THE ROLE OF OFFSHORING IN BUSINESS

The apprehensions regarding Offshoring

It was a thing of concern in America that more businesses from America were opting for offshoring, and so the roles in such companies were taken up by those workers at the offshore stations, and not Americans in America. This seemed like it was translating into unemployment for Americans, and the then Senator Barack Obama (in 2008) showed concern in suggesting a tweak in policies regarding offshoring.

The anxiety of not having enough, or losing job opportunities in a particular state posed as a bit of a threat to the offshore industry. However, outsourcing is not nearly as much of a threat as offshoring is. You may wonder – “is offshoring and outsourcing not the same thing”?

Offshoring mainly has to do with setting up a workstation outside of the home-office region of the company. One of the concerns of that kind of setup is that most of the employees will be locals of that area, and not that of the home country.

Outsourcing on the other hand, is handing over a department or a part of an organization’s functions to another company to manage – typically, a company that specializes in that field of operations.

Advantages of Outsourcing

Outsourcing, like offshoring was not without their apprehensions, some organizations felt out of control and unsafe with their businesses out of their hands. However, outsourcing has proven to be a source of relief to many organizations in this modern day. It has also encouraged more specialization in the economy, where professionals can major in an aspect of business and be a brand name in that field.

Offshoring

Offshoring has also played an important role in industrialization in this time. Companies can now pitch their tents in other regions that may be better environmentally and economically suited for the job.

Some regions welcome investors, and as such encourage them with reduced taxes or no taxes at all, so as to improve the growth of their economy, boost employment rates, and industrialization. This is a role that offshoring plays in our economies, especially for growing economies.

In such economies, production costs, logistics expenses, and labour costs are usually cheaper than in the primary regions. The organization therefore saves a lot on expenses, and therefore gets more work done. Employees are better remunerated according to their ratings.

Offshoring for many regions is an economy builder, especially if onshore operations are retained alongside offshore operations.

Daven Michaels is a New York Times Best Selling Author and CEO of premiere global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! inspires entrepreneurs to build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.