
Online retailers constantly roll out new products or variations of existing items to stay on top of the shifting market. It boosts sales for retailers to increase the variations of those products if customers appear to be seeking additional product options.
However, expanding and managing inventory comes with a price.
With the increase in products and SKU (stock keeping unit) counts, it becomes harder to organize, track, and restock products in your inventory. And without effective product SKU management, you may encounter inaccurate order fulfillments that can impact your bottom line. That’s a challenge that most growing businesses have to deal with.
As your Ecommerce platform drives more demand and your warehouse space starts to expand alongside it, inventory accuracy becomes far more important — as it could be the difference between getting more sales and losing customers because of errors from the inventory level.
In this blog article, we’ll discuss everything you need to know about outsourcing SKU management to reliable outsourcing partners and why you should do so for an effective e-commerce inventory process.
Let’s find out if it’s time for you to outsource SKU management to support the ongoing growth of your online store across multiple sales channels. Keep reading.
As its name suggests, SKU management is the process of developing, preserving, and updating scannable codes known as SKUs (an acronym for “stock keeping unit”) that permit the identification, arrangement, and tracking of a company's goods and materials. It’s an efficient tool for manufacturers and (re)sellers to organize product information. But what are SKUs, and what are they used for?"
An item’s SKU is a unique, alphanumeric code used to track inventory levels. The code typically consists of eight digits, all of which are numbers and letters, representing details about a product, like its color, size, brand, and location. We often think of it as product information in the form of an easy-to-trace code.

SKUs help distinguish products from one another. It would be challenging to keep track of sales and inventories without grouping them according to their model, kind, color, size, or any other distinguishing characteristics.
E-commerce brands develop unique SKUs for their products and services. For instance, a retailer of t-shirts might create internal SKUs that list a product’s specifications, including its color, size, type, and manufacturer. To put it into perspective, the SKU for an H&M red t-shirt in size 8 might be read as “H&M-TEE-RED-08.”
After determining their inventory SKU codes, retailers will enter them into an inventory management system, which is tied to a point-of-sale (POS) system. When a consumer buys at a store, the SKU is scanned, and the POS system immediately removes the item from the inventory and records additional information like the sale price.
Hence, it is easier for managers to identify which products require restocking. To sum up, SKUs help track inventory and identify products. The information gathered from these codes provides retailers with data that may be examined to determine the profitability and operational efficiency of their business.
With an efficient SKU management and inventory management system in place, products are easy to locate and identify from storage to transit to actual purchase.
No matter how big your business is, how many products you carry, or who your customers are, SKUs are considered a must for everyone selling online. This is valuable data that gives you insight into the demand for your products, while reducing the manual work of tracking each product that your online store offers (even and especially when you’re using multiple platforms for selling).
Beyond overall efficiency and informed decisions, product SKU management also serves other crucial purposes in inventory management and your business as a whole. Here’s how it plays a significant role in managing an e-commerce business and ensuring effective inventory management.
Having an SKU in warehouse management makes it easier to rapidly identify particular items and variations. SKUs keep your warehouse organized and make it less of a hassle for your personnel to locate products quickly for effective picking, packing, and stocktaking, which saves time, reduces errors, and streamlines supply chain management.
With systems like SKU numbers in place, your team can assist your customers in finding the item they want. For instance, a customer requests a different size of the product. Store personnel can quickly determine whether there's a product in stock by scanning the SKU.
As a result, there are fewer or no stockout issues when shopping, which enhances the retail customer service experience and boosts customer satisfaction and brand loyalty.
SKUs are a valuable resource that enable you to track your stock throughout the order process and initiate reorders, which is another essential component of a successful inventory management system. When you have your SKUs set up for your business, you can save time and money by determining the appropriate quantities of stock to maintain for your products by compiling data such as sales history. This, in turn, reduces disruptions in supply chain operations.
SKUs allow you to get essential information about your product, enabling you to examine its popularity, seasonal demand, and cyclical sales trends for various customer segments. These insights can help you stock inventory that corresponds with patterns in your customer behavior. When you know which products get the most revenue and which sales channel gets you the most number of customers, it’s easier to make informed decisions that will streamline operations and allow you to focus on the platforms that need extra attention.
Tracking a SKU in product management can provide additional insights into your peak sales periods. When there’s an influx of customer orders, you can increase your inventory levels and marketing efforts.
Likewise, SKU helps you spot “slow months” in retail, which allows you to reduce product orders. In addition, SKUs give you the information you need to identify high-yielding products with a high return on investment (ROI), allowing you to market them and earn as much money as possible while in demand.
Your SKUs are an excellent source of information if you need to lower your price for a few particular items by offering discounts, or if you want to know what discount rate you have previously offered. It maintains a complete record of your sold items and unsold stock, which helps you run a more cost-efficient business.
While it’s clear that SKU management is indeed indispensable in streamlining your Ecommerce inventory management process, it’s also true that it can take a lot of time and manual work for your team to initiate and manage the whole process.
Which takes us to our next point: outsourcing SKU management.
It can take a lot of time and effort, but controlling and tracking your inventory data is essential to the success of your e-commerce business. You can manage your business more profitably and effectively by improving your inventory tracking through SKU management.
If you’re wondering whether it’s time to outsource SKU management, the following are five reasons why (and how) it outsourcing SKU management will help your business grow quickly:
Regardless of how effective your inventory management is, your online store will always be vulnerable to inventory errors. Whether caused by product data entry errors, scanning issues, incorrect selections, or misplaced items, it can cost you a lot of money.
Your business might resort to outsourcing SKU management to the best BPO companies to prevent such errors and ensure cost savings. By doing this, you can avoid mistakes when choosing, packing, and shipping your products to customers.
Also, your outsourcing provider can help you generate reports highlighting inventory management issues and bottlenecks, such as incorrectly labeled, damaged, and out-of-stock items.
SKU inventory management can consume a significant amount of your day that could be used for other critical tasks. For instance, you have to manage your product descriptions, metadata, and keywords to improve your product discoverability on e-commerce sites.
Not to mention the regular upgrading and upkeep of your SKU inventory to guarantee a consistent bottom line. By outsourcing SKU management, you can concentrate on your core business functions where you can make money, like marketing, sales, or building meaningful customer experiences. When you get the expertise of reliable SKU management specialists, you take valuable time back and empower your team to focus on the things that matter the most.
It’s necessary that you implement an inventory management system for your business that can connect SKUs to item profiles, barcodes, and QR codes. Don't panic if you don’t have inventory management software yet. You can get tools for tracking inventory and gaining business insights by outsourcing SKU management to an outsourcing provider.
Security on all levels is one advantage of using inventory management software. For instance, if everything is in the correct sequence, a worker can write data about items, and the manager will approve them. In general, you can permit users to determine which data they can access and view. Every user is therefore restricted, eliminating any possibility of data loss or leakage.
You could get precise tracking of all your products by outsourcing SKU management. As a result, you can anticipate when the products will run out of stock and restock them accordingly. So, instead of making your consumer unhappy with an “out of stock” notification, you can increase their satisfaction by taking proactive actions.
When working with professionals who have extensive experience in SKU management, you improve your supply chain management, boost inventory accuracy, and empower your team to support your customers in the best ways possible.
Higher revenue and improved gross margins are the results of working with a reputable e-commerce service provider with a technology-first inventory SKU system.
Your service provider can assist you in addressing the rising demand from customers looking for 1-2-day shipping by stocking your most popular SKUs in the ideal location and amount prior to customer purchase.
Additionally, your outsourcing partner gives you precise reorder points for each SKU, enabling you to maintain sufficient inventory to meet customer demand. This makes it possible for you to sell your products more quickly, which keeps your revenue coming in.
With all these functions and benefits considered, we know that it might still be difficult to handle several SKUs, especially if you lack the resources to scale up for seamless SKU and warehouse management.
Do you want your SKU, inventory, and warehouse operations to result in more precise inventory cycle counts and quicker fulfillment times? Do you want to ensure that the SKU management systems you have in place are empowering your team to better support your customers across multiple sales channels? Then, work with an outsourcing company with extensive experience in handling SKU data.
KDCI, an e-commerce outsourcing company in the Philippines, offers retail and e-commerce support services to help you manage high-quality SKU data. Our team of product data entry specialists and e-commerce professionals are experts at creating meaningful SKUs that help maintain accurate stock control within your e-commerce inventory.
We also deliver outsourced inventory management services for businesses to improve inventory control and warehousing operations. By optimizing your inventory process and making your products searchable on search engines and e-commerce platforms, we can assist you in maximizing your ROI from outsourcing SKU management and inventory management services.
Are you interested in building your offshore retail and e-commerce team? Contact us and get your FREE consultation with one of our experts!
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If you’ve heard of HR outsourcing services before and are seriously considering it to support your growing business this year, you’re on the right track. It’s the same path most medium to large businesses are taking as they scale their operations — and for good reason.
The truth is, HR functions are also not like they used to be. Because of recent events (global workforce shifts, AI in HR, flexible work setups, and more), they have become more complex. Because of this, organizations are forced to keep up with changing state regulations, support hybrid teams, and address employee wellbeing while still embracing rapid advancements in HR software and technology.
For a growing business, that could be a lot. After all, HR is not the only function that keeps a business afloat.
For decades, HR outsourcing was seen mainly as a way for companies to cut costs by moving payroll or recruitment tasks off-site (or in most cases, offshore). Basically, it’s meant to cover the tasks that take way too much time in order to just get things done at lower costs. Don’t get us wrong, that’s a strategy that worked really well. In fact, that’s still an approach that is used by several businesses today.
