The Benefits and Misconceptions About Offshore Labour
By Justine Gado | Oct 16, 2019
Offshoring has had a long history of ebb and flow. Practised in many countries all around the globe, it was and still highly impact economies on a good light. Whether in the assistance of creating more jobs that decrease a country’s unemployment rate or embracing the technologically advanced era, outsourcing has been recorded to do more good than bad. With the continued success of this business strategy, global entrepreneurs in all fields utilise the service.
On the other hand, the growth of the internet has played a huge part in all of this. As it connects people from all around the world despite their timezone differences and language barriers, employing an offshore staff from any part of the world became possible. Not only big enterprises but also small-medium businesses have exercised offshoring.
In Australia, offshoring in the Philippines has been a popular trend for years with more small and medium businesses looking out for experienced talents in that country.
Benefits of Offshore Labour
Generally, offshoring has already proved how effective it is as a business strategy. And for the past years, hundreds of Australian companies have chosen to offshore some of their tasks to a developing nation such as the Philippines. This year, it has re-emerged as a significant offshore player with a market value of $23 billion, according to arnnet.
Although offshore labour has been quite a thorny issue since it created a huge impact on most small businesses alike.
Here are some of the benefits that you’ll get when you choose to offshore your labour force:
- Business growth. Offshoring allows you to get access to a huge pool of young and experienced talents from all over the world. These fresh minds will provide you with new perspectives and a different approach to strategies, enabling your business to focus solely on growth.
- Access to international talent/s. Tapping a huge pool of talents all over the world improves the chances of employing an impressive team that can work best for your desired budget and schedule.
- Availability. Having a support team from a different timezone enables your business to function 24/7 and be there for your clients whenever they need it. This increases the competitive edge of your business and results in better customer experience.
Other than all these reasons, many Australian companies also consider several factors that contribute to their decision to offshore. These includes:
- Cheaper labour costs
- Improved output
- Lack of industry expertise
- Availability of highly educated offshore business specialists
- Freedom to concentrate on core business concerns
- Excellent work ethics
- Skilled individuals
- Staff proficiency in English
If there is a positive side to offshore labour, then probably there is a negative side too. Misconceptions, as we call it. With the right angle and nudge, these misconceptions could change everyone’s perception about basically everything about offshoring.
Let’s learn about some of the most common offshoring misconceptions that need debunking. Here are those:
1. Offshoring reduces jobs locally.
Throughout the years, most people perceive that offshoring means stealing the locals’ jobs. But contrary to that fear, offshoring in other countries is a business strategy that helps sustain the onshore teams. For example, a startup company offshore 2 or 3 of their tasks to a low-cost foreign country where they can save a huge amount. Now, offshoring enables a business to reduce costs with all kinds of expenses as well as gives them time to focus on the core services. By doing so, they’ll gain more time to generate bigger revenue. When the business grows, they’ll be needing more in-house staff, thus opening more jobs for the locals.
A recent study on the labour market effects of offshoring to multinational companies revealed that “a greater offshore activity modestly raises net employment by companies.”
2. Offshoring is cheap labour.
On developing countries like the Philippines, offshoring generally means that the wages are lower than of a first-world country, say for example – Australia. Normally, it is the cost of living in a particular country that determines the amount of pay an offshore worker receives. Even if that’s the case, it doesn’t change the fact that countries like the Philippines produce highly-educated university graduates annually. These graduates are tech-savvy, proficient in English and are competitive in their specific fields. Offshore staff from this country can fulfil the skill requirements that your business may lack from the local workforce, at a more cost-effective price.
3. Offshoring provides poor working conditions.
Some BPOs overseas have the reputation of treating their workers like robots. In the earlier years of offshoring, there was once a misconception about building offices on cramped up spaces with employees who barely got up of their seats. However, to be able to stay in the competition, BPOs have to provide a comfortable working space and stable infrastructure. Also, the working environment should be strong and fun to keep the staff satisfied and happy. With the continuous advancements in technology, it is impossible to keep up with your competitors if you can’t provide the same advanced equipment.
Offshore labour has been quite an issue for countries like Australia. This has become so big that it even attracted a lot of media attention. However, the massive job losses that have been reported due to offshoring jobs in developing countries were never quantified due to the lack of evidence that supports the claim.
Nowadays, the influx of Australian businesses that chose to offshore their labour on countries with low cost of living continuously grows in number. These companies, either small or medium embraced the idea of offshoring to help expand their businesses that will, later on, create more local jobs.
So, neither of the circumstances can prove that choosing to offshore your labour is a good nor bad decision.
Considering offshoring? Check out Dynamic Business Outsourcing Solutions – one of the fast-growing Australian offshoring companies in the Philippines with 4 years in the field. Reduce your wage costs up to 70% when you partner with us and get a free consultation with our very own CEO/Founder.