Offshoring Myths

Offshoring Myths

Offshoring is certainly not without its detractors, which has resulted in numerous myths surrounding it. Although it is understood that not all companies will want to consider offshoring as a viable option for their business, it is important to clear up particular misconceptions about what it is, how it affects your company and its impact on local employment. By being more aware of these myths and how each of them are addressed, you will be able to make a more informed decision on if your business should consider offshoring.

It is only possible for very big businesses

Expanding a business to a bigger scale means expanding facilities and increasing fixed costs. These may seem doable for major companies, but offshoring allows for small and medium businesses to also grow without massive overhead. Thanks to the internet and other technological developments, myths about offshoring being only accessible by major companies is simply not true. Having a low-cost offshore staff means your savings can help you invest in either new projects or Research and Development, both of which would have been otherwise beyond your business’ budget.

Requires expensive technology platform

Diversify is located in Makati City, the heart of Metro Manila’s business district. This means that telecommunications in the area lets businesses experience 24/7 internet connectivity through a primary fibre optic cable network. Makati City also compares favourably in terms of infrastructure, with better roads, water, power and telecommunications than other offshoring locations.

It is very difficult to implement

One of the more common myths about offshoring is that it can seem like a daunting process since it often involves communicating with an outside staff based in a country far from you. Diversify OSS has outlined offshoring into 8 points that show how simple the process actually can be. When deciding on offshore functions, you need to:

  1. Define your staffing requirements
  2. Set a budget
  3. Agree on terms
  4. Develop your staffing plan
  5. Complete your IT setup
  6. Find your staff
  7. Orient you and your new staff
  8. Give ongoing support

Diversify can help develop and expound on each of these steps for your business to ensure you will be getting the most out of your offshoring experience.

It sends jobs offshore

This is probably one of the more prevalent myths about offshoring since it involves local job creation. Offshoring greatly benefits a business from a cost saving perspective. When factoring in salaries, office rental and even the cost of living for your offshore team, the cost rounds off to be about 75-80 percent less than in Australia or Canada. More importantly, by offshoring more labour intensive work; businesses can now assign their local employees more value adding, revenue generating tasks. Offshoring does not take away jobs from the local sector but rather enables local team members to deliver more value to your company.

It is only suitable for low-level jobs

As a whole, the Filipino labour force is comprised of highly skilled and technically proficient workers. With about 400,000 graduates a year, half of them hold degrees in different specialised areas, ranging from business administration to marketing and communications. Because the offshoring industry has been in the country for over 20 years, more than 4 million trained workers have experienced working for foreign companies, both locally and internationally.

It has generally poor productivity compared to local labour

Aside from the qualities mentioned above, one of the best things that the Filipino labour force is known for is their loyalty and dedication to the work they put in. They can become long-term and motivated employees who will be essential to your company through proper management and their work ethic guarantees you a high level of productivity.

It is difficult to find good English speakers

Forming an offshore team in the Philippines means also having staff onboard that communicates in English very well. As the third largest English-speaking country in the world with a 94% English literacy rate, Philippine staffers can bring in positive reactions from clients by being easily understood.

It is hard to manage different time zones and different holidays

Diversify operates 24/7/365. Our Philippine office works around the clock with staff that is willing to take in the night shift or any customised schedule you may have. Being in the GMT+8 and EST +12 time zones, local office hours in the Philippines are near identical to Australia’s, making it easier also to communicate with your offshore team at very convenient hours.

It has no transparency – difficult to keep track of staff and what they are doing

Transparency has always been the biggest difference between offshoring and outsourcing. When forming an offshore staff for your business, you are given full transparency and control over your members. This means that you will decide who will be part of your team and what benefits they will receive. Outsourcing does not do this and as a result, you are able to shape different career pathways and get the most from your team that would be motivated to work with you.

It is only a passing fad

By tapping into its young workforce, offshoring is poised to develop growth in the Philippines for many years. It will generate plenty of local opportunities, allowing firms to provide jobs for highly skilled workers with ease. In turn, local workers also need not migrate overseas to find better jobs, therefore strengthening the Philippine workforce and allowing for high employee retention compared to other countries.

It isn’t widely accepted

In the past 10 years, the offshoring industry experienced growth in the excess of 25 percent a year. As the second largest contributor to the country’s GDP, it is fully supported by the Philippine government and they have set up special economic zones where businesses receive tax incentives and other forms of government assistance. These factors have made it possible for Diversify to provide the best offshore services to businesses in Australia, Canada and beyond.