But we’ll let you in on a secret that would empower your business.
In 2025, the role of HR outsourcing has expanded far beyond cost efficiency (and from what we’re seeing, it will just keep going in that direction). It’s no longer just about delegating the recurring, repetitive HR administrative tasks or addressing traditional HR challenges.
In this article, we’ll explore how HR outsourcing has evolved in 2025. We’ll also cover the latest trends, the tools powering modern HR outsourcing, and the strategic advantages that forward-looking companies are leveraging to stay ahead.
First, let’s circle back to what HR outsourcing is. Human resource outsourcing (also known as HRO, HR outsourcing, outsourced HR) refers to the practice of partnering with an external provider to manage some or all of a company’s HR functions. Traditionally, this meant mostly payroll or recruitment, or other HR tasks that are tedious, but indispensable. Other similar solutions to HR outsourcing are Recruitment Process Outsourcing (RPO) and working with a Professional Employer Organization (PEO).
But this 2025, the definition focuses on a much wider range of services — compliance, performance management, learning and development, employee well-being, and even workforce analytics through AI-powered HR.
With HR departments stretched thin and talent shortages continuing, outsourcing allows companies to tap into specialized expertise and advanced HR technologies without building everything in-house.
Recent studies show that medium to large enterprises are increasingly turning to outsourcing partners to handle complex compliance issues and workforce management needs. This allowed HR outsourcing to shift from a niche tactic into a mainstream strategy that empowers around 42% of businesses worldwide.
With the rapid evolution of HR technology, these human resources outsourcing providers are offering more sophisticated, integrated solutions than ever before.
We’ve already established that HR outsourcing is indeed a go-to solution for businesses looking to strengthen pipelines, reduce bottlenecks, and streamline operations. That said, there are several reasons why businesses of all sizes (from small businesses to multinational corporations) worldwide choose HR outsourcing solutions.
The outdated view of HR outsourcing as a cost-cutting measure undersells its true value. In 2025, businesses are using outsourcing to drive growth and agility. For example, expanding companies operating across multiple states find it nearly impossible to keep up with varying employment laws. Outsourcing HR compliance ensures that this expansion isn’t slowed or delayed by red tape.
In today’s job market, retaining top HR professionals is a challenge. Outsourcing solves this by giving companies access to a wider talent pool — experienced recruiters, compliance experts, and L&D specialists — without competing in a crowded hiring market. With HR outsourcing, the organization benefits from a large pool of HR talent just waiting to join the team and drive forward ongoing growth.
Employees expect more from their companies: personalized development, mental health resources, flexible benefits, and quick answers to HR queries. Outsourcing partners now offer solutions that elevate employee experience, from efficient benefits administration to personalized workforce management to wellness programs and AI-powered HR support.
As workforces evolve, so should the approach in managing people. This is why, this year, as we have seen the continuous demand for hybrid workplaces and the growing popularity of AI across industries, HR outsourcing kept up and developed alongside these changes.
Here are just five of the key trends that you need to know about if you are planning to start outsourcing your HR (or improve your current outsourced HR system in place).
Artificial intelligence is transforming HR outsourcing. Providers are using AI to streamline recruitment through intelligent resume screening, reduce bias in hiring, and automate repetitive HR inquiries via chatbots. Predictive analytics also help forecast turnover, training needs, and insight into future workforce gaps. Does this mean you no longer have to hire HR staff? Well, no. What it means is you need an AI-trained HR team to boost efficiency and meet fast-changing market demands.
The regulatory landscape in the US continues to grow more complex. To match this need, HR outsourcing partners are increasingly offering “compliance-as-a-service” through compliance specialists — a proactive approach where businesses receive regular updates, risk assessments, and automated compliance alerts to avoid fines or lawsuits. This way, ongoing updates can smoothly be integrated into workplace policies, so your business is always compliant.
Remote and hybrid work have become the norm for many industries. Almost every corporation now has hybrid workers or fully-remote, global teams. HR outsourcing providers help manage payroll across multiple states, ensure compliance with local tax and labor laws, and provide digital platforms that unify workforce management for geographically dispersed teams.
Companies can no longer afford to ignore employee well-being. Far from being a nice-to-have, it is now a key driver of employee retention rates. As such, outsourcing partners now provide access to wellness programs, counseling, and DEI (diversity, equity, and inclusion) initiatives as part of their HR administration and employee management services. This trend is especially valuable for companies without the in-house capacity to develop such programs.
Lastly, one of the most significant benefits of outsourcing today is access to data. Providers deliver analytics dashboards that give insights into employee performance, engagement, and retention. These insights allow leadership teams to make proactive, data-driven HR decisions that will support talent management, employee relations, and overall business growth.
Yet another ongoing development in HR outsourcing is the ongoing advancement in HR tech. Now, we’ll look into the tech stack that most HR outsourcing companies use to support their clients with modern HR.
The use of technology in HR is nothing new. But with the rise of AI and other developments in the tech space, HR services today are also inclusive of data-driven, automated tools that support HR experts — making the completion of HR tasks more accurate and efficient.
Let’s go through some of the most commonly used tools in HR outsourcing today.
Cloud platforms have become the backbone of HR outsourcing. They centralize payroll, compliance, performance tracking, and benefits management. Providers often integrate these platforms with existing business systems, giving leaders real-time visibility into their workforce. When looking for an outsourcing company to partner with, this is one of the key factors that businesses need to look out for: can their HR management platform seamlessly integrate with your current systems?
Recruitment outsourcing in 2025 is heavily supported by AI tools that assess candidates faster and more accurately. By reducing bias and improving matching, these tools help outsourcing providers deliver stronger hiring results. This way, it’s much easier to find the right team that will support your business as it grows.
Upskilling and reskilling are also among the top priorities in today’s workforce. Outsourcing partners use LMS platforms to provide training tailored to a company’s needs — whether technical skills or leadership development. Outsourced HR providers use these systems to manage employee training, from module development to ongoing implementation.
Payroll outsourcing has evolved into a more comprehensive service, often bundled with benefits administration. Integrated platforms reduce errors, ensure compliance, and create a smoother employee experience with self-service options for pay and benefits. When outsourcing, you can rest assured that your team gets their salaries and benefits in a timely and accurate manner with more efficient HR operations.
We’ve covered the trends, the tools, and the tech that backs HR outsourcing today. But how do these things benefit your business exactly? What could these developments mean for your HR department and your business as a whole?
The changes in the HR outsourcing space that we have covered here stemmed from the actual needs of organizations utilizing the service. As such, with the right framework in place, the right team onboard, and the right outsourcing provider on your side, you can leverage the following HRO’s strategic advantages and fuel business growth.
Outsourcing HR provides cost savings by reducing overhead and giving companies access to advanced tools without investing in them directly.
But in 2025, the focus is also on quality — outsourcing delivers enterprise-level solutions scaled to business needs. It’s about getting value for money through reliable services. After all, we’re talking about a team that will handle your business’ greatest assets here: your people.
Medium to large companies benefit significantly from the flexibility outsourcing provides, as it allows them to quickly and efficiently scale HR functions up or down in response to fluctuating workforce demands.
An HR outsourcing partner can swiftly deploy recruiting, onboarding, and payroll resources, and then just as easily pull them back when needs diminish, which is far more agile and cost-effective than attempting to hire and manage a perpetually changing internal HR staff.
Outsourcing provides immediate access to high-level, specialized HR expertise that most internal teams would find too costly or impractical to maintain full-time, ensuring the company remains both compliant and competitive.
These partners bring deep knowledge in niche and complex areas, such as mastering the complexities of labor laws, developing robust Diversity, Equity, and Inclusion (DEI) initiatives for tech firms, or managing international payroll, effectively allowing companies to access top-tier skills through an outsourced HR expert on an as-needed basis.
Most importantly, it lets you take time and resources back. By offloading the substantial administrative burden of time-consuming HR tasks — including routine payroll processing, benefits administration, and basic employee inquiries — business leaders and internal teams are freed to concentrate their efforts on high-value, strategic activities.
This redirection of organizational focus toward core drivers like innovation, improving customer experience, and developing long-term market strategy is what ultimately fuels sustainable growth and enhances the company's productivity and competitive standing.
HR outsourcing services are driven by tech and data and shaped by the changes in the global workforce itself. These shifts include the dramatic rise of remote and hybrid work models, which necessitate external partners to handle complex compliance and global payroll seamlessly.
Furthermore, the modern employee, particularly Gen Z and Millennials, now demands a focus on holistic well-being, flexible working arrangements, and continuous upskilling, pushing outsourcing providers to become experts in delivering high-touch, hyper-personalized employee experiences and integrating HR software directly into daily workflows to close the persistent skills gap.
Essentially, the new landscape — defined by flexible teams and constant digital transformation — requires outsourced human resources to transition from a function that merely supports the business to one that is a proactive, strategic partner in shaping the company’s future talent and culture.
Moving forward, you can expect this same trend in the HR outsourcing space.
The future of HR outsourcing beyond 2025 is still characterized by its transformation from a simple administrative task to a strategic, technology-driven partnership.
We can expect this shift to be powered by AI-driven HR ecosystems, which will integrate seamlessly into business operations to automate almost all routine HR functions, freeing up human expertise for high-level strategy. This use of advanced analytics will enable providers to deliver hyper-personalized employee experiences, tailoring benefits, learning paths, and career guidance to the unique needs of every individual, thereby significantly boosting engagement and retention while improving employee relations.
