Today, we live in a highly connected and virtually borderless world. Companies are no longer restricted by geographical boundaries. They can establish subsidiaries anywhere around the globe. Not only that, but they can also transfer resources including machinery, technology, knowledge, and even humans. For quite a few years, businesses have started using offshore staffing as a measure to save costs and increase efficiency.
Outsourcing refers to contracting out non-core tasks and processes of a company to third parties that may be within or outside the home country. When outsourcing is done abroad, it is known as offshore outsourcing. Another concept called ‘offshore staffing’ is becoming popular in the business world. Although it is often confused with outsourcing, offshore staffing is a little different.
Well, yes! Offshore staffing is a process through which companies can hire and build a team of provisional workers overseas. In other words, organizations engage in offshore team hiring when they build a development center abroad and hire a team of employees from the same country. There are essentially two ways of hiring remote staff. You can either do it yourself or approach an offshore staffing agency. These agencies offer offshore staffing solutions to various kinds of businesses irrespective of their size. Some common services that are outsourced offshore are creative tasks, data processing, IT software and development, customer care services, accounting, etc.
The most common reason why companies opt for offshore staffing is that it results in cost savings. Since the world has turned into a global village, hiring remote staff is no longer difficult and costly. The cost of hiring an employee with a certain set of skills varies across the globe depending on the strength of the host country’s economy, international business regulations, workforce available, and so on. Mostly, offshore staffing companies tend to offer highly qualified professionals at a lower cost. For example, an American company is likely to pay USD 25 per hour to hire a local entry-level employee. On the other hand, it can hire the same skill set at a mere cost of USD 4 per hour in the Philippines. Therefore, offshore staffing results in significant operational and labor costs.
Offshore team hiring can help you in freeing up your internal resources and invest your valuable time in strategic areas of the business. For instance, if you hire an offshore staffing agency in the Philippines, you will receive services like recruitment, training, managing, payroll, accounting, technical support, and so on. In short, they will take care of most human resource functions in their home country. Hence, you will get more time to focus your resources and energy on the core areas of your business rather than getting engaged in hiring, managing, and housing your employees. This helps in increasing the efficiency of your in-house activities.t
Unlike outsourcing, offshore team hiring allows you to remain the boss of your team. Thanks to technological developments, you can manage and communicate with your remote team workers effectively despite the distance involved. You will still be responsible for assigning tasks to the remote workers and getting regular reports for them.
Offshore hiring reduces costs, releases strategic resources, and helps businesses in establishing a global presence. It also enables them in getting access to a highly skilled talent pool and work for longer durations. Companies not only earn high returns due to low labour costs but also the cost of technologies is lower in the offshore countries. All these factors result in low cost of production, higher productivity, and thus, higher profitability.
Just like the two sides of a coin, offshore staffing comes with its own set of challenges as well.
Differences in languages and cultural practices of the people belonging to the home country and the host country can lead to communication barriers. Most companies that indulge in offshore hiring use English as the primary language for communication. The hired remote workers might not have the same level of understanding of the language as them. A distinct accent, varied meanings of the same words, misinterpretations, and other semantic factors can cause trouble in effective communication.
Operating in countries with different time zones definitely helps your business to run 24/7. But at the same time, it also poses various challenges in properly managing and communicating with the remote workers. There can be communication gaps which can lead to delayed decision making. In tasks that have deadlines and are time-sensitive, delayed communication can cause further problems.
For quite a long time, off-shoring, companies face ethical concerns. They are often blamed for increasing unemployment in their own countries or exploiting cheap labour overseas. When organisations decide to hire remote staff to carry out some of their present operations, it results in heavy layoffs and increases job insecurity among the present employees. Such instances can affect the public image of the companies.