A recent study has identified the top US cities that are most prolific using offshore outsourcing. These businesses are turning to outsource solutions to save 50%-70% on their staffing costs enabling them to adapt and rebuild in these turbulent times.
Even before the pandemic – running small and medium-sized businesses was tough. Resources are tight, the employment market even tighter, and margins are forever being squeezed. Since the pandemic, businesses have had to do whatever they can to survive. They have not had the same resources or government support of the bigger corporations. In order to survive, they need to slash costs, whilst at the same time adapting and rebuilding their business.
More and more companies are counting on outsourcing to run their businesses smoothly. It provides the resources and expertise needed, all while saving costs.
Why are businesses outsourcing?
Outsourcing has been found to be countercyclical – it is strong when an economy is weak. The reason for this is that offshore staffing helps companies survive, and even flourish when times are tough. Outsourcing is not just about saving money though, and also – counterintuitively – outsourcing is not bad for the home-town or community. A stronger company pays more taxes, employs more locals, and contributes more to its community than its weaker counterpart.
1. Outsourcing can reduce labor costs by up to 70%
It’s hard to deny that the number one reason why businesses switch to outsourcing is to save money. Companies are now realizing that they have to explore the 70% they can save on their staffing costs. But that’s not the only reason…
2. Work-From-Home (WFH) enabled remote workforce
The world has had to quickly adapt to the new work-from-home (WFH) environment. The outsourcing industry typically works from centralized offices, but it is fully WFH enabled and optimized. The Coronavirus has shown US businesses that there are alternatives to traditional local-staffing in-office solutions. Remote, outsourced, and offshore teams are a powerful alternative.
3. Instant teams – easy access to core & auxiliary staff
These businesses are able to build the teams they need quickly, efficiently, and cost-effectively. Offshore staffing allows them to build either a core team of staff (operations) or auxiliary support teams (customer support, logistics).
4. Flexible & scalable workforce
Offshore staffing can provide a flexible scalable workforce, quickly. There is less employment regulation, and companies can have the people they need for the time they require – while avoiding the local employment red-tape and bureaucracy.
5. Affordable external expertise
These businesses have been able to draw on the experience of the BPO industry to help get their processes set up quickly and running efficiently. Outsourcing is not just about low-level back office support roles – they can affordably access the expertise required to guide their businesses through challenging times.
6. Highly qualified, dedicated candidates
These businesses are mostly turning to the Philippines for their staffing needs. The country has a population of 110m people producing 650,000 university graduates every year. English is the primary language of the country, and they are a catholic culture. The current generation of Filipinos grows up using Netflix, Youtube, Twitter, and learning from the same online resources as their US counterparts. However, a good salary in the Philippines starts at USD500 per month, so there is an incredible opportunity for a win-win solution.
The top 10 US cities turning to offshore outsourcing
Outsourcing is continuing to play a growing role in the country’s small- and medium-sized businesses. A recent study has revealed that these cities have been outsourcing to the Philippines in record numbers for the last few months. These cities are characterized by low unemployment and a strong primary business sector or group of employers in the community.
1. Memphis, Tennessee
Memphis’ healthcare sector greatly benefits from outsourced healthcare customer service. With the current pandemic, Memphis has been hiring record numbers of healthcare customer service providers in the Philippines than ever before.
2. Chattanooga, Tennessee
In the second place is Chattanooga, just five hours drive from Memphis. Like Memphis, Chattanooga is big on healthcare, as well as the retail trade. The current health crisis has also paved the way for the city to outsource more healthcare customer service providers, as well as retail customer service agents in the Philippines.
3. Buffalo, New York
Buffalo, or the “City of Light,” is big on outsourcing proficient bookkeepers and accountants in the Philippines to keep up with its flourishing financial services sector.
4. Des Moines, Iowa
Des Moines’ insurance industry is definitely taking advantage of Philippines’ customer service agents that are also knowledgeable about sales. The city has established itself as a major insurance center, and as the sector continues to thrive, the more they’re likely to outsource more sales agents and bookkeepers.
5. Cheyenne, Wyoming
IT services play a significant role in Cheyenne’s retail businesses and the government sector. Outsourced IT support staff helps the industries advance in their respective areas without breaking the bank.
6. Yonkers, New York
Outsourcing contributes to the health care, social assistance and educational services of New York’s fourth most populous city of Yonkers. The city has hired a record number of Philippine healthcare service providers and IT professionals during the last few months.
7. Rochester, New York
Global city Rochester is home to several international businesses that have continued to prosper through the years thanks to outsourcing. The past several months have recorded an astounding number of outsourced IT support staff and virtual assistants to cater to Rochester-based technological firms.
8. Cincinnati, Ohio
The several Fortune 500 companies headquartered in Cincinnati are the reasons why the city made it into this list. Major businesses representing major retail brands, headquartered in Cincinnati, outsource their customer service and many of the backend functions, and in this economic climate, we can only expect more outsourced staff from these giant companies.
9. Fayetteville, North Carolina
Fayetteville’s retail markets, restaurants, and online shops contributed to its need to outsource more VAs in the Philippines. The city’s government and education sectors also rely on outsourced accountants and IT support staff.
10. Springfield, Missouri
Lastly, the third-largest city in Missouri’s booming economy is based on health care and retail. Like the other cities in the list, Missouri has greatly utilized outsourcing to their advantage. The city was seen to have outsourced a significant number of healthcare and customer service providers.
What roles have been hired?
Industry giants like American Express, Nike, Booking.com, and Walmart are known to outsource their staff in countries like the Philippines.
However, this creates a misconception that outsourcing is only accessible to the multinationals. Outsource Accelerator has seen a surge in small businesses with only 3-8 employees exploring and successfully integrating professionalized offshore staffing into their business.
Additionally, there is a misconception that “outsourcing” means “call centers”, and that “outsourcing” means “low quality”. In reality, highly-skilled high-quality, dedicated professionals covering the entire spectrum of roles are available – the same as in the US.
These are some of the more common roles.
1. Accountants and bookkeepers
Outsourcing the finance and accounting functions of a business is one of the most common ‘starting points’ for outsourcing. Bookkeeping and accounting is a highly transferable skill, and there are thousands of highly qualified certified public accountants (CPAs) who can competently do US accounting for a fraction of the cost.
2. Administrative assistants and generalists
Time-consuming tasks and other non-core responsibilities can be delegated to general administrative assistants – sometimes referred to as Virtual Assistants (VAs). Depending on the calibre of the candidates, they can handle everything from managing incoming queries, content and website updates, calendar and activity management, data entry, social media management and virtually anything that can be done from in front of a computer.
3. Website design, build and management
Website design, build and management is so important to so many businesses, especially now as everything is transitioning to online.
4. Information Technology (IT) support
Generally, your company’s IT requirements can be managed from anywhere in the world. Competent outsourced IT staff can fully support a business’ digital needs – from operating system errors to phishing to network connectivity, an outsourced IT staff can solve your network problems remotely and efficiently.
5. Customer support
Maybe the most outsourced department of any company, customer service is a critical part of any company. Yet, it can be enormously time-consuming, expensive, and problematic if not properly managed. Outsourcing customer service can ensure that costs are reduced, whilst at the same time, quality response times are improved.
Customer service will typically manage inquiries, complaints, verification, customer support, and other services.