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Offshore Outsourcing Services – How It All Started

For decades past, outsourcing has been going on. Then, along the line, offshoring came into the scene. This is a level of outsourcing where overseas workers are hired to perform virtually all business functions. Offshore outsourcing services are widely sought-after by organizations of different sizes. Cost reduction was the driving force behind offshoring at the onset. Today, other benefits such as quality service, access to best talents, tax incentives, risk sharing and overall organizational growth are increasingly attracting companies to offshoring.

For several years, organizations spread their business tentacles, buying over other companies and expanding their conglomerates. At the onset, the businesses of these companies were related. The acquisitive tendency was massively driven by profit motive and desire to be the leading organization. But, it wasn’t long, the weight of the acquired companies became much on the parent companies, then the conglomerates came crashing. Consequently, organizations started switching back to their core activities or businesses.

Then, these organizations found out they could reduce the bulk of their business functions by using the services of more efficient providers. Besides, it is also very cost-effective to hire out more of those functions. Therefore, different business functions such as payroll processing, customer call centers, clerical functions and recruitment tasks were increasingly delegated to external firms – this is pure outsourcing. Eventually, oversea workers emerged in the scene, offering the best possible services in various business functions at the lowest possible cost relative to in-country employee hiring cost. Soon, Offshore outsourcing services became more popular than in-country offshoring.

Obviously, it makes a lot of sense to outsource. Several specialized offshore service providers made their services available to tons of client companies at highly reduced costs compared to carrying out the same business functions in-house or within the country (in-country outsourcing). This arrangement (offshore outsourcing) benefitted both offshore workers and their clients.

Offshore Outsourcing Services – The Current Trend

In recent time, US-based businesses and organizations have increased offshoring practice. This is also true about some of the civilized nations. In the United States today, the so-called white collar jobs are outsourced massively to relatively cheap labor. The top offshore locations include Philippines, India, China and others. Interestingly, there are tons of experts in different business sectors offering better quality services than their counterparts in the developed countries.

According to a recent survey, it would cost 50%-80% more to hire a US worker to provide the same (or even lower quality) service just as an offshore worker would do. The offshore workers who are usually highly trained experts in their field will charge about 20 – 30 percent to deliver quality service.

Therefore, companies are saving massively by contracting offshore outsourcing services. This is why several companies in the United States are expanding by the day. They are simply re-investing the massive savings from reduced labor cost.

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

9 Responses to “Offshore Outsourcing Services – How It All Started”

  1. The American and other Western nations have so much to benefit from business processing outsourcing. For one, it heightens the level of competition considerably

  2. I think the development and entry of other countries in Asia and Africa is good as it will keep the already established ones in the West on their toes. Great article Daven.

  3. This information is quite useful for all who plan to go into this kind of business, I inclusive. Thanks Daven.

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