Crucially, the outsourced role will expand into workforce planning and strategy, moving beyond mere administration to help organizations forecast future talent needs, identify critical skills gaps, and model complex staffing scenarios.
As the modern workplace becomes increasingly digital, distributed, and dynamic, HR outsourcing will move deeper into the strategic core of organizations, serving as the agile, data-intelligent co-pilot necessary for long-term business success.
By embracing trends such as AI-powered recruitment, employee-focused approaches, and data-driven HR analytics, businesses get the competitive advantage they need to keep up with today’s changing workforce.
If your business is ready for growth and you need to scale your HR support quickly and cost-efficiently while maintaining total compliance assurance, we can support you.
At KDCI Outsourcing, we specialize in building dedicated HR teams tailored to your business’ needs. From payroll and compliance to recruitment, training, and employee engagement, we deliver solutions that let you focus on strategy while we handle the complexities of workforce management. Whether you need support for specific HR functions or a broader outsourcing partnership, we have flexible engagement models that help you scale with confidence.
Let’s talk about how we can support your HR needs. Contact KDCI today.

There are tons of learning resources out there that talk about onshore vs offshore outsourcing. But most of them, if not outdated, pit these two approaches against each other. Not understanding that these two serve different business needs.
IIn this blog article, we will steer clear of discussing which one is better. Instead, we will discuss their key differences for unique business challenges. After reading this blog, you’ll have a clear roadmap to offshore outsourcing or onshoring.
Businesses often select one of two approaches to outsourcing: onshoring or offshoring. Therefore, it's critical to comprehend their primary distinctions. To begin, let us first define the phrases onshore and offshore outsourcing.
Onshore outsourcing is also known as domestic outsourcing. It means outsourcing for external help but within your own country.
For example, if your company is based in the US and you hire a customer support team in the US, then it's onshoring at its finest.
Unlike offshore outsourcing, onshore outsourcing allows for greater control and closer communication between you and your service provider.
In contrast, offshore outsourcing refers to the use of overseas labor. Simply put, it is the process of moving your business processes abroad.
For example, if your firm is based in Canada and you expand your business in a developing country like the Philippines, then that's offshore outsourcing. This approach to outsourcing fits those who want to cut costs.
Knowing the pros and cons of onshore and offshore outsourcing will help you decide which one could work for your business. Here are the comparative aspects to consider regarding whether to onshore or offshore.
When venturing into outsourcing, the first thing that businesses inquire about is cost-effectiveness. So which between onshore and offshore services can help you cut costs?
For many reasons, the labor costs of offshore locations can be much less than onshore locations. Why? Let's look at certain production parameters, such as salaries.
If you are from a country with expensive labor, then you will find offshore outsourcing to be much more cost-effective.
When you offshore, you can take advantage of the lower wage rates in developing countries. For example, companies that hire employees in the Philippines can save up to 15% on their IT expenses.
We hate to break it to you, but onshoring means paying more. If you operate in a country with high tax rates, hiring an onshore company may hurt your bottom line.
Collaborating with an onshore team is much easier than an offshore team. Suppose you want to work with a team that understands your country's business environment. In that case, onshore outsourcing is ideal for you.
Offshoring, while deemed cost-effective, can pose challenges such as cultural differences and language barriers. In addition, when transferring operations abroad, multiple communication issues arise.
Therefore, you should consider cultural compatibility and language proficiency when choosing an offshore team.
If you are from an English-speaking country, you will definitely love the Philippines. Western culture is deeply ingrained in this country. Plus, they have a natural affinity with the English language. You can train them to match your work culture and speak with a specific accent.
Meeting deadlines is as important as the costs. Of course, you want to work with a team that can deliver results at a fast turnaround time.
Because of low direct labor expenses, offshore companies have more flexibility in gathering resources ahead of a project. They also have robust manpower to ensure no deadlines are ever missed.
On the other hand, onshoring companies cannot afford to have idle resources. They must engage and train their staff to carry out new projects. Too often, they fail to adhere to the promised quality and timeliness.
Remember that a slow turnaround time can lead to major bottlenecks. Hence, when it comes to time-sensitive projects, go for the one that can meet your deadlines. Make sure they have a backup plan should they miss a deadline.
When it comes to quality control, it's easy to solve issues with onshore outsourcing. If you want to teach a remote staff to do something specific, it's best to meet in person to grasp what's needed.
But if you are after quality work, offshore outsourcing is your best partner. Offshore companies claim to have qualified professionals who can accomplish the essential task.
Offshore companies allow you to access a global pool of talent. You can take advantage of their domain expertise and experience working with foreign clients. They also have the latest technologies for seamless handling of your business functions.
There's an inherent risk in entrusting your operations to a service provider. Clearly, both onshore and offshore outsourcing present operational risks. But there are ways to reduce or eliminate these risks.
When outsourcing, find a company that has effective risk management plans. Also, select a company with established quality standards and performance indicators. There should also be timelines and benchmarks to ensure you meet your goals.
Moreover, make sure your company's information remains private. There may be times when you must grant your service provider access to intranet sites and other sensitive corporate data. It is in your best interest to sign agreements to preserve the confidentiality of your data.

Now that we have shed light on the debate onshore vs offshore outsourcing, it's time to consider your needs. You may want to talk to us because it's risky to make decisions without advice from experts.
KDCI has been in the offshore staffing industry for more than ten years. We have a wide range of offshore staffing services to help you acquire top talents in your company. Did we mention that we operate in the Philippines—the world's leading outsourcing destination? Yes! We have Filipino employees waiting to work with you.
Click the button below to get your FREE consultation today!

Outsourcing vs offshoring has always been the talk of the town as businesses strive to achieve significant cost savings, innovate their systems, and expand their market share— all while maintaining productivity, efficiency, and high service quality.
However, outsourcing and offshoring are often confused with one another. As a result, many businesses adopt the wrong strategy because they don’t heed the critical differences between these two practices.
That said, we will distill the overwhelming (and confusing) differences between outsourcing and offshoring. At the end of this blog article, you will gain an in-depth understanding of these two business practices. At the same time, you will determine which one is suited for your business needs.
Outsourcing vs offshoring operate differently and thus should not be treated as interchangeable concepts. Let’s learn about them below:
Outsourcing is when a company subcontracts a third party to carry out operational tasks outside the organization. There are many reasons why companies choose to outsource. One of which is to hire specialized talents that are not present in their organization. Some outsource to increase efficiency for time-consuming functions such as customer service and back-office functions.
Companies that have outsourced include Alibaba, founded by Jack Ma in 1999. When there was a scarcity of web developers in China, Jack Ma and his team started outsourcing their web development needs to the US. As a result, they successfully built a sustainable eCommerce infrastructure and became a popular online marketplace.
While outsourcing involves entrusting business processes to an outside party, offshoring, on the other hand, refers to transferring jobs to another country with lower labor costs. In offshoring, companies hire a dedicated remote workforce from another country.
Imagine you have an extension of your company’s locally based staff in an offshore location. If a service provider manages all activities in outsourcing, offshoring allows you to integrate the remote staff into your company entirely.
Therefore, your team will perform specific tasks based on your command. WhatsApp, for example, is among the many companies that have sought the benefits of offshore staffing. As a result, the company offshored its software development to Russia shortly before its inception in 2009.
To sum up, WhatsApp used offshore expertise to provide design solutions and handle core app development, while its in-house engineers focused on client-facing activities like customer support. Consequently, the chat app quickly rose to the top of the App Store and Google Play.
Outsourcing and offshoring are interrelated practices. However, both strategies vary in the way they carry out tasks for external organizations. Outsourcing can be done locally and globally, whereas offshoring can only be done abroad. Hence, when you outsource internationally, it can be referred to as an act of offshoring.
One of the advantages of outsourcing and offshoring is cost savings. Let’s take a look at how these practices result in less overhead for your business:
Outsourcing to another country yields higher cost savings. Outsourcing companies from a developing country provide state-of-the-art services without breaking the bank.
On the other hand, outsourcing domestically entails more expenses — especially labor and overhead. While cost savings are limited with domestic outsourcing, it offers tighter collaboration with your service provider.
If you want long-term cost savings, offshoring is the right strategy for your business. Building a local team means spending around $4,683 USD per hire. With an offshore team, you can cut the cost of hiring by a fraction, as your employees are located in a country with low labor costs and living expenses.
When it comes to work assignments, you want to get things done at a speedy turnaround time. Between outsourcing vs offshoring, which one is the best?
If you prefer a fast and flexible approach to work, outsourcing might be a good choice. In outsourcing, the delegation of tasks is through your service provider. Therefore, you can leave menial functions and focus on your core business operations.
If you choose to outsource tasks and projects that need your attention, you must lean towards offshoring. It may take time to accomplish tasks since it requires communication between you and your remote staff. But the good thing is you have all the control to ensure the work gets done.

Communication and interactions are essential in building long-lasting relationships. Do you prefer little to no interaction, or do you want to integrate your remote staff into your company fully? Either way, check out how outsourcing vs offshoring differ in their approach to communication.
Outsourcing is perfect for business owners who are often busy. Indeed, when juggling many responsibilities, you have no time to supervise and train your staff. That is to say, you want to get things done by handing over these business activities to your third-party provider.
Meanwhile, offshoring is ideal if you want to be fully involved in talent acquisition and integration of your offshore staff. With offshoring, you can explain your company’s culture, objectives, and processes to your team. By doing so, they can perform better and are more likely to stay with your organization.
