Weighing in on the impact of outsourcing functions to onshore jobs

There’s no doubt that outsourcing offers great benefits to companies. It makes them more efficient by delegating certain functions to a cost-effective yet high-quality workforce.

Aside from this, outsourcing keeps business operations afloat during crises. Thus, it helps them generate more jobs and contribute to their country’s economy as well as their outsourcing destination’s development.

However, there’s been an adage of outsourcing taking away jobs for locals by delegating them to countries such as the Philippines and India. This is why some countries have made the move to “take back jobs” by pulling their offshore services back.

One of the things the pandemic did is to make companies realize the importance of outsourcing and offshoring to companies and their economy. Charles Allnutt of MicroSourcing and Derek Gallimore discussed this in episode 352 of the Outsource Accelerator podcast.

How perceptions in outsourcing changed over time

With the advent of technology and increasing globalization, companies’ perceptions of outsourcing have changed over time. This even became evident during the COVID pandemic.

As Charles mentioned, it even “removed a lot of the perceived obstacles that businesses had when they were looking at outsourcing.”

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Some of these notions include the following:

  • The landscape of outsourced services. Outsourcing is not just enclosed to call centers and customer service nowadays. Organizations can freely delegate back-office functions such as data entry, human resources, and accounting to experts that can handle this.
  • Views on remote work. Decades ago, it’s almost impossible to do telecommuting, what more with outsourcing a department offshore. Nowadays, everything including work collaboration can be done online with the help of online tools.
  • The increasing affordability of outsourced work. All in all, technology made outsourcing more available for small businesses. This erases the notion of the industry being open to large enterprises that can afford it.
  • Shifts in priorities. As Charles implied, more companies have made outsourcing to the Philippines their priority rather than an option to simply cut costs on resources.
How perceptions in outsourcing changed over time

Outsourcing’s impact on jobs

More so, the industry made an impact on both the developing country’s economy and their source client.

For one, BPOs generated millions of jobs in countries such as the Philippines. More Filipinos have increased their quality of living as a result. This advantage has been highlighted in the 2019 World Trade Report on the service sector.

What’s more, it kept businesses going during the 2008 financial crisis and the COVID pandemic. Having a countercyclical nature, BPOs managed to grow and continue to serve their clients during these crises. 

This, in return, helped companies cut costs, create more jobs for their local citizens, and contribute to their economies.

Does the industry take away jobs?

As mentioned, countries including the US and UK made the move to pull offshoring functions back and tried to regulate those utilizing the industry. This came with the adage of offshoring taking away jobs for local employees.

Contrary to this, outsourcing does not take away jobs. Rather, with the right management, it should help organizations contribute to local job generation in two ways. 

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  • As Charles mentioned, while it won’t impact onshore jobs, it can make companies allocate more “high end, specialized profiles that may not be in the talent pool in the Philippines at this point”.
  • Outsourcing also helps to fill the talent gap that developed countries face. With their low unemployment rates, businesses have difficulties in finding suitable talents for their non-core services.

How companies can make their onshore staff comfortable with offshoring

One way for companies to be successful in outsourcing is to find ways on how their onshore and outsourced staffing complement each other. 

There are several ways companies can make their onshore employees feel comfortable with outsourcing. This includes:

Orienting employees beforehand

Companies should orient their employees beforehand on their outsourcing plans. They could gather their teams about this change and tell them what they should expect with this move.

Introducing onshore and offshore teams 

Set a schedule where onshore teams can meet and get introduced to their offshore counterparts. It can be done through a hybrid Zoom meeting with all of the in-house employees in a single space.

Encouraging collaboration between teams 

Both onshore and outsourced teams can as well work on a single project to encourage collaboration and a good working environment between the two.

Treating outsourced teams like an extension of the company 

Lastly, gone are the days when outsourced teams exist only to render work for their clients. 

Companies successful in outsourcing nowadays treat their offshore teams like a part of their companies, working hand in hand with their onshore counterparts.

How companies can make their onshore staff comfortable with offshoring

How MicroSourcing brings modern outsourcing

Founded in 2006, MicroSourcing paved the way to bring modern outsourcing to the country. They are the pioneers of staff leasing services in the Philippines with small and medium-sized enterprises (SMEs) as their primary markets.

Compared to traditional outsourcing, the Microsourcing model provides a more scalable option for companies by letting them hire a small team or a single employee to start on. They as well get to know their clients’ needs and strengths to tailor their services better.

Check out their website and listen to episode 352 of the OA podcast here.

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