Ready to start your offshoring journey?

If you’re looking for an offshore provider in the Philippines that specialises in helping Australian accounting practices and businesses, get in touch with us. TRA Offshoring Solutions is owned and operated by an FCPA-qualified accountant who is also an expert in the area of quality standards for accounting practices. Furthermore, his accounting practice is operated by staff in the Philippines who do administration, accounting and marketing. No other offshoring company has this unique mix of skills to ensure your offshore accounting journey is a success.