Quality of work guarantees better profits. In short, which between outsourcing vs offshoring can render the highest quality standards? There’s no doubt that both can promise high-quality standards. However, just like with work assignments, outsourcing and offshoring take a different approach in setting quality standards and expectations.
The quality of work may be unstable in outsourcing because your outsourced workers are not devoted to your organization. In addition, employees handle multiple clients with time-sensitive campaigns in outsourcing companies. Thus, your tasks may often get put aside.
With offshoring, you have the authority to impose work quality requirements on your staff. Your team is expected to focus solely on the job you assign them because they are devoted to working on your company’s duties — not for other clients. This will ensure that they will consistently deliver high-quality work.

Sometimes, your business may not be ready for the peak season.
This fact begs the question, “Which can help me scale up my business with an already-trained staff that can handle the increased volume of my business?”
When the job flow during a seasonal peak is unclear, outsourcing could be of great help. For instance, a contact center can provide you with customer support agents equipped to take incoming calls and acquire the information needed from customers. When the busiest season ends, it’s just as easy to scale back to a smaller set of agents.
While outsourcing scales up your resources during peak seasons, offshoring can help you expand based on your needs. Offshoring allows you to begin with a small or a big team. Then, as your company grows, you may extend the team by adding more jobs as needed. Since you take charge of the hiring process, it is considered a longer-term strategy.
Yes! Onshore outsourcing is a model in which tasks are delegated to a domestic service provider. Smooth collaboration, cultural compatibility, and time zone alignment are the advantages of onshoring. But because onshore outsourcing is concentrated domestically, labor expenses are going to be higher.
Mitratech found that third-party-induced data breaches are the most concerning issue for the majority of surveyed companies (74%).
Not to worry, though, because the best service providers take data security seriously. These companies have advanced IT infrastructure and cybersecurity capabilities that can protect your data from online threats, including data breaches.
There’s no strategy that’s better than the other. Choosing between outsourcing vs offshoring should be based on your business needs.
Want a dedicated overseas offshore team that you can build a long-term professional relationship with? Choose offshoring. Want to offload non-core business activities? Choose outsourcing.
Weigh the pros and cons of both practices, so you can make an informed decision and reap the benefits of your chosen strategy.
Building a high-performing team with specialized skills requires a lot of work. Hence, you may need offshore staffing to take the load off your shoulders. Offshore staffing can help you tap into global talent while keeping overhead expenses at bay.
Here at KDCI Outsourcing, we have offshoring specialists who can support your existing in-house team. From finance and accounting to digital marketing, we can build dedicated teams for any business function.
With our custom offshoring solutions, we can free up your internal resources, boost your operational efficiency, streamline your business operations, and increase your profits.
Need help with overcoming workflow inefficiencies and business challenges? Let KDCI Outsourcing do the heavy lifting. Contact us today!
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It’s not just the workload that’s killing your human resources (HR) department, but also inefficiencies brought by manual processes and poor technology integration. According to Deloitte’s Modernizing HR: Design Thinking and New Technologies to Help Enhance Employee Experience, cited by Deel, administrative tasks consume 57% of HR employees’ time.
As a business owner and employer, this is deeply concerning. The time spent on mundane administrative tasks (like benefits administration, payroll, and performance evaluation) can be used for high-value HR initiatives and business needs. Fortunately, many of these administrative tasks can be automated. But to do so, you need the best human resource outsourcing solutions.
Human resource outsourcing solutions are every HR professional’s best friend. These technologies transform your HR department into an efficient powerhouse that enhances the HR and employee experience.
This article walks you through the definition of HR outsourcing solutions, followed by a round-up of the best human resource outsourcing solutions. We also included a guide on choosing an HR outsourcing software solution for your business. Without further ado, let’s begin.
Human resource outsourcing solutions are software and platforms that optimize HR services for speed, efficiency, and compliance. These programs enable smoother HR and employee management through cloud technology, automation and AI-powered tools, data analytics, and app integration, allowing in-house HR professionals to focus on core HR needs.
Human resources outsourcing companies provide these software solutions to help clients gain access to cutting-edge HR platforms without the upfront cost of new technologies and software upgrades.
The best human resource outsourcing solutions promise long-term competitive advantage. Check out our round-up of the best HR software solutions below:
Developed in the Philippines, Sprout HR is one of the top human resource outsourcing solutions designed to streamline HR services for all workers.
Boasting end-to-end HR solutions, this award-winning HR software promises comprehensive, AI-powered support for every HR need — whether it’s candidate sourcing or professional development. Sprout HR is ideal for companies looking to modernize their HR services with an all-around platform.
With its Pulse tool and Wellness program, HR professionals can gather employee feedback and help employees prioritize their physical and mental health, respectively.
ADP Workforce is an industry-standard platform used by KDCI Outsourcing to support a wide variety of HR needs, including HR reporting, payroll, talent acquisition, and workforce management.
Designed for companies of different sizes, including medium- and large-sized businesses, this technology provides owners of medium- and large-sized companies the efficiency and flexibility they need to manage and improve workforce performance across all departments.
Pros:
BambooHR is a highly praised HR software solution that seamlessly integrates all HR services into one user-friendly platform, promising a 65% efficiency boost and saving HR professionals 18 hours on HR tasks weekly.
Ideal for differently sized companies, this software solution scales and meets your HR needs as your business grows.
Pros:
Greenhouse is an innovative hiring platform that delivers high returns on your recruitment and hiring efforts, averaging a 589% ROI within three years. With features that minimize hiring biases, this platform is ideal for companies wanting to spearhead or enhance their DEI (Diversity, Equity, and Inclusivity) efforts.
Having consistently won awards such as the “Best Software for Enterprise,” Greenhouse stands as a highly expertised leader in the recruitment field.
Pros:
Workday is a cutting-edge HR software solution that harnesses AI to future-proof your HR department against industry changes.
Trusted by thousands of Fortune 50 and 500 companies, Workday stands as a reliable platform for driving enterprise-level innovation, boosting operational efficiency, and elevating your workforce.
Cons:
SAP SuccessFactors is a software solution aimed at companies with a global workforce. Packed with cutting-edge features, it elevates the mundanity of HR services into a more cohesive, technology-driven experience for all employees.
Based in the Cloud, Zoho People is an HR platform designed for businesses that use Zoho and non-Zoho applications. Delivering agility, efficiency, and innovation, this award-winning software offers a comprehensive suite of features and tools that streamline your HR department’s daily workflow.
Your choice of human resource outsourcing solution can either supercharge your HR department or result in a costly mistake. Here are three tips for choosing the right one for your business.
According to human resource employees, professionals, and leaders (43%), HR technology is effective. However, the best human resource outsourcing solutions won’t benefit you if you don’t know your HR needs. To identify those HR challenges and needs, start by gathering feedback from your HR staff.
HR professionals have first-hand experience with workflow inefficiencies and challenges. Hence, they can provide detailed insights into which functions require the most attention. From there, you can establish goals that meet both your HR and organizational needs.
There are plenty of HR technologies available on the market today. Don’t settle on the first HR software you see. Do thorough research on each software’s features, scalability, AI capabilities, user-friendliness, complexity, data security, and cost.
Check detailed user reviews, or even better, request a demo or take advantage of free trials to get a feel of the software. Most HR solutions entail overcoming a learning curve, so maximize your time with it before making a decision.
An HR outsourcing provider is equipped with the best human resource outsourcing solutions. Despite that, look for BPO companies that have software expertise in your preferred HR solution. For example, if you prefer BambooHR, you can outsource HR services to KDCI Outsourcing as the company has employees who are trained and proficient with said platform.
Though cheaper, always remember that the cost of outsourcing in the Philippines (or elsewhere) may include start-up fees and software upgrade expenses.
The best human resource outsourcing solutions address your specific needs. If you hate the idea of investing in the wrong HR technology, it’s time to partner with outsourcing companies that understand your technology and HR challenges.
At KDCI Outsourcing, we have the best human resource outsourcing solutions that deliver not just speed and efficiency, but also enhanced workforce performance, employee engagement, and competitive advantage. From ADP Workforce Now to Greenhouse, we have HR professionals who excel in your software solution.
As your HR outsourcing service partner, we will do everything in our power to level up your HR department with high-performing offshore HR talent and advanced software.
Experience our AI-powered HR outsourcing services today. Contact us for proposals, inquiries, or price quotes!

So, you’re considering outsourcing HR services? Good choice! It’s a choice nearly half of businesses worldwide have made as 42% of companies have already outsourced at least one HR function, and for good reason.
With a reported ROI of 191% and a number of other significant business advantages, it’s no wonder more and more businesses are now opting for an outsourced HR department (or at least parts of it through outsourced payroll processing, talent management, and employee engagement among others).
As in every business decision, it’s understandable if the whole idea may seem overwhelming at first. That’s just how it is when a business owner or manager is looking at things that will largely impact the company they’ve put a lot of time and effort into. Since there are a lot of things to consider when working with an HR outsourcing provider, it’s natural to feel like you’re not sure how to start.
But you’re here. You’re in the right place. You’ve already gotten the business to a point where the need to scale is imminent because your team is growing — now it’s time to support that growth with the right HR team (and cost-effectively at that).
In this blog, we’ll walk you through the process of outsourcing HR services to the Philippines, breaking it down into a clear, actionable 5-step guide that you can follow as you build an offshore team to empower your team with dependable human resource management.
Read on to learn more.
Human Resources (HR) services pertain to any type of support in human resource management provided by a third party. The objective is to help organizations enhance their human resource management, such as by enhancing operational efficiency, improving compliance with regulations, boosting employee satisfaction and retention, and more.
