Offshoring refers to moving business processes or operations to another country where labor costs are lower. It allows companies to reduce expenses by employing staff at lower salaries abroad compared to domestic wages. While offshoring is similar to outsourcing, offshoring typically refers to moving services overseas by establishing foreign subsidiaries, whereas outsourcing can involve either services or manufacturing. The main reasons companies offshore include lowering costs, gaining access to larger talent pools, and improving agility, customer satisfaction, work-life balance, and attention to detail. Offshoring has contributed significantly to globalization due to businesses interacting across borders to take advantage of wage disparities.

1. WHY GO
OFFSHORE?
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2. Offshoring is a term used in economics
and finance to describe the practice of
moving a business process from one
country or region to another. In logistics
terms, it is an arrangement in which an
organization establishes a subsidiary foreign
branch or plant that performs certain supply
chain functions close to where they are
needed at a much lower cost than if these
operations were performed in-house.
What is
offshoring?

3. In general, offshoring may result in
higher unemployment levels in the
home countries. It also needs to be
highlighted that the term
“outsourcing” may also be used to
describe the foreign direct investment
when a company establishes a
subsidiary in another country.
The difference here is that offshoring
usually refers to outsourcing of
services, while outsourcing can refer
both to service and product-related
transactions.
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Offshoring is similar to outsourcing. However, there are several
distinctions between the two:
In many ways, Offshoring has been a
significant contributor to globalisation
because it is an essential component
of how businesses interact across
national borders. In comparison to
globalisation, the main reason for
offshoring on such a large scale is
wage disparities between different
countries.
In general, companies from developed
countries take advantage of this
opportunity by relocating their
operations to these lower-wage
locations.

4. The process is often called
“offshoring” because it consists of
sending a job overseas to a company
that may be in a different country.
Offshoring has become popular as
more and more companies either
outsource some of their work or move
entire business divisions to another
country with lower costs.

5. Reasons to
go offshore

6. Businesses can
reduce expenses by
employing staff at
lower salaries than
they would have to
pay at home.
1) Lower Costs:
By focusing on what
makes them
competitive,
businesses can
advance their core
competencies.
2) More Time To Focus
On Core Competencies:
Using offshore labour
pools can give
businesses access to
large numbers of
talented people who
might not be
adequately
represented in the
domestic workforce.
3) Talent Pool:

7. In a highly competitive
market, companies
need to be able to
adapt to change
quickly. If a client has
an important project
that needs doing
immediately, the
company needs to have
staff available to do that
work or risk losing the
client.
4) Agility:
By giving customers
and clients more
access to support
teams they may see
higher levels of
customer satisfaction
as problems can get
fixed faster.
5) Improved Customer/
Client Satisfaction:

8. Cultural differences
can sometimes be a
benefit because
someone who is not
so familiar with the
way things are done
at home might take
more care over their
work.
6) Greater Attention
To Detail:
When businesses use
offshore labour pools
they can support their
staff around the clock
without having to build
more office space or
hire extra staff which
means employees have
less stress and greater
work-life balance.
7) Improved Work-Life
Balance:

9. Now that you have an idea
about offshoring, you can use
your newfound knowledge to
better evaluate companies that
might be able to help you with
this process.
Just remember that offshore
outsourcing isn’t appropriate for
every job so research your
options thoroughly so you don’t
have any unpleasant surprises.