What is offshoring? Is it the same with outsourcing?

Offshoring, also known as offshore outsourcing, refers to the delegation of services to a country from a different region. Usually, businesses in the US and the UK either delegate one-off projects or an entire department to countries miles away from them.

Most people use outsourcing and offshoring interchangeably. While offshoring can be called outsourcing at some point, outsourcing is not always done offshore. This is since the latter is an umbrella term for delegating services, whether locally, in a nearby country (nearshoring), or offshore.

What countries can I turn to when delegating offshore?

You can try offshoring your services to a destination that specializes in certain functions. Some of these destinations include:

India - India remains to be a leading offshoring destination for IT and development services. U.S. companies prefer the country due to its low costs, high-quality services and 24/7 support.

The Philippines - The Philippines complements India’s IT expertise with its customer service and back-office specializations. Companies prefer to outsource in the location due to its solid cultural compatibility, hospitable employees and competitive workforce.

South Africa - With its rising popularity, South Africa is poised to be the next offshoring powerhouse competing with India and the Philippines. The country is known for its world-class infrastructures and the level of care to customers.

Eastern Europe - Eastern Europe is an ideal nearshoring and offshoring destination for software development and IT-related services. Destinations in the region such as Ukraine and Poland are known for producing talents with years of expertise in handling IT-related work.

Can offshoring benefit me in 2022?

Indeed, offshoring can provide you with more advantages than simply cost-cutting. Here are some key benefits that you can get by hiring offshore staffing:

Access to specialized experts. Companies don’t have to be restricted to their home countries when looking for suitable talent. They can hire highly-skilled experts with years of expertise from different locations. 

Government incentives. Most offshoring destinations get full support from their local government agencies. BPOs and their clients usually get tax incentives and duty-free imports as a way to attract foreign investments in these countries.

A better way to scale. Offshoring is also a better way to scale a business more efficiently. A $10,000 investment can go a long way with the cheap labor and operational costs in offshore destinations, helping them to maximize their profitability.

Encouraging business continuity. Lastly, offshore staffing won’t easily be affected by calamities and crises that their source country faces. With this, companies can still operate as usual without interruptions.

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