10 Reasons Why Offshore Outsourcing is a Strategic Business Advantage for You

Published by Fair Trade Outsourcing on


It’s not easy to satisfy the growing demands of a customer-oriented market. In a competitive industry like yours, you will need a partner and service provider that can scale up or down quickly and match your requirements as circumstances change. In this volatile market, you’ll need a strategic business advantage that only offshore outsourcing can provide. Here are 10 reasons to start outsourcing today.

1. Going offshore means you have access to a global labor pool.

While you can find skilled workers in your city or hometown, the number of people you can hire is limited. This won’t work at all when you have a high-volume data processing project to complete. But, when you outsource to an offshore provider, you’ll have access to a labor pool with the qualifications you’re looking for.

In countries with a flourishing IT-BPM industry, the workforce usually have college degrees. If you’re looking for IT workers, you can hire graduates of information technology and computer science. If you need a team of bookkeepers or junior accountants, you can easily find graduates of business administration and accountancy or management accounting.

In the Philippines alone, you’ll have access to an educated talent pool of more than 200,000 college graduates. Most of them have a business or medical degree. Some have an IT-related degree while others have baccalaureate degrees in science and engineering.

According to the Commission on Higher Education (CHED), a government agency in the Philippines, the top five fields of study that college students go into include the following:

  • business administration
  • education
  • engineering and technology
  • information and technology
  • medical studies

Of the more than 2.2 million students enrolled in these subject areas, about 41 percent chose business administration and almost 33 percent pursued education studies. Engineering, information technology and medical studies accounted for 20 percent, 18 percent and 9 percent, respectively.

2. Employment costs are lower outside of the United States.

Well, at least in countries where the currency is weak against the US dollar, the labor costs will save you anywhere from 30 to 50 percent of your total overhead.

Consider this. The federal nationwide minimum wage in the United States is US$7.25 per hour. Now, compare that to the minimum wage in the Philippines ($1.33 per hour) and India ($0.31 per hour). And, that’s just the minimum wages and salaries. The total compensation package includes legally required benefits, which are the bare minimum that most employers provide.

However, let’s not automatically conclude that workers outside of the United States who get paid less than Americans are being exploited. We have to consider the lower cost of living in developing countries. In truth, those agents are paid two to three times the minimum wage in their respective countries.

3. Offshore outsourcing takes advantage of the difference in work hours between geographically dispersed teams.

The country where you decide to outsource will depend on your agents’ collaborative work. Better schedule your work hours in parallel with your outsourced team if you need to communicate with your team constantly.

But, if you need your outsourced team to work before or after your own core team did their work, then schedule an overlap of at least an hour between your onshore and offshore teams.

This ensures your outsourced team is there to take care of customers calling your business after hours or on weekends. And, your onshore team gets to interact with your offshore team at least once a day.

4. When you outsource, you’ll boost your company’s productivity as more people are added to your team.

You’ll have two sets of employees working on the project at the same time. This arrangement increases productivity because you have more experienced and talented people working for you. The diversity of talent also enriches the quality of work you get from your teams.

If your project is output-oriented, you’ll produced twice the amount of work vis-a-vis if only one team is working on it. The overlapping schedules also contribute to the efficiency of your two teams. When you need something done in a rush, you have several extra pairs of hands to help you finish it before it’s due.

5. Outsourcing not only saves money but also time.

The success of a project or campaign rides on several factors, one of which is the ability of your team to complete the work on time. Go beyond the deadline and the costs increase. Forcing the team to end the work even though there were unresolved issues will only lead to unsatisfactory results.

Outsourcing the minor tasks will speed up the time it takes to move from one phase to another. You’ll also have more people doing QA to ferret out problems in your project or campaign.

6. Offshore outsourcing shifts the burden of taking on new people when you need to scale up or let a few people go.

It takes advantage of the scalability of outsourcing, which means you can add more people or let go of a few agents without worrying about the consequences. You’re not hiring permanent workers and you’re certainly not terminating workers in case you need to scale down your outsourcing.

Also, scalability can be applied to resources like work space and technology just as well as human resources. Because you now have a smaller team, you don’t have to shy away from paying for team productivity tools, such as Asana or Slack, wherein the pricing changes as more people are added to the team. What you get is a streamlined workflow using the best tools available without putting pressure on you to pay more than you need to.

7. Offshore outsourcing increases your focus on core business activities.

Now that you have unloaded the minor jobs to your offshore team, you and your team of core employees can work on more profitable work. Your team can focus on getting more clients and expanding your market reach. You can further strengthen your brand and make sure your company stays on track as you implement your plans.

Your time and energy aren’t the only resources you can re-invest into other business ventures. You can also funnel all the savings you made through outsourcing into other profitable activities. If you’re feeling generous, you may want to increase the salary of your core employees, such as the line managers who make sure your outsourced workers perform well and exceed your expectations.

8. Outsourcing frees up internal resources since your offshore team already have the infrastructure and technology to do the job well.

Providers usually have a lot to offer in terms of office space, technology, governance. and human resource development. Whatever resources you have in your part of the world can be used to improve your business operation and to further develop in-house talent.

That means your managers will have the time, money and energy to go to conferences or take short-term courses that will enhance their expertise and influence in your industry.

9. Outsourcing takes away the burden of managing the risky aspects of your business.

Volatile markets, government regulations, and technological developments can easily change the way you do business. You may be forced to leave behind legacy technologies and develop new protocols to match the requirements by new legislation. These changes are costly and can threaten your company’s liquidity.

Outsourcing offers you a way out of the mess that these changes may cause. The service provider takes on the risks and manage them as they come. A good outsourcing partner would know what to do in case they need to make a change. In fact, a highly regarded outsourcing provider should be focused on future-proofing your business processes.

10. Offshore outsourcing stimulates entrepreneurship, innovation, and economic growth in countries where BPO and KPO companies prosper.

Countries like the Philippines have seen tremendous economic growth because of outsourcing. The information technology and business process management industry has helped millions of people get high-paying jobs. These jobs have helped their families live a more comfortable life.

And along with the rise of wages, comes the rise of consumer spending which encourage investors to come and build their businesses. These businesses start hiring more people, and the cycle goes ’round again.