offshore outsourcing

Offshore Outsourcing: Your Ultimate Guide For 2024

In today’s world, businesses of all sizes face competition. To stay on top, they not only want to have the best product, but they also want to cut development costs to save more money. That’s why more and more businesses are turning overseas, to hire offshore outsourcing team members.

In this article, we’re going to give you a complete guide to offshore outsourcing.

We talk about its benefits for business, the most common industries, and where you can find the best offshore talent in the world.

Offshore Offshoring Definition

Offshore outsourcing is the hiring of external workers or a small team to perform work outside the customer’s country. It allows you to access the experience of a global talent pool and focus on key aspects and the strategic side of your business.

Most companies prefer offshore hiring to benefit from cheap labor, easy and simple taxation, and access to specialized talent at low cost. There are 4 types of offshore outsourcing:

  • Information technology outsourcing (ITO)
  • Business process outsourcing (BPO)
  • Outsourcing of knowledge management processes (KPO)
  • Offshore software development

The difference between offshoring, outsourcing, and offshore outsourcing is important.

Examples of offshore outsourcing include helpdesks, call centers, and accounting services for a company’s internal operations.


Why You Should Go Offshore

First, offshoring will indeed bring savings in labor and operating costs. The main reason why companies choose this way of working is to reduce the cost of labor.

This is a new market where you can introduce your company and create a local office to reach even more target audiences outside the country. It is also a way to broaden the horizons and expertise of your employees.

Let’s imagine you own a small photography studio and you need helpers to retouch millions of photos. It will cost a fortune to hire people nearby. But you can use resources from other countries and pay cheaper. But most importantly you will get the same result or even better!

offshore outsourcing

Lviv, Ukraine

Offshore Outsourcing: 12 Main Benefits

So, let’s dwell on the advantages of using the offshore method in more detail:

#1. Cost Savings

The first and perhaps the most important.

Offshore cooperation in product research and development can save a company a lot of money.

You can seek help from countries where the creation of certain products is cheaper. Not because the project will be of lower quality.

You will cut down on the main costs because workspace, equipment, and employee insurance automatically become unnecessary. It’s because the general standard of living in other countries may not be as expensive.

#2. Cut or Eliminate Office Costs

Many offshore locations can be cheap.

In megacities, there is a simple rule: If wages are high, then renting an office or setting it up will also be expensive.

Therefore, hiring a foreign team for operational purposes will be cheaper in this regard.

#3. Tax Benefits

One of the big advantages of offshoring is that this type of work can provide many tax benefits.

This, in turn, will allow you to save even more money.

#4. New Market – New Acquaintances

You can choose offshoring for one project. But there will always be experts nearby who can help you with the next similar project.

In addition, this is a good opportunity to get acquainted with a foreign market and study its challenges and risks.

#5: Access To The Best Talent

In today’s world, the Internet gives us access to a large list of experts from all over the world.

And you can choose the best ones.

Your work will be done much faster because the “whole world” will be working for you.

#6: Time Zone Coverage

Your clients will be satisfied with round-the-clock service, and you will be able to take a break from work at night. This is exactly the advantage outsourcing gives you. After all, in some countries, it’s daytime, the time when you and your employees are sleeping. People there are awake and ready to work for you.

#7. Focus On The Core Business

Let’s say you are a furniture manufacturer.

Do you want to be distracted by IT or accounting? All you want is to get the most out of your time and not waste energy.

The obvious solution is to outsource it overseas.

You or your employees don’t need to multitask, because in most cases it’s inefficient.

Offshore outsourcing gives you access to IT or accounting experts and you can focus on your core tasks.

#8. Reduced Labor Costs

But employee costs are not just about salaries and office rent. Many other details may not be visible at first glance. When you hire specialists, you also need to take into account the costs of their training and continuous development. Who will train them? And what if an employee decides to quit and join your competitor?

The entire hiring process gets more cost effective when you go abroad.

#9. Speed & Efficiency

When you have a large project, it can get stuck in time. Often, a fresh approach, new perspective, and energy can help break through the fog. This is especially true for projects that need to be implemented in a very short time frame.

#10. Flexibility

Outsourcing is very flexible when it comes to payment – it’s quite simple: you pay for what you need – no extra bonuses or unnecessary costs.

#11. Control

A big advantage of offshoring is that the company does not lose control over the product or service development process. Some processes are quite fragile, time-dependent, and largely dependent on the outsourced specialist. In such situations, offshoring ensures that control and responsibility are taken seriously and are secure.

#12. Fewer Regulatory Hurdles

With a mountain of legal regulations and procedural paperwork, doing business can get bogged down in red tape.

Companies can choose an environment where they feel they can move faster and bring their product to highly competitive markets more quickly.

Offshore cooperation removes this headache from you.


offshore outsourcing krakow poland

Krakow, Poland

Offshore Outsourcing Risks

Although it is an advantage, offshore outsourcing can also have risks due to time zone differences.

If you don’t find a service provider that works on the same shift, collaborating with offshore teams can become problematic.

The second reason why companies fail to get the most out of partnering with a third-party provider is that they rush headlong into offshore outsourcing without carefully weighing all of its drawbacks.

These include:

Language & Cultural Barriers

The cultural gap is the main obstacle to seamless coordination with remote specialists. Each country has its own culture and language preferences, and you need to know how people there do business to communicate effectively with them.

