Outsourcing Offshore – Is It Worth It?

Outsourcing Offshore – Is It Worth It?

Daven Michaels

Daven Michaels

New York Times Bestselling Author, 30-year business veteran, and Executive Chairman of CurrentC Power.

If I have a dollar for every time someone asked me how valuable offshore outsourcing is….well, as a matter of fact, I do (happy face).

First and foremost, I must say that the cost benefits of offshore outsourcing are not being overstated. With outsourced employees in countries such as the Philippines commanding just ten to twenty percent of the wages that US based employees earn; there is certainly no doubt that you get to save big on employee expenses.

Think about it, you will not have to worry about paying your outsourced employee workers comp, employee insurance, retirement benefits, holiday pay and most importantly, you do not have to put up with a habitually late employee who knows how to spin a good excuse. If you are outsourcing information technology to an offshore location, you do not have to keep investing in software and hardware equipment, you do not have to keep shelling out money in order to upgrade and maintain your company’s hardware and software infrastructure. You also do not have to loosen the purse strings in order to keep training in-house software developers on advanced technologies.

In my experience, I know that many company owners think very little of the real cost involved when it comes to employing in-house staff. When you hire an employee who gets a base salary of $60,000; then expect these additional expenses:
• Admin expenses – $10,000
• Training/orientation expenses – $2,000
• Benefits: 401k, medical, dental plan – $19,500

This adds up to $91,500 per year; a 60% increase on initial estimate.

Another concern that a lot of people have expressed about offshore outsourcing is that there are huge cultural barriers. It is no mistake that a large number of multinational companies have chosen the Philippines as their offshore outsourcing location. Filipinos have very superb English language skills and are also highly trained technical labor force. An average Filipino understands the American way of life and will have no problem whatsoever communicating the “American way”. You will be glad to know that there are a lot of Filipinos that speak really good English without having a single tinge of native accent, which could give away their nationality. There are many good project managers in offshore outsourcing companies that have been trained to facilitate communication in order to define and clearly track objectives and results.

As long as you outsource your company’s work functions to a reputable offshore outsourcing company, you will have nothing to fear.

Whether you choose to believe it or not, outsourcing is now a vital part of global business practice, and if you are not taking advantage of outsourcing; then you are doing something wrong.

Daven Michaels is an award-winning outsourcer and author of the book, ‘Outsource This!’ Daven has been honored more than any other individual or outsourcing organization. You can get more information on outsourcing by visiting www.123Employee.com

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