New Industries Continue to Explore Offshoring

18 Oct 2016

Manufacturing in a market the size of Australia is a tough gig, especially in the food and beverage industries, with scale as an important success factor.

Scale brings the freedom to allocate proper resources to those parts of the business that may have been neglected in the initial rapid growth phase.

These neglected areas could include marketing and having the website ticking along just right, or getting a handle on digital branding and social media, or finding the right graphic designer or app developer.

Whether you’re baking biscuits or brewing ginger beer, scale allows your business to move along the growth curve faster than might otherwise occur.

To achieve scale, patience is usually required, but increasingly, offshoring is becoming a viable option for manufacturing businesses of any size and in different industries to fast-track their brand-building capabilities while still investing in the core manufacturing side of the business.

Many of Australia’s large corporations and best known SME brands are already using offshore outsourcing – it’s the way of the future, yet it is a new enough trend that not too many businesses are willing to publicly talk about it.

One reason could be sensitivity around whether offshoring means job losses. London School of Economics researchers found that for US manufacturers, offshoring tends to increase productivity and reduce costs, causing businesses to expand domestic hiring enough to offset the jobs lost to workers overseas. The research found that increasing offshore jobs by 1% was linked to a 1.72% rise in overall US employment.

Experience tells us that our clients tend to maintain or increase their Australian staff, upskilling local employees to increase their value to the business.

By recruiting specialist staff in a lower-cost environment such as the Philippines to undertake process-orientated work, capital is freed-up for the business to invest in the parts of the operation that generate revenue.

Tasks usually associated with offshoring include data entry, accounts payable, payroll and other ‘back office’ functions.

But in a key emerging trend, Australian businesses are employing offshore specialist staff in website design and coding, digital marketing, search engine optimisation, graphics and app development.

By enhancing the capability of existing marketing teams with the high technical skills and language proficiency on offer in the Philippines, Australian manufacturers can rapidly advance their branding strategy, reaching goals far sooner than previously budgeted.

The Philippines is a country with top-notch English language skills, a compatible time zone and strong business skills, and smart Australian manufacturers are tapping in to this resource to more rapidly advance their marketing plans than would otherwise have been possible.

Thanks to rapid developments in technologies such as voice and video over IP, it is as easy to talk to a staff member in the Philippines as with a staff member down the corridor. Many of our clients keep an audio chat window open on their PCs and talk with their Filipino colleagues throughout the day as if they were sitting across the desk from them. It’s the new normal.

The opportunity to manage an offshore team is also an important new skill for staff to learn for a career in the 21st century.

Although establishing a team offshore is not a “magic bullet” solution, with the right management and careful planning in the establishment phase, the rewards can be substantial. For the food and drink industries, offshoring is an option that gives their marketing managers the ability to build the brand quickly and professionally.

This article originally appeared in the September issue of Food and Drink Business Magazine