Globalization has never been this accessible and needed than ever. If that wasn’t clear before, it is now.
The Covid-19 pandemic contributed to globalization’s acceleration, positioning companies to adapt to the digital and technological advancements in a world that had to cut off on-site work arrangements and physical socialization for a while. Changes were necessary for every business, getting pushed into realms that already existed but were never pursued because why would they? Everything was going on smoothly until the pandemic hit.
But that’s just it. The current global crisis allowed effective business solutions like offshoring to shine brighter than for the past decade. The pandemic became the catalyst that opened business owners to the idea that globalization is the future business path if it wasn’t clear enough already.
There will be a lot of questions that require answers before considering offshoring solutions. However, skepticism continues to hover like a cloud as business owners remain hesitant with utilizing the service. Here are some of the most significant question marks surrounding offshoring in 2022.
What are the Benefits Beyond Cost-Cutting Solutions?
Cost-saving has always been a valuable strategy for businesses. Amid the pandemic, however, it became a lifeline. The need to reduce business expenses was so drastic that organizations had to consider mass employee layoffs, remote work setups, digital migration, and more sacrifices to keep the business afloat. Unfortunately, entrepreneurs were left with limited resources because of the pandemic’s restrictions and implications. This is where offshoring became saviors for businesses.
Cutting costs is offshoring’s primary marketing pitch. It is common for offshoring ads to contain words like “save X percent costs now” or “get high-quality talent for a low fee.” There is truth to those words, as offshoring lowers labor costs by moving operations to countries with more flexible economies and tax and regulatory benefits.
However, cost-cutting isn’t the only advantage of offshoring. The multi-dimensional facet of offshoring solutions makes it an attractive service for businesses. Here are a few of those advantages beyond saving costs:
Access to global talent
The labor market in business-friendly countries is competitive. Attracting high-quality talent will require companies to prioritize recruitment and talent acquisitions strategies, which usually means spending a lot of money. Unfortunately, that situation puts small businesses in a bind. It is possible to lose out to established corporations for talented employees because their reputations are more stable, and their incentive and compensation packages are better built. Employee retention might even take a hit. Fortunately, offshoring gives businesses a shot at eliminating talent shortage issues by widening recruitment efforts to anywhere globally.
Improved scalability
Companies should always look to scale up, no matter how challenging the times get. Offshoring provides enough headroom for labor and operational costs to help businesses dedicate funds and resources to growth projects. Offshoring might not be the immediate solution for maximizing profitability, but it offers a valuable contribution to the overall goal.
Tax incentives
Offshoring is part of the business process outsourcing (BPO) industry, which often receives much support in countries where offshoring is among the economic pillars. The government-backed sector creates tax incentives and flexible regulations to help BPO companies and offshoring firms attract foreign clients.
Business advancement
Offshoring is largely based online, with clients enjoying offshore teams and support services remotely. The structure allows clients to maintain business continuity despite global struggles like the Covid-19 pandemic and Global Recession, allowing companies to continue thriving and profiting.
Offshoring is beyond cost-cutting solutions, and these benefits are prime examples of what it can offer more to a hesitant client. Other advantages like business continuity and global expansion are also within reach once the partnership with offshoring firms develops.
What Challenges Should One Expect?
Offshoring solutions rely on the simple transfer of business functions to countries. Still, the process might come with complexities and uncontrollable factors. These challenges could prevent clients from experiencing those advantages.
Offshore Team Challenges
Like outsourcing, offshoring also comes with the obstacle of building a team that can mesh well for their clients. The time zone issues, communication barriers, and cultural differences will all stem from clients and offshore teams being thousands of miles away from each other. Fortunately, dedicated work shifts, established communication methods, and employee training and onboarding can help clients breeze through the challenges of working with their respective offshore teams.
Compliance Challenges
Clients might worry about quality control, intellectual property (IP) theft, IT security, and compliance issues. After all, operations are overseas without 100% supervision. Fortunately, offshoring firms are aware of these potential roadblocks, prioritizing transparency to ensure clients are always aware of what is happening from miles away. Advancements in digital communications allow people to stay updated at all times. However, it is best to prepare a legal team or an offshore manager to avoid disputes and complications when partnering with an offshore firm overseas.
Local Setting Challenges
Offshoring can be a valuable solution, but transferring operations overseas means fewer opportunities for locals. As a result, your organization might suffer from negative backlash if unemployment rates in your country rise. The loss of domestic jobs might even affect employee retention. Your staff feels dissatisfied working with foreign professionals over their countrymen. Fortunately, offshoring solutions cater to a small part of your business functions. In-house employees require proper care and attention. Rehabilitating your business reputation might also be necessary to avoid falling out with local customers.
How Will I Make Offshoring Effective for My Company?
Identifying the advantages and challenges might be enough to answer all your uncertainties and doubts with offshoring. However, it doesn’t mean that it will still be effective for your company. If you want to ensure that you get offshoring right, these are the aspects to prioritize:
Your Business Plan
Every offshoring marketing and advertising strategy will not matter if you don’t see it as part of your larger business expansion plans. Creating a solid business plan and process ensures you are walking into discussions and negotiations with a concrete strategy, making the onboarding process seamless.
Research on Offshoring Firm Target's Culture
You can identify multiple offshoring destinations that might fit your standards. However, you will still be working with other nationalities either way. Companies looking for offshoring solutions must research the culture and traditions of where they might want to set up shop. Offshoring countries like the Philippines have diverse cultures because of years of service to clients worldwide. If you feel interested in the Philippine culture, you can read up on their culture here. (link to Philippine Culture brochure landing page)
Communication Tools and Routine
Identifying an offshoring destination means creating a selection of potential offshoring partners. Those firms have specific tools and processes to help maintain effective communication with clients. During the initial talks, try to determine the operations workflow and communication setups to help you lean towards the most effective decision.
Where Will I Get Quality Offshoring Services?
Many countries specialize in creating high-quality offshore teams. However, none pose better flexibility, work ethic, and compatibility than Philippine professionals. These reasons make offshoring to the Philippines attractive.
iSupport Worldwide is one of the leading offshoring firms in the Philippines. With over 17 years of service, the US-owned company can help clients pursue offshoring solutions with all the advantages. iSupport Worldwide will also help clients overcome challenges by assisting every step of the way.
Its inclusion in the 2021 Inc. 5000 List of Fastest Growing Companies solidifies the company’s reputation in convincing clients that securing offshoring services is an excellent business decision.
Book a discovery call with us to learn more about offshoring! There are so many questions surrounding offshoring that prevent businesses from utilizing the service. iSupport Worldwide can provide all the answers you are looking for.