Outsourcing vs. offshoring has been a long-standing and dynamic debate in the business world. Both strategies involve delegating or moving work-related tasks or functions to external entities, but their fundamental differences lie in the location of these entities. Outsourcing entails contracting tasks to third-party companies or even individuals, while offshoring involves delegating entire work processes to foreign companies, typically in countries with lower labor costs.
The competition between these approaches has sparked discussions about cost-effectiveness, quality control, cultural compatibility, and the impact on local job markets. As businesses navigate the globalized economy, the ongoing discourse of outsourcing vs. offshoring remains a pivotal consideration in strategic decision-making.
In hindsight, both solutions can work for a company. It all depends on the preference, strategy, costs, and long-term plans as deciding factors. While the first three are pretty much even for both sides, the long-term plan factor has offshoring winning by a landslide. Because in the battle of outsourcing vs. offshoring, the critical difference is how they handle training and development differently.
How Outsourcing Handles Training and Development
Outsourcing refers to the business model where a company delegates specific tasks or services to external agencies or third parties rather than handling them in-house. The primary objective behind this model is to leverage the expertise, efficiencies, and cost advantages that external providers offer. This allows companies to focus on their core competencies and helps them manage resources better, accelerate business processes, and realize significant cost savings. With the ability to tap into a global talent pool, businesses can also ensure access to the best skills and technologies available in the market.
In outsourcing’s business model, getting world-class workers will satisfy clients, especially with the significantly reduced costs surrounding the business solution. It might not be a problem for a while, but when you consider how rapidly the business landscape changes, outsourcing workers can show its well-hidden, sometimes unnecessary, flaw.
Business needs change, and with it comes the need for workers to be trained and up-to-date with whatever comes with their responsibilities in parallel to those changes. This leaves businesses with two options: find new outsourced workers with expertise in whatever adjustments organizations make or train and develop them to align with their modified responsibilities.
However, most outsourcing companies adopt a hands-off approach when it comes to the training and development of outsourced employees. They delegate the responsibility of employee development back to the client company. The client company provides outsourced workers with training programs and professional development opportunities. While this can give the client greater control over the quality and direction of training, it also requires them to divert resources from their core operations to manage these programs. It’s a balance that needs careful consideration.
How Offshoring Handles Training and Development
Offshoring is a business model where a company shifts certain operational aspects or services to another country, often to take advantage of lower labor costs, favorable economic conditions, or specific skill sets available in that region. An integral part of globalization, offshoring allows businesses to maximize their profits while maintaining the quality of their offerings. It also enables companies to operate around the clock by leveraging different time zones.
Once businesses meticulously craft their offshoring strategy to mitigate any potential risks, including quality control, cultural differences, and communication barriers, they will have a highly functional and operational business arm in a foreign country. This is while enjoying the support services to sustain the offshore division, which includes training and development for the offshore team.
Offshoring adopts a more customized approach to training and development for offshore teams. Recognizing that a cookie-cutter approach may not yield the desired results, offshoring prioritizes tailor-fit programs to meet the unique demands of operating in a foreign environment. The programs are crafted keeping in mind the company’s new standards and the need to align the offshore team’s skills and competencies with them. This approach not only ensures that the offshore team members improve their efficiency but also aids in streamlining processes, fostering cultural understanding, and reducing the scope for miscommunication or potential misunderstandings.
In the battle of outsourcing vs. offshoring regarding training and development, offshoring’s customized approach offers more long-term value for its services. The key deciding factor is if a client ever needs them, but are you willing to risk not having them, knowing how fast the business landscape changes?
How Do Offshoring Companies Create Custom Training and Development Programs?
The difference of outsourcing vs. offshoring for training and development might be enough for you to consider offshoring as the better strategy, but there is a chance you might still want to take on the responsibility yourself. Of course, having direct control of outsourced employees’ improvement can be the better choice, but only if you have the resources, time, and staff to build those programs yourself. You might not be willing to bet all your chips on the offshoring company’s training and development program, especially when you have a better grasp and knowledge of your industry and already have developed plans for it.
Still, you might want to know how offshoring companies create those educational paths for offshore teams. Here is a step-by-step process:
Understanding Specific Needs
The first step in creating a practical training and development program for offshore teams is understanding their specific needs. To do so, offshoring companies must assess their current skill levels, understand their work culture, and identify improvement areas for offshore teams.
Leveraging Technology for Training
Next, incorporate the use of technology into training. Thanks to advancements in digital learning platforms, offshoring companies can provide interactive and engaging training modules. These platforms offer features such as video tutorials, online seminars, and even virtual reality scenarios, which can be accessed anytime, anywhere.
Regular Updating and Assessment
The offshoring company’s training program should not be static. Instead, it should regularly evolve to keep up with industry trends and technological advancements. Regular assessments and evaluations should also be incorporated into the program to gauge its effectiveness and make necessary adjustments.
Promoting Cultural Sensitivity
Working with offshore teams often means working with people from different cultural backgrounds. Therefore, incorporating cultural sensitivity training into the program is vital. This training not only promotes a better understanding of cultural differences but also equips your teams with the necessary skills to navigate potential communication barriers or misunderstandings.
Those steps are the foundation of training and development programs for high-powered offshore teams. This is why employees consider offshoring companies as ideal to work for. However, they will always start with conversations between clients and the offshoring company’s client services. Clients will always have control over the direction in which the training and development programs should go, so every initiative will always start from there. As a result, clients only have to flesh out a premium fee for the initiatives and do not have to directly dedicate resources and money to in-house training and development. This allows companies using offshoring solutions to save not only on labor costs, but also training and development expenses.
iSupport Worldwide's Focus on Training and Development Goes Global!
iSupport Worldwide firmly believes that the aspirations of business owners to succeed and grow are limitless, and we’re here to ensure that your offshore team is aligned with those dreams! Our training and development division, rebranded as Global Learning and Organizational Capability (GLOC), is dedicated to helping clients get the best out of their offshore teams, ensuring that the existing teams stay on top of their respective careers.
GLOC provides customized learning engagements that can ensure your offshore team is always high value, regardless of the changes the business landscape experiences every day.
If you want to build an offshore team and take advantage of the customized training and development programs they can get, book a meeting with us today!