Since there are a lot of functions that HR teams have to handle including, but not limited to payroll processing, benefits administration, monitoring of staff productivity, minimizing employee turnover rates, and maintaining overall company culture, having a good human resource management is key to the success of any organization. It ensures that companies have great talent, that employees are engaged and performing, and that the company is a great place to work overall.
However, not all organizations have the resources to staff their own in-house human resources team, hence more companies are choosing to outsource HR services.
<br>The growing popularity of HR outsourcing services or human resource outsourcing (HRO) is reflected in the size of the global human resource outsourcing market, which was sized at $18.65 billion in 2023, estimated to be $19.97 billion in 2024. And with a 7.59% annual growth, the market size is expected to reach $31.14 billion in 2030. In short, it’s a fast-growing multi-billion dollar industry geared towards empowering businesses as employment trends shift and HR responsibilities evolve alongside them.
Not only is human resource outsourcing a great option for those looking to optimize resources, it’s also a great way to unburden one’s inhouse team. Running human resource operations effectively requires expertise in several areas such as compliance and risk management, compensation and benefits, health and safety, and more. Sourcing these expertise and delegating various HR administrative tasks can be challenging. And with the added burden of needing to scale operations, companies choose to outsource their human resource functions rather than operate it in-house.
With so many HR outsourcing companies globally, the Philippines is emerging as one of the leading destinations mainly for its lower labor costs, excellent English, cultural compatibility, and excellent track record in the business process outsourcing (BPO) industry.
When people think of the Philippines, the first thing that comes to mind is cost savings. This is because the Philippines is a developing country with a lower cost of living, hence lower labor costs. To illustrate, the average hourly wage of an HR specialist in the United States in 2024 is $36, meanwhile, it costs ₱144 (approx. $2.46) per hour in the Philippines. Such cost-effective rates make outsourcing HR services ideal for businesses of all sizes: be that a small business looking for payroll processing support or a multinational organization that needs to hire global HR staff.
With such a huge difference, even with the additional costs that come with management, resources, and benefits, the overall cost to outsource HR services to the Philippines is still around 70% lower than hiring a full-time staff onshore in the United States. This appeals to many global companies attracting them to outsource to HR outsourcing companies in the Philippines.
When it comes to outsourcing, smooth collaboration is key to success and even more so in HR outsourcing where you’ll have an offshore team handling HR tasks that mostly involve communicating with staff. And Filipinos are known for their excellent English communication skills, what with the country ranking 2nd in English proficiency across all of Asia and English being used as the primary language in Philippine education. These result in the majority of Filipinos speaking excellent English, making the Philippines particularly attractive as an outsourcing destination to native English speaking countries, like the United States, UK, and Australia, contributing to the high demand for HR outsourcing in the Philippines.
Besides communicating well in English, Filipinos are also culturally similar to developed nations, particularly, the United States. This is because they were a United States colony for 48 years, and because they consume so much American pop culture. For this reason, Filipinos have an easier time understanding nuances in North American culture (as well as technical requirements such as regulatory compliance and employment law), aiding communication and resulting in better collaboration. Such compatibility is especially helpful in HR responsibilities since people-related tasks, as well as the overall company culture, are on the line.
The history of Philippine business process outsourcing (BPO) industry dates as far back as the 1990s. This puts the Philippines ahead of many other nations in the outsourcing market. With decades of head start, the Philippines has built a strong reputation as a reliable outsourcing market with reliable tech infrastructure, government incentives, and over 800 BPO companies. This gives many global companies the confidence to work with Philippine BPO agencies, trusting their expertise and experience for high quality HR services. This also means that you’ll be entrusting your HR tasks to a fully-trained team backed by well-developed outsourcing infrastructure and strong government support.
With all these benefits considered, there really is no doubt that choosing an HR outsourcing service provider from the Philippines is the best move for businesses looking to scale with more efficient task delegation and cost-effective HR solutions.
If you’ve never outsourced before, you may be unsure as to how you can start outsourcing human resource services to the Philippines. We’ve broken down the steps to outsource HR services to the Philippines in 5 easy steps below! We also created a separate guide on the best practices for outsourcing human resources.
Before starting any business venture, such as outsourcing, first evaluate your current operations and determine your HR needs. Are you finding it difficult to find staff for your HR positions? Does the volume of HR work not justify hiring staff full time? Do you expect fluctuations in your HR operations that would require you to scale quickly? The key here is strategic planning tailored to your business’ actual needs — this will benefit your outsourcing partnership in the long run.
After clarifying your needs, consider the benefits of outsourcing your HR functions to the Philippines. With the geographic distance, collaboration will be done virtually. Will you be able to operate without HR staff on-site? How about cultural and language compatibility? While Filipinos have built a reputation for working well with Western brands, there are still brands that require a local HR manager and other HR staff. Will this be an issue for you?
Finalize and keep all these in mind as it will be crucial throughout the journey of finding an HR outsourcing provider.
Once you’re certain that outsourcing to the Philippines is the right business strategy for your HR operations, the next step is to identify which HR roles you need to outsource. The most commonly outsourced ones include general HR, compensation and benefits, payroll, training and development, and recruitment. There are also businesses that opt to outsource their entire HR department from the Philippines to address all of their HR needs.
Then, Determine how many of each HR role you need, and of which seniority. Are there particular skills you require for these employees and specialists? Will they need to know how to use proprietary tools like Workday, Bamboo HR, and Zenefits? Or do you need an end-to-end, holistic HR outsourcing service with a team that can handle all HR tasks mentioned above? Be clear on these as you’ll use these this information when shortlisting the BPO companies you want to work with.
With clear roles to outsource and skills required, it’s time to choose a BPO company that specializes in HR services in the Philippines. The easiest way is to start with the top HR companies in the Philippines, then select based on your unique needs.
Assess the outsourcing companies based on their expertise, track record, contract type, timeline, and costs. And while it’s not a technical requirement, checking the company culture of the provider is also important in finding the right match when it comes to outsourcing.
It’s best to work with an HR outsourcing company that has provided outsourced HR services to companies similar to yours in terms of size, industry, and geographic location. This reduces the learning curve, easing transition and minimizing operational disruptions.
You also want to consider the contract type when choosing a company to work with. You may need full-time offshore staff for long-term or you may need them to fullfill one off projects only. Depending on the outsourcing arrangement you need, the length of contract or terms, and the costs will determine the best company to work with.
A quick way to assess these is to meet with these companies and discuss how they may meet your requirements, and on what costs and terms. If you need assistance or guidance with this assessment, you may set up a quick consult here.
Once you’ve decided to work with an outsourcing partner, it’s time to discuss the terms and conditions of the human resources outsourcing services they provide. Though these should have already been brought up during initial discussions when choosing your outsourcing partner, you should discuss these more thoroughly within the context of a working partnership with your chosen BPO company.
Some of the things you want to pay close attention to include scope of service, service level agreements (SLAs), key performance indicators (KPIs), confidentiality and data protection, compliance with local and international laws, contract duration and renewal terms, termination clauses, dispute resolution mechanism, responsibilities and liabilities, quality assurance (QA) measures, communication protocols, HR technology & software, and change management process.
Once you’ve signed the contract, your partner BPO company will be recruiting, hiring, vetting, and training your offshore HR team to ensure they meet your requirements. Once this is done, they’ll be onboarded, equipped with tools to fulfill your tasks, as well as taught your process and given access to your systems to help them integrate into your operations.
With your offshore HR team onboarded, it’s time to work with them, with your outsourcing partner managing your offshore team on your behalf to ensure quality of work, and that their efforts align with your business objectives. From there, it will be an ongoing process of continuously growing with an offshore team that effectively serves as an extension of your existing in-house one. Your HR outsourcing partner will provide the assistance you need throughout the process.
We’ve covered the complete journey of outsourcing HR services to the Philippines, a five-step, proven strategy adopted by major global businesses.
By following these five steps, you can empower your team with an HR team that can truly support your business with where you are right now (and towards the direction you’re headed in the future).
It’s time to take the first step and transform your HR function into a strategic asset for business growth — are you ready?
Outsourcing HR services to the Philippines for the best results shouldn’t be difficult.
With clear goals, the right outsourcing partner, and great collaboration and communication, you can expect great results!
At KDCI Outsourcing, we’ve supported several brands, from SMEs and startups to multinationals, with their human resource functions. With over a decade in the industry, we’ve built a strong reputation for building the best offshore teams in the Philippines. We don’t just find people with the experience and skills you need, we look for people who mesh well with your team, making it so that your outsourced team feels inhouse, helping you achieve your business goals.
Learn more about HR outsourcing in the Philippines. Contact us today!
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Every business needs human resources (HR) — from recruitment to payroll to employee engagement, that’s a long-established business fact. HR services often come at a significant cost, yet another business fact.
But should that always be the case?
Yes, as companies grow, HR responsibilities scale quickly, and with that comes rising costs. For medium to large businesses in the US, maintaining a full in-house HR team can easily become one of the biggest overhead expenses.
That’s why more organizations are turning to HR outsourcing (HRO) to the Philippines as a smarter, more cost-efficient solution.
Truth is, the answer is quite nuanced. HR outsourcing costs vary depending on the provider, scope of services, company size, and even the country where the outsourced team is based. Still, by looking at industry benchmarks, we can provide realistic estimates that business leaders can use to guide strategic decisions.
