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Why these 10 US cities are turning to offshore outsourcing the most

10 cities outsourcing the most - Seattle Washington

A recent study revealed that the US is the number one country in the world for offshore outsourcing. As the adverse effects of the COVID-19 pandemic continue to rise, more cities are turning to offshore outsourcing to survive.

Outsourcing has provided a way for businesses to thrive even in the middle of a global health crisis. For small and medium-sized enterprises, it is the perfect solution to not run out of business.

Advantages of outsourcing post-pandemic

The outsourcing industry has always been stable since the beginning, but what’s interesting about the sector is that it is stronger when the economy is weak. Its counter-cyclical nature is the main reason why the industry is expected to flourish mid- and post-pandemic.

More businesses have resumed operations recently, striving to bounce back from the negative impact of COVID-19 on business. As companies adapt to the new normal, they turn to outsource. Here’s how the outsourcing industry helps businesses of all sizes.

1. Companies can hire dedicated and skilled employees while reducing employment costs up to 70%

Businesses find it hard to say no to the chance of saving money while maintaining a skilled workforce. With outsourcing, employers can reduce labor costs by up to 70%. In the Philippines, the world’s leading outsourcing services provider, a good salary starts at USD500 per month. English is the primary language of the country, and it also produces 650,000 university graduates every year. A win-win opportunity for both sides.

2. Companies get access to a work-from-home (WFH) enabled workforce

Adaptability and flexibility are traits that are more needed than ever before. With WFH adaptability, businesses can continue operating with minimal supervision. Typical outsourced companies in the Philippines work in centralized offices. However, with the COVID-19 pandemic, they have to come up with another effective work arrangement.

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A WFH-enabled workforce just proves that remote, outsourced, and offshore teams can get the job well done, and are robust alternatives to in-office solutions.

3. Core teams can focus on main responsibilities

With a competent outsourced team ready to fulfill all the tedious and repetitive tasks, a company’s core staff can focus on the more important responsibilities needed for the business’ growth and recovery. 

Business Process Outsourcing (BPO)
Business Process Outsourcing (BPO)

Misconceptions about outsourcing

“My company can save up to 70% on labor costs while still maintaining a skilled staff? There’s no way. It must be a scam!”

Outsourcing may sound too good to be true. Everything seems like a win-win situation. While there are disadvantages to outsourcing like any other industry, here are some outsourcing myths and misconceptions that we’ll debunk so you don’t have to.

1. Outsourcing weakens the economic status of the country

Outsourcing actually strengthens the company and the economic status of a country. As companies get stronger, they’ll employ more locals which will result in more contributions to the community.

2. Outsourcing is unethical

This is probably the saddest misconception about outsourcing. Outsourced employees are not being overworked and underpaid. In fact, they can often be paid 100%-200% more than people in similar, but non-outsourcing job positions. Further, the Philippine government is very pro-labor when it comes to its policies.

3. Outsourcing delivers low-quality services and outputs

Outsourcing in the Philippines wouldn’t be as successful as it is if clients are not satisfied. Outsourced recruiting companies have a comprehensive interview and examination process to ensure that their staff is equipped with the right skills and educational background for the roles needed.

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Top ten cities turning to offshore outsourcing to revive the economy

As a way of adapting to the new changes brought by the COVID-19 pandemic, more US cities are turning to offshore outsourcing to revive their cities. A recent study revealed that these cities have been outsourcing to the Philippines in record numbers for the past months. These cities are characterized by the highest average salaries earned.

1. San Jose, California

San Jose houses large corporations like Samsung, IBM, eBay, and Hewlett-Packard, which all rely on outsourcing for their information technology (IT) and bookkeeping needs. Within the past few months, San Jose was hiring record numbers of IT providers and bookkeepers in the Philippines.

2. San Francisco, California

San Francisco is a dominant area in the tech sector. Seeing it is the home to companies like Apple, Google, Facebook, and Twitter, we can see why. The surge in customer service demand has caused the city to outsource more customer service representatives and virtual assistants in the Philippines.

3. Washington, D.C.

Washington houses various organizations such as law firms, civilian contractors, nonprofit organizations, professional associations, and several Fortune 500 companies that outsource their virtual receptionists and assistants to the Philippines.

4. Boston, Massachusetts

Boston is one of the most economically powerful cities in the world. To keep up with the demands of a busy city, high-tech companies in Boston have outsourced their virtual assistants and call centers in the Philippines in record numbers.

5. Seattle, Washington

Seattle is a hub for global health, as the city serves as the headquarters for various health institutions like the Bill & Melinda Gates Foundation and the Infectious Disease Research Institute. As the COVID-19 attacked the US, the city outsourced a record number of telehealth providers in the Philippines.

6. New York City, New York

New York City, the most populous city in the US, houses a large number of multinational corporations. It is also the center for banking and finance, retail, accountancy, world trade, and tourism. The busy city’s solution to the huge demand of customers and investors is to outsource their customer service, bookkeeping, and virtual receptionist services. In the past few months, NYC’s surging outsourcing needs were accommodated by the Philippine outsourcing industry.

7. Hartford, Connecticut

Hartford is a center for research and medical care, housing medical institutions like the Hartford Hospital and The Institute of Living. The COVID-19 pandemic has pushed the city to outsource its telehealthcare and customer service providers to the Philippines to contain the increased demand for healthcare services.

8. Anchorage, Alaska

The city’s state and federal government and corporate headquarters rely on outsourced accountants and IT support staff, making it the top eighth US city to turn to offshore outsourcing. Tourism is also a huge sector in Anchorage, and the canceled flights and bookings drove the city to outsource more virtual assistants and customer service staff.

9. Denver, Colorado

Denver has become a key trade point in the US partially due to its geographical location and major transportation systems. During the past few months, the study suggests that Denver hired a record number of outsourced IT staff and bookkeepers to keep its economy alive.

10. San Diego, California

The third California city on the list, San Diego is one of the best cities in the country to launch a small business or startup company. Investors and company owners are taking advantage of this by building startups and outsourcing virtual assistants and bookkeepers to take care of the non-core tasks.

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About OA

Outsource Accelerator is the trusted source of independent information, advisory and expert implementation of Business Process Outsourcing (BPO)

The #1 outsourcing authority

Outsource Accelerator offers the world’s leading aggregator marketplace for outsourcing. It specifically provides the conduit between Philippines outsourcing suppliers and the businesses – clients – across the globe.

The Outsource Accelerator website has over 5,000 articles, 350+ podcast episodes, and a comprehensive directory with 900+ BPO companies… all designed to make it easier for clients to learn about – and engage with – outsourcing.

About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.