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Outsourcing Models – How To Know What’s Right For You

When a business cannot deal with the workload in house, a candidate or party outside of the business is often hired to assist in performing those services. This is called outsourcing, and it’s a practice that companies sometimes use to cut costs – especially if it’s easier to do this than to train up another employee.

The best model of outsourcing is one that meets the needs of the business. Clearly identifying those needs is a strategic step to take to ensure that the model chosen is the right one. There are four types of models when it comes to outsourcing.

Freelance

The freelance model of outsourcing assigns work to a freelance worker, which can be long-term, short-term, part-time or full-time. Jobs can be posted to freelance sites, freelancers can bid on them and you can select who you would like to work with. This model is a quick and easy way to get one-off projects completed that require special skills, or obtain a little extra help during the busy season.

Pros: Cost-effective, quick and the skills needed for the job can be sourced

Cons: Overselling skills, difficult to brief, and jobs can be further outsourced by freelancers.

Project-Style Work

This model focuses on project-based work, and involves outsourcing entire projects to a specialised outsourcing centre. Essentially all you have to do is provide the centre with the project requirements, and they will carry out the development work, project management and quality control through to the project’s completion.

Pros: Less work to be done by you, cost-effective in money and time, new staff aren’t needed and there is a fixed cost for the project.

Cons: May lack local knowledge if located overseas, time zone and language barriers can be difficult to overcome

Business Process Outsourcing

With the business process outsourcing model, a service provider sets up and operates an offshore office for you that they hand over when it is ready. Essentially, it’s contracting a business or organisation hires another company to perform a process task required by the hirer for the business’ operational success.The provider has the facilities, setup, office environment and management required for global team members to work.

Pros: offers improved productivity, increased capacity, no need to worry about other sectors, inexpensive and an easy way to grow your team.

Cons: Large-scale BPOs can be more expensive to run and can be difficult to communicate needs and wants if the BPO doesn’t understand your industry or business.

Build-Operate-Transfer Model

This model is the model you want to employ if you’d like to build a separate office outside of your home country with more than 25 staff. To begin with, and much like a BPO, a provider ensures that there is workspace and office equipment, and hires the employees. Rather than have the provider run the business for you, they then transfer the operation back to you.

Pros: Create work culture and environment among global team members, costs are less expensive than a BPO if there are more than 15 employees.

Cons: Can be expensive to set up, operating under foreign work ethics and work cultures can impact team management, and requires time and effort to invest in the business in person.

Always consider what is best suited for your business, and confer with professional advisors before implementing a strategy regarding outsourcing

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Changes To Employers & Super When Stapled Funds Come Into Effect 1 November 2021

Posted on September 20, 2021 by admin

This year has seen a lot of amendments and changes to the rules governing superannuation funds and their providers by the Federal Government that may have an impact on how you as an employer deal with super.

Are you aware of the changes to “choice of fund” rules that you might need to be aware of as an employer of new to the workforce employees?

Currently, as an employer, you may be paying contributions to your new employees into a  default superannuation fund of your choice if they have failed to provide you with their own choice of superannuation fund details. This may be due to not having a superannuation fund (as in, the employee is new to the workforce), or as a result of other circumstances.

As an employer, you must provide all new employees with a Superannuation standard choice form within 28 days of their start date. They may also be provided with one if:

If the employee holds a temporary working visa or their super fund undergoes a merger or acquisition, they will not be able to choose their super fund themselves.

From 1 November 2021, if you have new employees start and they don’t choose a specific super fund, you may need to request their ‘stapled super fund’ details from the Australian Taxation Office.

A stapled super fund is an existing account that is linked, or ‘stapled’ to an individual employee, so it follows them as they change jobs. This change aims to reduce the number of additional super accounts opened each time they start a new job. If a new employee does not have a stapled fund and they do not choose a fund, the employee’s super can be paid into the employer’s default fund.

With fewer superannuation funds being opened, employees are less likely to generate ‘lost super’ as they transition through their employment periods and various careers leading up to their retirement.

As an employer, you’ll be able to request stapled super fund details for new employees using the ATO’s Online services for business.

To get ready for this change, you can check and update the access levels of your business’ authorised representatives (such as your accountant or bookkeeper) in Online services. This will mean you’re ready to request stapled super funds if needed. It will also assist in protecting your employees’ personal information.

As an employer, you legally cannot provide your employees with recommendations or advice about super unless you are licensed by ASIC to provide financial advice. You can give your employees information about choosing a fund however, including:

Remember, registered tax agents and BAS agents like us can help you with your tax and super queries. Come and speak with us about your options, and to ensure that you are compliant with your super requirements as an employer.

If you are a new employee entering into the workforce, and you’d like to know more about your options when it comes to superannuation, you should have a serious discussion with providers and conduct your own independent research on the funds available.

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