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The Benefits of Offshoring (and Why it is Not a Dirty Word)

The Benefits of Offshoring (and Why it is Not a Dirty Word)

Offshoring has a pretty bad reputation. Most business leaders are well aware of the negative connotations offshoring has picked up as part of a larger backlash driven by poor customer experiences, politics, and the press. 

But over the past 20 years, the landscape of work has changed significantly for many businesses due to digital transformation. And in recent years, technology has drastically changed offshoring, and the practice has become a huge boon to companies, their customers, and their employees.

In fact, the benefits of offshoring some of your business operations comes down to more than just cost reduction. From broadening talent searches to strengthening business continuity, we've outlined how offshore teams can drive value for your customers in a global marketplace. 

First, let’s make sure we have the terminology straight:

Outsourcing describes a situation wherein labor is performed for your company by someone who isn’t an employee. That could mean hiring a freelancer to take on overflow projects or connecting with a consultant for a third-party perspective on a big initiative. It can also mean partnering with a third-party company to externally handle operations, staffing, production, or a service offering for your company.

Offshoring and remote staffing involve on-boarding a team that is a part of your company — they just happen to live and work elsewhere in the world. An offshore team usually reports directly to your company, and in many cases is integrated into the company culture. 

Finding the right balance between outsourcing and offshoring takes experience and perspective. A firm that can quickly assemble an offshore team while navigating local labor laws and overcoming cultural barriers is a valuable asset in your search. 

What are the real benefits of offshoring a part of your operations?

 

Savings

Labor is the single largest cost center for most businesses. Moving labor costs to more affordable markets helps the bottom line — we all know that. But the savings created for the customer is what is often overlooked.

As companies streamline and reduce the costs of overhead, they don’t just increase margin, they create liquidity that can be used to create value for customers. Those savings can give you greater flexibility on price for the end-user. With more budget breathing room, companies can experiment with new offerings to take products and services to the next level. 

Moving a part of your company offshore can also reduce your physical footprint in expensive, competitive real estate markets. Companies that go 100% remote eliminate commercial rents altogether. All that costly overhead can be converted into customer value.

Quality

Historically, the composition of a local talent pool would govern the competitiveness of a local industry. In recent years, remote work has closed the geographic gap. 

The result is a more level playing field for companies across the globe. A startup working in a smaller city can leverage a top-quality IT infrastructure management team remotely without paying for relocation. Startups can get apps developed by offshore dev teams, often at a fraction of the cost you’d pay in the Bay. That helps keep margins low so you can compete with the big players.

Business continuity

When a mission-critical employee leaves unexpectedly, hiring a new person behind them can take weeks or even months. Having access to a larger talent pool can streamline and expedite the search and support business continuity. 

Maintaining a network of offshore talent vastly improves prospects for quickly backfilling key roles. An experienced remote staffing firm can help locate a replacement and quickly complete the necessary on-boarding without tying up resources from your team. That way, your operations continue uninterrupted.

Round-the-clock service

Trying to maintain 24/7 operations with exclusively domestic teams is a significant challenge from both cost and logistics perspectives. Thankfully, offshoring can offer relief by distributing your workforce across numerous timezones to provide expanded coverage without sacrificing quality service for your customer.

For a company that services a global business audience, providing around-the-clock customer care is a key selling point. When essential software or infrastructure fails, no business owner wants to shut down operations and wait until stateside IT or Customer Service wakes up. 

Concentrate on core business

Much of the work that tech professionals do is highly repetitive. Taking a percentage of that work and sending it to offshore teams can free up time for in-house employees to focus on growth. 

Rather than fearing for their jobs, offshoring allows those valued employees to spend more time working on projects that matter to them, which can reduce burnout and improve overall productivity. This also allows space for innovation, bringing even more benefits to both the company and the customer.

Conclusion

In many ways, the argument about the good and bad aspects of offshoring is increasingly moot. Offshoring is an indispensable part of the corporate landscape, and the benefits the practice brings to an organization are numerous. It’s more a question of assessing how offshoring can create value for your customers, your employees, and your company culture.

Finding the right remote staffing solution for your company will ensure that all of your financial, logistical, and ethical guidelines are met.

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