In this blog, we’ll break down:
By the end, you’ll have a clear picture of the investment required as well as why HR outsourcing could be one of the smartest financial and strategic moves that you can make for your growing company today.
Ready? Let’s get started.
While the default used to be having a full in-house HR department, more and more businesses are now opting to work with an external provider, typically those located in the Philippines. For medium to large businesses that are looking to scale their operations, this is a far more sustainable option — a strategic HR initiative that empowers the team with experienced HR, sans the excessive overhead costs.
Before we delve into the actual cost of outsourcing HR, it helps to understand why several US companies opt to work with HR outsourcing providers in the Philippines. Here are just some of the key reasons:
As most businesses already know, the costs of outsourcing to the Philippines are significantly lower compared to hiring inshore. The same thing applies to outsourcing HR services. Here’s how that looks: while hiring a skilled HR specialist in the US might cost around $3,900 per month, a comparable, highly capable professional outsourced to the Philippines could run approximately $1,500 per month (inclusive of office space, utilities, and equipment). That translates to around 70% in cost-savings for your business.
English is an official language in the Philippines (adopted from Americans), and it is widely used in education and business, ensuring that communication barriers are minimal. This high level of fluency minimizes friction and reduces the chances of miscommunication on complex HR matters like benefits administration, policy explanation, or internal coordination. Furthermore, the strong historical and cultural ties between the two nations mean that Filipino professionals are generally familiar with US business norms.
The Philippines maturity in the BPO industry as a whole translates to a ready supply of specialized HR service providers — from large global BPO firms to smaller, niche specialists — who operate with established, international-standard processes. This environment is supported by mature payroll platforms, rigorous compliance firms, and reliable technology infrastructure, giving US companies confidence that their sensitive HR data are handled professionally.
When working with an HR outsourcing company from the Philippines, a business can rapidly scale its HR team up to handle peak seasons and then scale down just as quickly during slower periods. This ability to adjust capacity efficiently is crucial for operational health. By using outsourced HR services, companies avoid the significant financial and administrative burden associated with hiring and firing costs, including the complex process of recruitment, onboarding, and potential legal issues related to workforce reduction.
While the time difference between the US and the Philippines is substantial (often 12 to 15 hours), this gap can be strategically leveraged. The Philippine team can work in the US evening and night shifts, handling HR administrative tasks, processing payroll, updating employee records, or managing support requests while the main office is closed. This effectively extends a company’s coverage to nearly 24 hours a day.
With all these benefits and advantages considered, working with an HR outsourcing service provider from the Philippines is a clear strategic move for agile and growing US companies looking for both reduced costs and increased operational efficiency.
There are several distinct engagement models of HR outsourcing that define the scope of services, the degree of shared responsibility, and the legal relationship between the client and the HR outsourcing service provider.
Choosing the correct framework is the first critical step in a successful outsourcing partnership, as the model determines whether a company offloads all administrative tasks, shares co-employment responsibilities, or simply outsources one highly specialized function. If you’re looking to outsource your HR, there is generally four options to choose from:
Full-service HRO is a comprehensive model where a company outsources most HR functions — payroll processing and payroll taxes, compliance, recruitment, etc. It’s best for companies that need to offload administrative burden while retaining full control over their dedicated offshore HR team, making it a frequent choice for establishing a team in the Philippines.
The PEO model uses co-employment, where the PEO shares legal employer responsibilities, handling taxes and group benefits. It is primarily used by smaller companies that want access to enterprise-level benefits and specialized compliance expertise they couldn’t otherwise afford on their own.
RPO is focused exclusively on talent acquisition (recruitment). This model is ideal for companies that need to scale quickly or face high-volume hiring needs, leveraging the specialized RPO provider’s dedicated recruiting infrastructure to rapidly fill roles.
This offers the most flexibility, allowing a company to outsource only specific functions like payroll, training, or compliance, or even HR consultancy services. This model is mostly used by small businesses or medium-sized companies to gain specialized expertise or administrative relief in targeted areas while customizing the monthly or annual fee and retaining control over other functions.
Ultimately, the choice of an outsourcing engagement model — whether comprehensive like HRO, co-shared like PEO, or highly targeted like RPO or Specialized Outsourcing — depends entirely on a company’s strategic goals, current HR pain points, and desire for control. With the model selected, the next step is to drill down into the specifics of the partnership.
Now that the engagement models are clear, let’s briefly discuss the specific services that you can get through an outsourcing provider. While outsourcing the entire HR department is a popular choice, outsourcing specific HR services or functions (depending on your business’ needs) is also an option.
To guide you, here are some of the most commonly outsourced HR roles and functions:
As you can see, your business has the flexibility to choose an engagement model and the specific services that perfectly aligns with your operational needs; whether you need a full-service partnership or a specialized, task-based support.
Back to the main point: the ultimate purpose of this strategic delegation of HR administrative tasks is to achieve dramatic financial efficiency. Therefore, the next logical step in any outsourcing decision is to move beyond function and focus squarely on the bottom line. Let's analyze the expected cost reductions by exploring the actual costs of outsourcing HR staff.
As we go through the numbers, keep in mind that these are general estimates from the available data on HR outsourcing. If you want to get a bespoke quote that matches your exact HR needs, feel free to talk to our team at KDCI Outsourcing about your HR needs.
In the meantime, let’s do a focused, ballpark HR cost comparison to establish the true financial advantage of offshore HR staffing. To contextualize how much a company can save through outsourcing services, we’ll first outline how much it typically costs to hire an HR expert locally, in the US.
To accurately frame the savings, we first benchmark the full cost of comparable domestic talent: a mid-level HR Specialist or Generalist in the US typically commands an annual base salary in the range of $70,000 to $100,000+.
When including the additional costs — mandatory employee benefits, health insurance, paid leaves, and retirement contributions — the employer’s (your business) total cost is significantly higher. For private industry workers, total benefit costs average approximately 42% of the base wage, giving you a total of around $98,000 to $150,000 annually per HR staff.
Now, consider the investment required to staff the same HR functions through a Philippine-based HR outsourcing provider:
The full cost per HR staff member in the Philippines (including salary, government-mandated benefits, and the provider’s operational & management margin) generally falls in the range of $1,200 to $5,000 per person per month — depending on the outsourcing provider, the skill level of the staff, and the level of engagement among other factors (which we’ll also discuss later).
Even if you get HR services at the higher end of the range, the HR outsourcing cost total would only be around $60,000 annually per HR staff. As such, by moving the equivalent of these HR functions offshore, your company has the potential to reduce its operational spend on a per-person basis, resulting in a cost reduction of up to 80% compared to having an in-house HR staff.
Again, this is merely a generalized starting point. The final, actual cost will be defined by the specific HR services you prioritize, the complexity of your requirements, and the pricing structure of your chosen outsourcing partner.
Having established the significant financial advantage of leveraging offshore HR talent and detailed the cost benchmarks for specific outsourced functions, the critical next step is to understand how those costs are actually structured and billed.
Here are the factors that will push costs up or down:
The cost is driven by the number and complexity of functions outsourced. Generally speaking, a single, transactional service (say, payroll services only) is the lowest in terms of cost. The price escalates significantly for a full-scope model, which bundles strategic functions like recruitment, advanced compliance, and technology. The more services you bundle, the higher the fixed flat fee or per-employee fee.
Higher legal and operational complexity directly increases the price. Costs rise when the outsourced team must support intricate financial and legal scenarios, such as managing multi-state US payrolls, processing complex variable compensation plans, or ensuring compliance with specialized labor laws. This complexity requires the HR outsourcing providers to dedicate higher-skilled, more expensive resources.
Pro-tip: outsourcing providers typically reward volume. Small engagements (1 to 4 staff) often incur a higher per-employee-per-month (PEPM) rate due to fixed overhead costs. However, once a company scales to 5 or more dedicated HR staff, it starts qualifying for tiered pricing, volume discounts, and bundled administrative rates, which effectively drive the per-person cost downward.
The market standing of the HR outsourcing company and technological infrastructure directly influence their fee structure. Top-tier, global HR outsourcing companies command a premium for their minimized risk profile, robust technology, and comprehensive global compliance. Smaller, boutique providers offer lower pricing but typically present tradeoffs in technology, service redundancy, or global compliance breadth.
The inclusion of advanced technological capabilities introduces recurring supplementary costs. The fees for the utilization, licensing, and management of advanced systems — such as comprehensive HRIS, ATS, reporting dashboards, and workforce automation — are typically passed on to the client using the HR outsourcing services as an additional subscription or technology fee, layered over the base labor cost.
When offshoring to the Philippines, the total operational cost must legally and financially account for fixed local employment requirements. The fully loaded cost includes mandatory employer contributions to the state-run social insurance (SSS), national health insurance (PhilHealth), housing fund (Pag-IBIG), and the government-mandated 13th-month pay. These government-set employee benefits must be calculated and included by the provider in the total monthly investment figure.
These factors, then, would constitute the total costs you have to pay for when outsourcing HR staff. Remember: a good outsourcing provider will discuss all these costs with you upfront so you’re not surprised by hidden fees when the invoices come along.
While we’re on the subject of invoices, let’s talk about how businesses actually pay for outsourced HR services when working with an external provider.
When you partner with an HR outsourcing provider, the costs are delivered through one of several structural pricing models designed to align the provider’s fee with your risk appetite, management style, and scale.
This is the most common pricing model, especially for Employer of Record (EOR) services. The client pays a fixed, recurring service charge for each employee. EOR provider fees typically range from $190 to $900 per employee per month. It offers clear, predictable budgeting for rapidly scaling teams.
