The past few years have taken their toll on the lending and finance industry. A perfect storm of narrowing margins, tighter compliance requirements and excessive time focused on administration has led many brokers to seriously consider outsourcing for the first time. With its promise to reduce costs and free up time from menial tasks, outsourcing can make a huge difference, especially in small businesses.

But outsourcing has changed to an enormous degree, even over the last five years. So before committing, it’s important to understand the different types of services available, to ensure you make the right choice to meet your needs.

Freelancing vs dedicated staffing

In the mid-2010s, the dramatic rise of freelancing and the ‘gig economy’ began to transform the workplace. In fact, up to one-third of Australians were taking part in the freelance economy in 2015, powered by websites such as Upwork, Freelancer and Airtasker.

Under the freelance model, workers are matched with a task or activity. Once the activity is complete, the deal is done. This model works very well for one-off, easily contained tasks.

But there’s a catch. With no ongoing relationship between employer and freelancer, there’s no opportunity to build trust or familiarity with the business. Employers spend a lot of time finding freelancers who can meet their professional standards, and then more time briefing, reviewing work and bringing it into line with requirements. On top of that, businesses that hire overseas freelancers, while making huge savings in labour costs, also run into difficulties with communication.

That said, outsourcing can still be incredibly cost-effective – especially outsourcing overseas. Fortunately there’s a lot more to outsourcing than freelancing, and other models of outsourcing – like dedicated staffing – enable a much longer relationship between business and staff. Once you find the right person, a fruitful ongoing relationship can develop.

Dedicated staffing is where a specialist staffing agency operates an outsourcing hub overseas. They headhunt specialised staff on your behalf, employ, onboard and train them, and provide them with professional workspaces, IT infrastructure and employment conditions. In other words, your staff work overseas, taking advantage of today’s collaborative online workspaces and digital communication, but they work directly (and only) for you.

This model is less like hiring a freelancer and more like expanding your inhouse team. Your offshore staff are dedicated to your business, work as part of your broader team, and develop long standing relationships with you, which, hopefully, last for years.

Where freelancing is about outsourcing tasks, dedicated staffing is about outsourcing roles.

Security, privacy & the importance of specialist providers

But even among dedicated staffing agencies, there are big differences in services. While some ‘all rounders’ offer generic services, such as IT support and back-office administration, to businesses working in virtually any industry, the newest generation of outsourcing providers offer a far more bespoke service.

In the lending and finance industry, for example, you should expect a good specialist outsourcing agency to:

• Offer full compliance with Australian privacy legislation, handling all personal information in accordance with the Australian Privacy Principles, including processing, document and data storage in Australia, rather than overseas, privacy clauses in staff contracts, and biometric and password security controls.
• Possess ISO27001 Information Security Management Systems accreditation, the internationally recognised benchmark for maintaining customer confidentiality which encompasses data security, privacy, business continuity and risk management practices.
• Welcome you to audit your offshore operations.
• Work with you to select staff with the necessary skills, training and experience. They should be able to provide you with a curated list of professional candidates, trained in current ASIC and APRA requirements, and proficient in the software and other processes used in your business.

An integrated workforce

The recent rise of outsourcing is linked to high-speed internet and improvements in communications technology. Today, working with an international team can be much the same as working with an interstate team, or even a team based in different buildings in the same city. Teams communicate via phone, email and messaging throughout the day, with regular online meetings via services like Zoom or Skype. Cloud-based software applications allow shared access to business workspaces.

Your offshore team should be working under similar conditions to your local team, too. Reputable offshoring agencies ensure outsourced staff are contracted under Australian-style workplace conditions, with holiday leave, sick leave, overtime payments, medical insurance, performance bonuses, wellness programs and inclusive recruitment practices.

Today’s outsourced teams are a far cry from the freelance guns-for-hire of even a few years ago. With new models of supported recruitment, dedicated staffing and industry specialisations, outsourcing has evolved as rapidly as the technology that supports it. Business can now access far more integrated and sophisticated work structures than the freelancing models of the past.

Want to outsource some of your back office tasks?

Loanworks broker support solutions will streamline your sales, loan processing and credit support processes, leaving you to focus on writing more loans and increasing your margins.

To learn more, please call Jason Goodacre, our Customer Relationship Manager on +61 498 112 056. Jason has worked on designing and delivering customised solutions for many clients, and has the expertise, creativity and commitment to find the right one for you.