Offshore Employee Outsourcing
Do you know the most frequent response to a question about whether it is better for an employee to be based in India or the United States? The correct answer is neither. The best option would be for that employee to work offshore, out of either country. This is especially true for businesses with low-cost labor and high-value tasks, as well as those who take advantage of outsourcing in other ways.
For instance, outsourcing can also include providing remote services such as customer service or data entry work. It can also include sending staff on business trips abroad so that they don't have to travel from their home country when it comes time to visit family back home after they get sick of being away from them all day long. The same is true of training foreign workers for higher-level positions, attending client seminars or conferences, and more.
Of course, outsourcing can also be as simple as hiring an Indian or American employee overseas through a recruitment agency. The most important thing to remember is that if you retain your employees in the United States at home base, it will be more expensive in terms of both time and money. Conversely, if you send them to India or another foreign country, it will not take up any additional space inside your facility and will require less effort on their part. You may have to pay for travel expenses - but you can save passport fees in most cases.
According to the study, Irish workers spend approximately 25 percent of their professional time abroad, living and working in 16 different countries. Over their careers, many will spend 10 years working overseas, which means that on average they will spend one year living in a foreign country for every five years spent at home.
It is no secret that Ireland is one of the most popular places for workers in this context, but what most people do not realize is that there are plenty of other options as well. For example, India is also a great place to hire workers and outsource because they have the same kind of low-cost labor force that Ireland has - yet the cost of living is much cheaper. This means that companies are able to get the same benefits without having to worry as much about paying for housing. Additionally, the security and hygiene standards here are much more accommodating than in many other countries, which will appeal to many employers.
More importantly, a lot of companies who have been outsourcing work in India for years now find it easier than they would have imagined when they started - even if nothing else wise has changed with regards to their business model. According to one survey, companies who outsource in India do so for a variety of reasons:
For these reasons and others, several industries focus on outsourcing in India or other countries. Some will outsource their data entry or customer service work and send it to India, for example. Others might outsource their business travel needs and maintain a base in Ireland for that kind of work. One business trip a year is often better than nothing at all, which saves both money and time.
There are a myriad of different ways to outsource in India, but the most common way would be to have all your employees work from home - either through free phone lines or online services such as Skype. This makes things much easier on them because they don't have to worry about transportation or travel expenses such as hotel stays. It also makes transporting items such as computers or other electronic equipment much easier.
Some companies may charge for virtual phone calls, but there are many ways to get around this, including free Skype credits and calling cards. This is especially important for those who have a lot of employees or need to use a lot of international numbers.
More and more companies are beginning to see the value in outsourcing their customer service work to India as well. Several different services will allow companies to maintain one call center from India but with a completely different staff on the other end - meaning that they can quickly handle any change or new development within their customer base. It's also a much cheaper way of doing things than maintaining systems in both locations, whether you are based in Ireland or somewhere else.
Data entry, however, is a different matter entirely. Data entry outsourcing is often frowned upon in the business world because of its lack of value and because it does not require any specialized skills. Not every company can outsource their work to India or another offshore country. Even if they did, it would probably cost less to hire someone local who is just as good (if not better).
As mentioned earlier, those who are able to take advantage of this kind of service will benefit greatly from it - especially if they do not want to physically move all their employees overseas. There are also a lot of ways to outsource data entry work that do not cost much, which has led to a recent spike in the practice.
Some people think this is a bad thing for the U.S. economy, but it's not. The best way to lower costs and save time is to allow these companies to spend money on things that actually make a difference in their business instead of paying for something that doesn't deliver real value any more. This saves them money and allows them to keep more of their operating margin - which is important in today's world where earnings are not rising by leaps and bounds as they used to be in earlier years.
The trend to outsource data entry services and help them handle more work from India is solid. One firm began with a small office in Ireland in the mid 1990's and has gradually integrated more of its operations into India. As a result, it now has over 500 employees based in India and only four employees located at home base in Ireland.
This trend corresponds with the increase in outsourcing efforts by many companies - from all types of industries - that are looking to save money by using offshore workers instead of having to hire them for jobs that they really do not need anyway. It will be interesting to see what happens as these numbers grow.
Chapter 9: The Future of Offshore Outsourcing
"The function of leadership is to produce more leaders, not more followers." - Ralph Nader
As we have discussed in the previous chapters, outsourcing has become one of the most powerful value creation tools that all businesses need to implement in order to succeed in today's globalized and competitive business environment.
According to a recent study, companies that outsource their business operations and functions are able to create between 16% and 18% additional value after just three years of working with offshore outsourcing providers.
Conclusion
The question you should be asking yourself is not "why outsource?" It's "how to start doing it?"
And the answer is: everything that you need is right here in the previous chapters.
In this book, we have covered all the basic concepts and the most common best practices in outplacement of professional services, which are also relevant for several other scenarios involving consultants - whether its for BPOs or call centers or any other type of service provider.
We have shown examples on how to choose a firm offering offshore outsourcing solutions and how these solutions can improve your business model by enabling you to cover corners that you would not be able to do without outsourcing.