In this option, the client pays a single, set monthly retainer or flat fee for a defined scope of service, regardless of minor headcount changes. This is preferred for budget stability, with full-service retainers often ranging from $1,000 to $5,000 per month.
This model is less common for full-scope EOR services in the Philippines but is sometimes used by PEOs and BPO firms for administrative functions. Under the Percentage of Payroll structure, the provider charges a fee that is a defined percentage (typically 2% to 8%) of the total gross payroll they manage for the client.
For non-recurring tasks that fall outside the standard scope, providers will switch to a Project or Hourly Rate basis. This model is used for one-off advisory services such as a legal compliance audit, custom policy design, or specialized consulting. The client pays for the actual time spent and materials used, with hourly rates for general HR support.
Most large engagements use a hybrid pricing model, combining a core PEPM base rate with variable add-ons for specialized services. Crucially, volume discounts are applied as the client scales their headcount, making it the most common and cost-effective structure for a growing offshore team
The pricing model will be decided based on the services you need and the engagement model you prefer. At the end of the day, it’s still about finding the exact HR solution that matches your business’ specific goals — and the framework that will help you achieve them.
Now, we answer the most important question:
The short answer is yes. After all, that’s what the numbers are suggesting.
The biggest, most obvious win, of course, is the cost advantage. We’ve established that labor and operational costs for HR talent in the Philippines are significantly lower than in the U.S., translating to savings of up to 80% per HR staff. This allows you to scale up your support team without completely blowing your budget. That’s an ROI that one can see almost immediately.
However, the longer-term value of HR outsourcing is about empowering your internal team. Think about all the time your current high-cost managers spend on transactional, time-consuming HR administrative tasks like processing payroll, administering benefits, and handling routine compliance paperwork. By delegating this tedious work to a specialized, cost-effective team overseas, your HR leaders are freed up to focus on the things that actually drive your business such as talent retention, cultural development, and strategic planning.
At the end of the day, outsourcing makes the difference between HR being a costly administrative necessity and a strategic tool for growth. And the way we see it is this: any investment towards business growth is always worth it.
You now know the numbers: you can save up to 80% by outsourcing your HR function.
If your business is ready for growth and you need to scale your HR support quickly and cost-efficiently while maintaining total compliance assurance, the question isn’t if you should outsource — it’s who you should partner with.
At KDCI Outsourcing, we specialize in building dedicated HR teams tailored to your business’ needs. From payroll and compliance to recruitment, training, and employee engagement, we deliver solutions that let you focus on strategy while we handle the complexities of workforce management. Whether you need support for specific HR functions or a broader outsourcing partnership, we have flexible engagement models that help you scale with confidence.
Let’s talk about how we can support your HR needs. Contact KDCI today.

Over the years, remote work has seen a steady rise around the world. From giving employees the flexibility to work beyond the four corners of the office to enjoying a healthier work-life balance, the perks of remote work outweigh the cons (and even the pros of on-site work).
With the demand for remote jobs across industries, companies must recalibrate their hiring strategies and processes to suit this work arrangement. Employers must assess not only a candidate’s credentials and qualifications, but also their intercultural skills, ability to work with minimal supervision, and even their computer’s technical specifications.
While employing new hires for remote work comes with unique challenges, we created this guide to assist you with the remote employee process.
Before anything else, let's look at some stats.
Since the pandemic, this setup has been seeing an upward trend. Globally, only 20% of professionals were in a remote work arrangement in 2020. However, by 2023 and 2025, this percentage rose to 28% and 48%, respectively.
And based on Upwork's Future Workforce Report, this trend shows no signs of stopping. By 2028, 73% of all teams will have remote workers. Predictions made by the World Economic Forum also revealed that there will be an estimated 92 million global remote digital jobs by 2030.
Buffer's survey also shows that remote work is becoming the new normal. 98% of respondents said they prefer a remote work setup throughout their careers, even from time to time. These figures show that remote work is here to stay. You'll have little to no regrets in choosing a working setup that won't die out anytime soon. Most of all, it will benefit you, your business, and your future team.
Every business owner knows it's critical to hire the right people. Your team will be crucial in helping you grow your medium- or large-sized business. However, screening candidates for a remote team comes with challenges:
Don't worry, though. We'll share a simple screening process below as well as an alternative solution in the next few sections.
The goal of screening applicants is to find the best candidates suited to work in a remote environment. Aside from embodying the right experiences, skills, and qualities, they must also be comfortable in your work setup.

To help you get started, here are five steps you can follow to hire the right team members for any remote job role.
Diving right into a global talent pool without a comprehensive job description is asking for tons of work. Before posting anything online about the job role, make sure you know everything you need to find in a job applicant. Here's a checklist of some essential information to include in a job description for a remote role:
Aside from these items, you also need to cover the general information in job descriptions. It includes:
Check out this example of company benefits found in all our job listings:

With these items, when a job seeker sees your job description, they can do a self-evaluation first before sending their application.
Pro Tip: Ask for a cover letter!
It would show you how an individual communicates in written form, which you'll soon see is a crucial skill in a remote setting.
After going through the applications you received, conducting initial interviews is the next step. It's where you assess your job applicants if they are culturally compatible in your company. Plus, here's your chance to ask them about the information they stated in their resume.
On top of the typical interview questions like "Tell me about yourself" and "What are your strengths and weaknesses," you can also ask them about their capabilities to work in a remote environment, such as:
An initial interview for a remote role is usually done via email or audio call. With email, you can see if your applicants can write coherently and respond in a timely way. On the other hand, an audio call would allow you to assess their verbal ability and listen if they can coherently speak out their ideas.
Either way, an initial interview is usually short. But with the right questions, you can further filter your job candidates and take them to the third step.
Job seekers tend to falsify or exaggerate the contents of their resume. According to the Job Search Trends Report by FlexJobs, 33% of participants in the United States revealed that they were dishonest in their cover letter or resume.
To avoid falling victim to exaggerations or false claims, you can assess your job candidates' skills with online tests and test projects. You can instruct your potential employees to take online tests that assess their soft skills, such as self-motivation, self-confidence, and communication — which are the competencies necessary to thrive in a remote work setup.
MindTools has a free index of self-tests that you can use. Another way to assess soft skills is by reviewing a job candidate's cover letter. You can see how a job candidate writes, which can be a reliable indicator of their communication skills. Plus, a cover letter can also show you how well they know your business and the role they want to fill.
For hard skills, you can give your applicants a test project. Since it's close to the real-world scenario of a remote setup, it can indicate how they would perform as part of your remote team. When you do this, make sure they have a deadline relevant to the job role's day-to-day tasks.
And since you're looking for an independent employee, you'd want to give them space unless they ask you questions. Remember, for both hard and soft skills tests, you'll need to have a benchmark to determine easily which among the candidates have met your standards.
When you're hiring remotely, the closest thing you can have to a personal interaction is a video interview. It helps you build a fuller picture of a candidate. Even with your screens getting in the way, a video interview allows you to check their body language. Whenever an applicant answers your question, you can see from their facial expressions if they're honest and genuine.
Plus, you can see how they work under pressure, considering the stress that applicants usually experience in this part of the screening process. Moreover, it's your opportunity to ask them questions more relevant to the position.
Compared to the initial interview, a video interview lets you dive into the job role's nitty-gritty. Aside from that, here's another chance to ask more questions relevant to the remote work setup:
At first, doing a background check sounds like cyber-stalking. However, we live in the digital era, where most people regularly update their feeds and timelines. With that said, you can't just ignore your potential employee's social presence. Their activities on their social media accounts are a hint of their behavior outside work.
Their LinkedIn account has more valuable information about work; it usually contains their past work experiences. But aside from that, you can also see their references, to whom you can reach out should you need to confirm details on their resume.
On top of that, you can also read recommendations about them. This section on LinkedIn allows you to see what their colleagues think of them, which can give you further insights into your candidate.
On the other hand, Twitter, Facebook, and Instagram can become your sources of more candid activities. In these sites, individuals usually hold no filter and post whatever they want. These can pave the way for you to assess their behavior and personality and determine how they would fit your work culture. After this step, you're a job offer away from hiring your first remote employees.
The nature of the test project depends on the role. If it’s for a content writing or copywriting role, then a grammar and article writing test would be good. Likewise, a graphic design role could benefit from test tasks that involve creating a logo or visual social media content.
Test tasks, however, should closely mimic your company’s usual real-world tasks, so the new hires have a sneak peek of the type of work they’ll perform on the job.
To assess culture fit, ask behavioral questions. These questions are designed to probe deep into a candidate’s communication style and their ability to adapt to new systems, approach disagreement, respond to constructive criticism, and maintain productivity.
Detailed, authentic answers that align with your company values and expectations indicate that a candidate may be a good culture fit for your organization.
Here are tell-tale signs of a scammer or fraudster:
To protect yourself from scammers, conduct intensive background checks, require video interviews, and make the candidate complete a test project.
Yes! BPO companies have access to a large pool of talent. These companies also have expert recruiters who thoroughly vet new hires, making sure that all onboarded employees can perform their job responsibilities with integrity.
Some BPO firms even allow their clients to participate in the remote employee screening process, so they can work with the best team members.
As an owner of a medium- or large-sized company, it can be hard to keep track of everything, from human resources to operations.
Now, here's the alternative solution: offshore outsourcing.
Working with the best offshore outsourcing companies, such as KDCI Outsourcing, can help you build the right offshore team. With our customized offshore strategy and streamlined hiring process, you can count on us to match you with top Filipino remote workers for any of the following departments:
Thus, we can guarantee that you'll only get the best team suited to your remote work setup. Partner with us today!
