Advantages and Disadvantages of Offshore Outsourcing

With the ever changing global economy and the growing expenditure of maintaining in - house resources for minor business functions, lots of businesses today, either small or large, often opt for offshore outsourcing in order to trim down operational expenses and still enjoy excellent ROIs. Although some critics may contend that this type of business model can kill the local economy due to the massive reduction in inshore jobs, but in order to succeed in a cutthroat business, companies need to balance the needs of their customer and growing market demand and still be able to enjoy a profitable venture. And with the growing number of companies offering competitive offshore outsourcing services, even small scale businesses have no choice but to consider their options in offshore outsourcing.

More often than not, most of the countries where offshore outsourcing abounds have fewer regulations to meet, not to mention the lower costs of labor as compared to inshore workforce. But with all the advantages offshore outsourcing has to offer, offshore outsourcing services some major disadvantages. The disadvantages of offshore outsourcing services are among the reasons why offshore outsourcing is not a business model for all. For one thing, offshore outsourcing can significantly damage an economy and in the U.S. alone, several jobs are permanently lost and there are a growing number of skilled workers that need to learn new skills and obtain a new field specialization in order to qualify for the other types of jobs left intact by offshore outsourcing.

And because of the introduction of affordable yet highly competitive overseas workers in the job market, wages significantly decreased so in essence, local workers need to compete on a global scale and so do other small businesses that rely on subcontracted jobs of other much bigger corporations.

For large corporations that rely on offshore call center outsourcing services, they have to bear with decreased quality control and reduction in product development. When a company is into offshore outsourcing, the business no longer has control in the quality of materials used on a particular product, as well as the quality of its workmanship. In the United States, this can increase the company’s potential for various product related lawsuits and liabilities which can also potentially damage not only their names but their entire business structure as well.

The communication gap between the country where the service is being outsourced and the company that required the service can also negatively impact the business. This is considered as among the biggest disadvantages of offshore outsourcing and while the growing innovation in technology significantly helps in reducing this drawback, still companies have to properly evaluate their needs for offshore outsourcing and determine if they really need one or the local workforce can satisfy their company requirements.