Pros and Cons of Offshore Outsourcing

Offshore outsourcing generally refers to the process of hiring an external third-party firm or an individual to do certain jobs for you in another country. In essence, offshore outsourcing is meant to save businessmen time and resources. For instance, suppose you are operating your restaurant in London and you have a thriving business with a large number of customers. But now, due to excessive competition in this market, you are not able to get enough staff to take care of your customers. Your employees in London may not be trained to cater to customer requirements. This would mean additional costs for your business as well as a loss of revenue.

What is Offshore Outsourcing? | Outsourcing Definition

An offshore outsourcing company will help you save both time and resources. Here, you need not hire new people who cannot provide the quality of service you want. It can help you hire a firm that has well-trained staff who can provide you with quality customer service. The firm will then train them to handle customer service calls and requests in a friendly manner. This way, you will not have to hire additional manpower to take care of the same issues offshore outsourcing.

Offshore outsourcing has enabled many companies to improve efficiency by getting their work done in the most cost-effective way. Instead of paying someone in another country to do some work, offshoring it to a third party can ensure that it gets done at a much lower cost. Offshore outsourcing enables you to cut costs associated with employing extra manpower and equipping your establishment with necessary infrastructure. This can also reduce or eliminate the costs that you would have incurred if you had hired additional staff augmentation in the first place.

Offshore outsourcing is one of the factors that have contributed to the rise of the so-called ‘gig economy’. The term gig economy pertains to a situation where one country relies on the expertise and capabilities of another country for certain tasks. Companies that are based in one country but have contracts with other companies in other countries can benefit from the practice by outsourcing certain jobs. For instance, a company in the United Kingdom can hire staff from India and Thailand if it needs highly efficient staff members for a certain contract.

Many companies believe that offshoring is a threat to the employment market in their home country. They argue that the number of people searching for jobs in their home country is falling while those looking for jobs in their native countries are increasing. On the contrary, offshore outsourcing does not pose as a threat to employment in the United Kingdom because companies have the option of employing staff in another country. This is because many U.K. companies opt to outsource to low-cost or offshore labour pools such as the Philippines, India and Malaysia.

Offshore outsourcing also provides low-cost access to European software development and engineering resources. Offshore software development companies in Europe to provide a pool of experienced and skilled personnel who speak English as a first language and can work on projects in the European market. Some of the products that can be offered through this practice include financial services, travel services, consumer products and engineering and technical products. The practice has been used for decades but the rapid growth of the internet has led companies to use offshore outsourcing to get resources that are essential to their businesses.

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