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A well-functioning human resources (HR) department is vital for improving productivity, enhancing employee engagement, and reaching organizational goals. Sadly, this is far from reality. HR departments are overwhelmed with pressure to meet employee expectations and stay ahead of evolving regulations and technological advancements.
Although your HR department is your organization’s pillar of support, it can crumble when challenges and issues become too unbearable. As such, there is a growing demand for human resource outsourcing. As of 2024, the market value of HR outsourcing was $42,455.08 million USD. By 2032, its value could amount $68,978.07 million USD.
If you’re looking to jump on the HR outsourcing train, now’s the time to do so. This article tackles the 10 advantages of human resource outsourcing, written in detail to help you envision these benefits.
HR outsourcing can be an intimidating and exciting venture for any business. Before reaping the advantages of human resource outsourcing, let’s take a look at whether this strategy is right for your business:
From access to high-caliber talent to streamlined HR management, HR outsourcing offers plenty of benefits to businesses. Below, let’s explore the top 10 advantages of human resource outsourcing:
Onshore outsourcing HR severely limits your talent pool to your geographic location. If you need specialized expertise, expect higher labor costs that reflect the vast knowledge and experience of high-caliber human resources professionals. On the bright side, what’s great about offshore outsourcing HR is the choice of talent available at your fingertips.
Need an HR compliance officer or a C-level recruitment specialist? The best HR outsourcing companies can provide you with cost-effective, top-performing HR talent who are screened and vetted by expert recruitment teams.
These professionals not only meet your desired qualifications in terms of skills, experience, and knowledge, but they’re also culturally compatible with your organization.
Maintaining an internal HR department gives you better oversight of your team. Though true, labor and overhead costs can soar quickly. The Society for Human Resource Management (SHRM) found that the average cost of hiring an employee is $4,683 USD and $28,329 USD for executives.
This makes ramping up headcount less viable during peak seasons for recruitment, performance evaluation, and compliance. However, outsourcing HR functions to an HR outsourcing provider can slash your labor and overhead expenses by a fraction. Outsourced HR employees are cheaper, which makes workforce scaling a more attainable goal from a financial standpoint.
Outsourcing companies also provide employees with the equipment, tools, and technology to deliver outsourced HR services. Unlike running an internal human resources department, there’s no need to pay for additional rent or utility bills.
Here’s the truth: There’s no “right” time for a technology upgrade. However, leaving upgrades to the backseat for far too long can cost your HR department dearly. Productivity loss, delays, errors, and security threats — all these can undermine HR operations, deteriorate efficiency, and increase your company’s risk of non-compliance.
While an IT professional may provide a band-aid solution, continuously using legacy software can increase costs by 20% to 25% each year. If you’re looking to balance technology upgrades with cost savings, HR outsourcing is your best bet.
Equipped with state-of-the-art HR outsourcing solutions and AI tools, HR service providers can support your department’s HR responsibilities with less financial investment from your end. Plus, it gives your internal HR department peace of mind knowing that they can rely on the provider to secure sensitive employee data.
Efficiency is your HR department’s best friend. Efficiency translates to a smooth workflow and organizational success. Obviously, you won’t achieve these if your HR staff is powering through endless tasks and experiencing burnout.
One of the benefits of outsourcing human resources is boosting operational efficiency. With the help of automation tools, outsourcing companies can streamline repetitive and time-consuming administrative tasks, such as interview scheduling, application tracking, and payroll administration.
In effect, your internal team won’t be slowed down by low-value tasks and can dedicate more time to core business activities.
Organizations mostly rely on HR professionals for compliance. Thus, they shoulder the responsibility for knowing all relevant federal, state, and local employment laws, workplace health and safety standards, and data privacy regulations. Amendments or changes? HR staff need to update themselves — or risk paying a higher price for non-compliance.
According to Globalscape, non-compliance can cost companies an average of a whopping $14.82 million USD (versus the cost of compliance at $5.47 million USD). Unfortunately, internal HR professionals are already overwhelmed with cumbersome administrative tasks. This makes meeting compliance standards more challenging, thus increasing your company’s risk of fines, penalties, and lawsuits.
Working with an HR compliance officer from an external HR provider can help your business avoid compliance issues. Using their knowledge of employment laws, workplace standards, and data privacy regulations, an HR compliance officer can ensure that every business function adheres to legal requirements in your home country.
Because an HR compliance officer has experience with international compliance, they can promise that your organization’s employment practices comply with global labor standards and the country’s local laws.
Nowadays, employees have higher standards and expectations. In addition to fair compensation and attractive benefits, they also want purpose, work-life balance, and a non-toxic workplace.
That’s why attracting the right talent is a challenge in its own right. You need to identify your Employer Value Proposition (EVP), enhance employer branding, improve hiring processes, and prioritize diversity, inclusion, and equity (DEI). One bad hire can cost your business $17,000 USD, so you wouldn’t want to scrimp on recruitment and talent acquisition.
An external HR provider can support your talent attraction initiatives with fresh perspectives and insights into your hiring pipeline. To attract skilled and culture-fit candidates, your provider will employ AI technologies and analytics, refine job descriptions, and improve your employer branding. This reduces the financial repercussions of onboarding ill-fit employees or bad hires.
A company invests in its employees because they are its greatest asset. Competitive salaries, appraisals, attractive benefits, supportive leaders, and an inclusive workplace culture can make employees stay in your organization. But there’s another thing that makes them stay — career growth.
Naturally, employees want to grow their careers and unlock their true potential. This is possible with self-learning and the help of your HR department. But if your in-house HR is swimming in administrative tasks, outsourcing HR is your solution.
Working with an offshore training and development specialist opens your mind to new perspectives and best practices on career development.
Utilizing their knowledge of instructional design and adult learning strategies, your outsourced training and development specialist can design professional development programs that support self-learning, maximize your employees’ potential, and meet organizational goals. As a result, your workforce will perform better and become more productive.
Companies offer a wide range of employee benefits, including medical insurance, paid time off (PTOs), scholarships, and remote work arrangements. Since job seekers look at an organization’s benefits, your own benefits can either attract or repel potential employees. Of course, the more competitive your benefits are, the more likely your existing employees will be happy, productive, and loyal.
Unfortunately, low employee engagement, lack of awareness, and poor employee-HR coordination are detrimental to effective benefits administration. This is where outsourced HR and benefits administration takes the spotlight.
An HR outsourcing provider can integrate a third-party benefits administration software into your system, streamlining benefits enrollment and verification and centralizing employee benefits into an accessible self-service platform. This minimizes errors and gives HR employees more time for core business activities.
Furthermore, outsourced benefits administrators can offer suggestions for designing attractive benefits that appeal to your employees. They can also leverage AI and data analytics to identify trends and tailor benefits according to a staff member’s unique needs.
Payroll processing is a meticulous HR function. While payroll is associated with numbers and calculations, it is more than meets the eye. It’s about compliance, credibility, reputation, and trust. In fact, every payroll error you address sets your company back an average of $291 USD — which can add up if left uncontrolled.
Consequently, payroll mistakes can lead to poor employee satisfaction, inefficiencies, and financial loss. If your company has missed payroll deadlines or faced compliance issues, it may be time to outsource payroll to an HR outsourcing company.
Outsourced payroll specialists can handle the bulk of your payroll, leveraging advanced payroll software to streamline the calculation of benefits, minimize data and calculation errors, and ensure that all payslips are delivered to the correct employee.
These payroll specialists can also help your internal team prepare payroll and annual tax reports on time, so your company avoids fines and lawsuits from non-compliance.
HR management is tough. Companies entrust HR managers with tasks involving compliance, recruitment, talent management, workplace discipline, and performance evaluation. Alarmingly, human resources is a department that’s rife with burnout. Whether it’s excessive workload or empathy fatigue, HR staff and managers also crave support for their struggles.
This is where outsourcing HR management comes into play. With their out-of-the-box perspectives and knowledge of HR best practices, offshore HR managers can assist your in-house managers with developing training programs, enforcing company policies, managing your workforce, and maintaining legal compliance.
Because outsourced HR managers leverage AI, workflow and processes are streamlined to reduce your internal HR management team’s workload. This enables them to focus on high-value internal HR initiatives.
You can reap the advantages of human resource outsourcing by applying these two HR outsourcing best practices:
Choosing a provider is one of the most important steps to take when outsourcing HR. The right vendor has the following:
In some cases, the red flags show up when your offshore HR team is working on a trial project. But don’t let this stop you from finding the right vendor. Know what you want, set your expectations, and keep vetting outsourcing partners.
Outsourced HR services are only as good as the offshore staff behind them. To leverage the advantages of human resource outsourcing, set realistic performance standards and conduct regular feedback sessions.
This way, you can identify areas for improvement, assess your team’s ability to maintain compliance, and help your HR staff reach key performance indicators (KPI). The better your team performs, the more likely you’ll achieve organizational goals.
At KDCI Outsourcing, we can help you achieve the benefits of human resource outsourcing with our world-class offshore outsourcing solutions — carefully tailored to meet your organizational and staffing needs.
We source, vet, and onboard HR professionals who meet your requirements and exhibit values, ethics, and mindsets that mesh well with your organizational culture. With our expertise in automation and AI technologies, we can optimize all HR functions for efficiency and scalability.
Build a dedicated HR team and let’s elevate your HR with KDCI. Contact us for a quotation or proposal today!

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