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Offshore Outsourcing Advantages

Offshore outsourcing can be a great way to save money on labor costs, open up a wider talent pool, or even expand into another country.

Offshore outsourcing is nothing new. Businesses have been doing it for decades, but the market is changing in scale, nature, and the type of roles that are being outsourced. Technological advances are making the world smaller, breaking down barriers, and reducing limitations on who a company works with or where its staff should be based. At the same time, evolving markets and changing customer expectations are opening up more opportunities and changing business attitudes to what they expect from outsourcing.

What is offshore outsourcing?

Offshore outsourcing is the practice of moving some or all of a company’s operations overseas. Companies will hire a separate company to manage operations that would normally be managed entirely in-house. It has normally been seen as a way to reduce costs by taking advantage of lower labor costs. However, it can also open up new talent pools, and provide new ways of engaging with your customers.

Common examples of outsourcing include call centers, support desks, or financial services. However, as technology becomes more sophisticated, companies here in the UK are finding opportunities to work with a much wider range of service providers in professional industries such as marketing, IT, or software development. As the market evolves so too are some of the main advantages.

Value for money

The most common motivation behind outsourcing remains the chance to benefit from lower labor costs. Countries such as India and the Philippines have always led the market thanks to low average wages within the country. Call centre staff, from India, can be hired at a fraction of the cost of their counterparts in the UK.

Some countries may also offer more favorable taxation conditions or labor laws making them ideal partners. With English being commonly spoken across the world, many basic functions such as customer service or technical support roles could be delivered easily from any location.

In an environment in which profit margins have been tightening outsourcing represents an opportunity to save money.

Broadening the talent pool

A more globalized economy is leading to a more globalized workforce. Today a business needn’t be constrained by the talent in their local areas. They can reach out and engage with any professionals anywhere they want. Faster telecommunications make it possible to collaborate instantly with people by video link and instant messaging. By casting the recruitment net wider you can build the team you want rather than make do with the local talent available.

Engaging the services of foreign talent can also introduce other cultures and perspectives into your operations, all of which can open up a host of surprising opportunities.

Expanding into new markets

Offshore outsourcing can be the first step towards global expansion. It can open up new markets, new customer bases, and new revenue opportunities. Expanding into a new country can be risky, especially if you have no knowledge of the market and how it operates.

Using employees from that country enables you to benefit from their local knowledge. It provides you with the flexibility to adapt your product or service to the demands of that market raising your chances of success.

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