Despite numerous technological advances, offshoring still has negative connotations. Some consumers see offshoring as being provided low level services. This often depends on the country offering these services and its reliability in maintaining quality services. Some service providers still use traditional strategies as well. They are more focused on reaching required metrics rather than focusing on the quality of their services.
Why Offshoring Is A Viable Strategy
Considering today’s global situation, these are all legitimate concerns. It’s understandable for people to criticise companies that offshore their business operations. However, most need to recognise that businesses face unseen challenges they may not be aware of or fully understand.
When boiled down to its core, there are four primary reasons why companies choose to offshore. Let’s take a look at them.
Offshoring Is Cost Effective
Businesses are constantly seeking ways to maintain a stable source of revenue. At the same time, they have to sustain their daily operations to stay competitive. However, as we’ve seen this year, there are unpredictable fluctuations in the economy to consider. To that end, most companies cannot just maintain local costs for certain roles.
That is when offshoring becomes an enticing option for them. Consider for a moment the cost of hiring a local customer service representative. In Australia, their annual salary costs an average of $50,000 a year. Compared to an offshored CSR in the Philippines, their salaries are almost a quarter of this price. This also does not translate into a lowered quality of work. Businesses, therefore, can redirect their resources by reducing some overhead costs. Their local workforce can then focus more on their core competencies, increase productivity, and prioritise revenue-generating tasks.
Offshoring Lets Them Stay Competitive
Earlier, we mentioned the need for businesses to stay competitive. For that to happen, they need to increase efficiency, enhance operations and innovate on delivering quality service. Offshoring allows companies to offer high value services such as 24/7 customer support and provide effective service level tasks with flexible work schedules.
In our interconnected world, businesses of all sizes are competing on a global stage. This means that innovation is becoming a major factor in determining success. The constant demand for efficient, personalised customer service for instance makes it more challenging to stay relevant.
Offshoring Addresses Skill Shortage
It cannot be argued how alarming unemployment is today. The declining number of available opportunities globally is often why most people disagree with offshoring. However, despite this situation, several industries are struggling with how to overcome the skill shortages.
Through offshoring, companies discovered that they could hire a team of highly qualified staff in countries like the Philippines. They discovered valuable, motivated team members ready to take on functions like back-office tasks often overlooked by local employees.
Offshoring Provides High Quality Work
Companies must innovate on how to have an efficient process flow within their business. It allows them to enhance the quality of their products and services offered. Through modern technology, they now have full control over their offshore team, enabling them to ensure quality standards are reached.
As noted earlier, offshoring back-office tasks is valuable to any company. Keep in mind however the quality of offshored services may vary from each country. Depending on the goals your business aims to achieve, it is best to look at which country can provide you the best team. China, for instance, is king when it comes to production and manufacturing. On the other hand,, offshoring customer service representatives to the Philippines continues to be ideal. The talent and skill that the global workforce offers are irreplaceable. They can be effectively harnessed by companies to reach their long-term goals.
Offshoring, like any other strategy, is not a perfect approach. If not paired with the right partner, it can be prone to abuse and used just for cutting costs. Most of all, offshoring should not be seen as a replacement for your current, local staff. Instead, it should be used to augment your current team for the further growth of your business. That is why this strategy needs to be carefully customised and tailor-fit with the company’s needs without disrupting ongoing operations.