Offshore Outsourcing

Definition

Offshore outsourcing definition

Offshore outsourcing is the process of getting jobs done from a far-off country. Companies prefer accessing other countries who have more resources for people with specialized skills. One popular example of offshore outsourcing is customer service through call center companies. These BPO companies offer quality customer service at a much cheaper rate than hiring locally.

Like nearshore outsourcing, companies prefer having minor tasks outsourced so that the in-house team could focus on the vital functions of the business. One perk of offshore outsourcing for businesses is that they do not need to think about the overhead expenses for the benefits of additional in-house employees.

Overall, the company could benefit from higher profits and lower human resources costs.

Offshore outsourcing examples

Companies turn to offshore outsourcing for cheaper wages and better quality work. Just like nearshore outsourcing, companies prefer having minor tasks outsourced so that the in-house team could focus on the vital functions of the business. 

One popular example of offshore outsourcing is customer service through call center companies. These BPO companies offer quality customer service at a much cheaper rate than hiring locally.

Offshore vs onshore outsourcing

The opposite of offshore outsourcing is onshore outsourcing, which is the practice of outsourcing your business functions and non-core teams to a BPO firm in the same country where the business operates. It is also commonly referred to as “domestic outsourcing.”

Unlike offshore outsourcing, the business does not save as much on employment costs – which is the main reason why businesses turn to outsource in the first place. Since the outsourcing provider is in the same country, both companies will have the same cost of living and labor laws applied.

However, with onshore outsourcing, you wouldn’t have to deal with cultural and time-zone differences.

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

Offshore outsourcing pros and cons

Companies can turn to offshore outsourcing for almost every business role – whether they’re in need of customer service teams, virtual assistants, bookkeepers, graphic designers, IT consultants, and more. Further, before diving into the world of offshore outsourcing, it’s best to be informed of its pros and cons.

Pros of offshore outsourcing

  • Substantial savings
  • Access to a flexible, diverse, versatile, and proficient offshore team
  • Experienced and competent team leaders will guide your remote team
  • Diminished cost and less legal responsibilities (because your outsourcing provider will take care of everything)

Cons of offshore outsourcing

  • Occasional delivery delays
  • Time zone and cultural barriers
  • Possible disclosure of confidential information

Offshore outsourcing Philippines

The Philippines is named as the leading offshore outsourcing destination in the world. With 1.3 million BPO workers and counting, large corporations and even small to medium-sized enterprises all over the world trust that their Filipino workers and remote teams can provide excellent outputs, customer service, or IT assistance at a cost-effective price.

Outsource Accelerator provides you the best customer service outsourcing companies in the Philippines, where you can save up-to 70% on staffing cost. We have over 3,000 articles, 200+ podcast episodes, and a comprehensive directory with 700+ BPOs… all designed to make it easier for clients to learn about, and engage with, outsourcing.

Outsourcing FAQ

What is the difference between outsourcing and offshore outsourcing?

Outsourcing is the business practice and more general term of hiring a third-party provider to perform tasks and functions that were normally done in-house. Usually, companies outsource to save up on labor costs, and so their core team can focus on their more vital responsibilities.

You can either outsource onshore or offshore, and offshore outsourcing is an area of outsourcing. Offshore outsourcing is when the third-party or outsourcing provider is located in a far-off country, usually in top outsourcing destinations like the Philippines or India. These job functions can be outsourced either through a company or directly with an individual (though this way is much riskier).

Who uses outsourcing?

Contrary to popular belief, businesses of any size can benefit from outsourcing. Large corporations like Google, AT&T, JP Morgan & Chase, Canva, and many others have offices operating in the Philippines for several years now, and it looks like they’re not leaving anytime soon.

Further, there has also been record numbers of small to medium-sized enterprises turning to outsource in the Philippines in recent years. In fact, Outsource Accelerator focuses and helps SMEs to save 70% on staffing costs while getting world-class services from their remote teams. As long as the company is willing to outsource their teams, they most definitely can. No questions asked.

Why do we need outsourcing?

Companies need outsourcing in order to flourish while saving on employment costs. Offshore services providers or business process outsourcing firms can provide you access to the manpower and resources you need for your company, all while giving you options that are fit for your budget.

Outsourcing has proven itself to be a necessity, especially during tough times. With outsourcing, the remote team leaders will take care of staff training, as well as payroll, benefits, and other administrative tasks so your core team can focus on their essential responsibilities. You also could not go wrong with the quality of manpower that you’ll work with, outsourced employees are equipped with the right experience, skills, and educational background for their respective roles.

How do you determine if you should outsource?

Outsourcing has its disadvantages (time zone and cultural differences, possible disclosure of confidential data), but more importantly, it has lots of advantages (massive employment savings, minimal supervision, proficient and experienced employees and team leaders).

Companies should have a deep and thorough analysis of their business. Take the pros and cons, think of a plan on how to apply it to the business, and analyze if the pros of outsourcing outweigh the cons. If you think outsourcing will help your team more efficient and can help you save on employment costs in the long run, then it’s time to take a shot.

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