Hidden Costs

Ongoing costs associated with renegotiating contracts, modernizing infrastructure, currency fluctuations, and hiring specialists are not obvious at the outset. If you don’t take them into account at the initial stages, they can dramatically increase your budget for hiring virtual assistants and other team members.

Brand Damage

Cultural missteps missed deadlines, and quality issues associated with working with amateurs can damage your image and make it difficult to repair.

Poor Quality

The workforce in developing countries faces enormous work demands and is paid low wages. This makes it difficult for staff to invest deeply in your business. This can lead to the quality of products and services taking a back seat. Choose only the best and most trusted country for offshore outsourcing.

Lack of Strategic Separation

Companies prefer the physical location of the supplier rather than a standard method of determining which processes they should keep in-house and which ones to outsource. Choosing the right location abroad is undoubtedly crucial, but only after separating the core tasks from the non-essential ones.

Inaccurate Risk Analysis

Firms do not take into account all the risks associated with transferring their processes abroad.

Most professionals conduct a simple cost-benefit audit that does not take into account the leverage that the BPO provider gains when companies hire them to handle their operations.

In addition to the aforementioned problems that can arise with offshore outsourcing due to poor planning, there are risks specific to information technology-related services. However, the right hire can help avoid all of these problems.


offshore outsourcing macedonia

Ohrid, Macedonia

Offshore Outsourcing Services In Demand

Below are the services that companies most often consider for offshore outsourcing.

Accounting

Since accounting tasks are very process-oriented, they are very easy to document and send to an outsourcing partner abroad for execution.

The right outsourcing partner with accounting experience already knows the accounting, tax codes, and other financial aspects in your country. Often, outsourced work includes a quality control/approval phase that is performed by an external organization, so you know that all the numbers processed will be accurate.

IT Services

Web developers and software developers work with code, and fortunately, coding is done in the same language around the world.

Offshore software development services can help your business create applications for mobile devices (smartphones or tablets).

Meanwhile, web developers can build and maintain your website with ease. Companies with an online presence benefit from offshoring IT services abroad. For example, hiring and training a software developer can be expensive in the United States.

By outsourcing your website and software development to an outsourcing partner, you have access to a large pool of skilled engineers, often at significantly lower prices than you would pay in your home country.

Customer Support

Call centers that provide uninterrupted customer support are crucial for businesses.

However, it often becomes difficult for small businesses to afford to run their call center, as it requires a huge investment in technology, software, and employees.

Therefore, companies can outsource the process of handling customer and client requests to a service provider.

Front Office Services

Front office tasks are the administrative functions that keep your business running smoothly.

This includes customer support, marketing, accounting/bookkeeping, HR, and more. While it can be helpful to keep a physical employee at the front desk in the building, many of these tasks can be handled through offshore outsourcing.

Outsourcing these tasks to another country will allow you to focus on what you do best – growing your business.

One of our team members, Maria, has some crazy stories from her time as an outsourced executive assistant. Check it out below:


What to Look for Before Turning to Offshore Outsourcing

Start by assessing the nature of the work you may be delegating.

Does it include IT development, manufacturing, or back-office support functions such as accounting? Having a clear understanding of what exactly needs to be outsourced will help you choose the right talent.

For most firms, the physical location of the service provider outweighs any other considerations, but infrastructure is no less important. If the provider is working in a makeshift office without proper facilities, their work may face productivity and efficiency issues.

Therefore, before signing a contract, it is worth finding out whether the service provider has decent working conditions and whether they invest in the latest technology to support their customers.

A great way to evaluate this is to familiarize yourself with their portfolio and workflows through a hiring agency. So, you should choose a specialist who will support your functions. Failure to consider the above questions can lead to huge financial losses and risks.


How To Find & Hire An Offshore Outsourcing Partner

Many business owners and team leaders simply don’t know where to start looking for an outsourcing specialist.

But we can help you.

HireUA has a pool of talent working in all industries, providing all types of services. Our team will connect you with specialists who can handle a huge workload, or with experts who will provide valuable insights for your work.

Book a call now so we can find out what you need from an outsourcing partner and start looking for your ideal offshore outsourcing candidate.

Offshore Outsourcing: Closing Thoughts

There are challenges, but there are also solutions.

Offshore outsourcing is crucial for modern businesses to survive in this competitive environment. It involves delegating work to third-party specialists and guarantees quality.

In addition, offshore outsourcing saves time, money, and other resources.

Thanks to agencies like HireUA, employee outsourcing can become easier and more hassle-free.

Book some time to speak with us today.

— Anastasia

PS: Here’s a list of 6 other roles you should consider outsourcing.

About The Author

Anastasia Marinich

Anastasia was born in Odesa and realized at an early age that her work should be creative & enjoyable.

While studying marketing in her hometown, she moved to Germany and continued her education at 2 universities at the same time.As the saying goes "Choose a job to your heart's content and you won't have to work a day of your life!"

Anastasia obtained a degree in Art and has a knack for it. She takes the same approach to writing. Each text is like a picture with a special message and mood. Everyone will find something useful for themselves!

Today Anastasia lives and works in Germany. She travels a lot, practices Ashtanga yoga, learns new things, and continues her creative journey with the HireUA team!
© 2020-2023 Hire UA LLC. All Rights Reserved.