BPO meaning: business process outsourcing explained

By the HRPricing editorial teamReviewed October 18, 2026How we research and score

BPO stands for business process outsourcing: contracting an outside company to run a business function for you, such as customer support, back-office data work, accounting, payroll or HR. The key difference from hiring is who employs the staff. In a BPO, the provider employs and manages the team and you buy an outcome; with an employer of record, you pick and direct the worker yourself.

BPO (business process outsourcing): contracting a third-party company to perform a business function, such as customer service, data processing, accounting or HR, using its own staff and systems.

What BPO covers

  • Front office: call centers, customer support, sales and chat.
  • Back office: data entry, claims processing, bookkeeping, payroll and HR administration.
  • Where: onshore (same country), nearshore (nearby time zones) or offshore, in countries such as the Philippines or India.

HR outsourcing (HRO) and payroll outsourcing are both forms of BPO. Firms that split delivery across countries use a global delivery model.

BPO vs EOR vs contractor

Three ways to get work done offshore
BPOEmployer of recordContractor
Who employs the workerThe BPOThe EOR, on your behalfNobody; self-employed
Who directs the workThe BPOYouThe contractor
How you payPer seat, hour or task, by quoteSalary + employer costs + feeInvoices
Published pricesNone in our research$99 to $699 per employee a monthPlatform fees from $19 per contractor a month

Sources: Native Teams, Payoneer Workforce Management (Skuad), Oyster, Deel and Remote pricing pages, checked Oct 16 and 18, 2026.

A BPO suits a process you want handed off whole. An EOR suits a person you want on your team. Directing a contractor like an employee risks misclassification; see what an EOR does and EOR vs staffing agency.

Example: a dedicated hire in the Philippines

To judge a BPO quote for a full-time dedicated agent, price the same person hired directly through an EOR:

One employee in the Philippines on USD 40,000, through an EOR
ItemUSD per year
Salary40,000
Employer contributions plus 13th month pay (11.3%)4,520
EOR fee: Multiplier Core, $499 x 125,988
Total50,508

HRPricing arithmetic, Oct 2026. 11.3% from our Philippines data (SSS, PhilHealth, Pag-IBIG, EC and the 13th month pay under PD 851). Multiplier pricing checked Oct 16, 2026.

That is $4,209 a month. Ask a BPO what share of its rate reaches the agent's pay, and compare. Country details: hiring in the Philippines and 13th month pay; providers in the best EOR services.

Frequently asked questions

What does BPO stand for?
BPO stands for business process outsourcing: paying an outside company to run a business function, such as customer support, data processing, accounting or HR.
What is a BPO company?
A BPO company employs staff and runs processes for client businesses, onshore or from offshore centers in countries such as the Philippines and India. The client buys a service, not individual employees.
Is payroll outsourcing a BPO?
Yes. Payroll outsourcing and HR outsourcing (HRO) are types of BPO, focused on back-office work.
What is the difference between a BPO and an EOR?
A BPO employs and manages its own team to deliver a process. An employer of record legally employs a worker you choose and direct, for a fee of $99 (Native Teams, whose help center says EUR 99) to $699 (Oyster) per employee a month where published (checked October 16 and 18, 2026).
How much does it cost to hire someone in the Philippines directly?
For a USD 40,000 salary, employer contributions plus the mandatory 13th month pay add 11.3% ($4,520), and an EOR fee such as Multiplier Core at $499 a month adds $5,988, for $50,508 a year.
Sources (11)
  1. Multiplier: Multiplier pricing (checked Oct 16, 2026)
  2. Pebl: Pebl EOR pricing (checked Oct 16, 2026)
  3. Oyster: Oyster pricing (checked Oct 16, 2026)
  4. Deel: Deel pricing (checked Oct 16, 2026)
  5. Remote: Remote pricing (checked Oct 16, 2026)
  6. Social Security System (Philippines): SSS contribution table (checked Oct 17, 2026)
  7. PhilHealth: Advisory PA2025-0002 (premium rates) (checked Oct 17, 2026)
  8. DOLE Cordillera (Philippines): 13th month pay due before December 24 (checked Oct 17, 2026)
  9. Payoneer Workforce Management (Skuad): Pricing (checked Oct 16, 2026)
  10. Native Teams: Pricing (checked Oct 18, 2026)
  11. Native Teams: Pricing plans, features, benefits and how they work (help center) (checked Oct 18, 2026)

This page is general information, not tax, legal or accounting advice. Rules and rates change, so check the official source linked above before you file or sign a contract. Read our disclaimer.