The science of productivity is a hot topic in the business world these days. In a world where small startups are overtaking giant corporations that have years of experience, being fast on your feet is an essential trait to success.

 

Thanks to the convenience brought by many inventions like the Internet, businesses can now work with employees and consultants from all over the world, an innovation which previous generations couldn’t afford before.

 



And today we’ll talk about one of these innovations that has a huge effect on productivity, which is offshore outsourcing.

 

What is offshore outsourcing?

 

Basically, offshore outsourcing refers to the practice of hiring a third-party company from another country (hence the term offshore) to do specific business processes like payroll and HR.

 

It was meant to acquire more affordable labor just as multinational corporations would hire BPO companies in countries like the Philippines to handle their customer service operations.

 

Today, the outsourcing industry plays a big role in the global economy. In fact, Deloitte’s latest study on global outsourcing reveals that outsourcing will keep growing not only in the IT sector, but also in finance, HR, and a lot of others.

 

In the Philipines alone, outsourcing has exploded since its early days during the 1990s and has become one of the most dynamic industries in the local economy since then.

 

Now that we know that offshore outsourcing is a big deal to the global economy, how does it relate to increasing productivity in businesses?

 

Why do businesses choose offshore outsourcing?

 

The common reason for choosing offshore outsourcing is to save money due to the cheaper costs of labor. According to statistics, about 59% of businesses that outsource say they do so because it is an effective cost-cutting tool.

 

While it’s effective in bringing costs down, one of the key findings in the Deloitte study is that the real value of offshore outsourcing is in the improved efficiency and productivity that come with the lower price tag.

 

Another study published in 2005 found that offshore outsourcing positively affected productivity in the Chinese manufacturing industry. This study, along with many others, prove that the business structure of offshore outsourcing bolsters the competitive advantage of many industries in the long run.

 

How to get the most out of offshore outsourcing?

 

Not every business is fundamentally alike, and similarly, every offshore outsourcing strategy should be tailored to fit the needs of your business.

 

The key to making the most out of offshore outsourcing is knowing when it’s most practical to use for your business. As mentioned, it’s not simply a tool for cutting costs.

 

One of the advantages of having outsourced employees than an in-house team lies in getting access to a wide range of specialized skills like IT and web development for a more affordable cost in the long run.

 

For example, you may choose to do the payroll yourself, but is the effort you’re spending on that activity giving out high ROI?

 

Another significant factor is collaboration. The outsourcing company you choose is a major factor that could affect how your business productivity will improve, so make sure you choose wisely.

 

For instance, if you outsource telemarketing, you may want to pick a company with years of experience and a track record to prove they’re good at what they do, rather than a new company that offers cheaper rates at a possibly lower quality of service.

 

Takeaway

 

Deciding to implement offshore outsourcing in your business is a strategic move that could not only save you money but also improve productivity. There are hundreds of outsourcing companies to choose from, so before making a decision, it’s important to plan ahead to ensure that you’re getting the right fit for your business.

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