Local vs. Onshore vs. Nearshore vs. Offshore: Which Outsourcing Employee is Right for You?
Once upon a time, if you needed someone to answer phones, respond to mail or schedule appointments, you’d put an ad in the local newspaper or contact an employment agency. Now those options are about as appealing as only using your phone to make calls or foregoing the option to telecommute.
Times have changed drastically and so have the ways we add employees to our businesses.
However, while we may not be as limited as we once were for hiring additional help, it can still be overwhelming to think about outsourcing vital tasks. You may be wondering where to look to find a reputable call center that will treat your customers with respect. Or maybe you need a small team to guide customers through more difficult inquiries. And what about budget constraints? Is there a way that you can get the help you need without it costing an arm and a leg?
Local vs. Onshore vs. Nearshore vs. Offshore
These are all common questions, and many companies are finding the answers through outsourcing employees from around the world. You may have heard of local, onshore, nearshore and offshore outsourcing options. Here are what these terms mean and the pros and cons of each one:
Ideally, local outsourcing would be the preferred option. Hiring someone from your city or within driving distance would allow you to meet with the manager or team, review the operation first hand and you’d have the advantage of monitoring these services onsite as needed. Unfortunately, this is usually the most expensive choice. For example, if you’re an e-commerce company located in San Francisco, your rent and payroll is going to be through the roof to account for the high cost of living in this major metropolis. This is one reason why outsourcing has taken off over the last few years.
Onshore outsourcing means that you hire a company that is located in the same country that you are doing business. With this same example, it may be out of your budget to hire a call center located in San Francisco where your offices are located, but many great call centers can be found in Florida. While you don’t have the benefit of going onsite to oversee the operation, you have the advantage of knowing that the call center representatives speak fluent English, they understand American culture and they can either be located in the same time zone or within a few hours of when your company conducts business.
Nearshore outsourcing refers to hiring a company that is located in countries near your own. If you are in the United States, this can include Canada, Mexico, Central America, etc. Many times these employees have learned English as a first or second language and understand the culture reasonably well. These companies are usually not as expensive as onshore ones but have the benefit of being in a closer time zone.
Offshore outsourcing tends to be the least expensive option because the companies are located across the globe where expenses aren’t nearly as high. While India is the county most people think of concerning offshore outsourcing, the Philippines, UK, Poland and Spain are quickly gaining momentum in this industry. The downside to offshore options is that the time zones can hinder check-in calls, your employees may have accents, there can be cultural differences (which may come across as rudeness or being cold), and it may be harder to evaluate a company from so far away.
Finding the Right Company for You
Outsourcing has come a long way over the last five years. There are so many companies to choose from which has caused the industry to become more refined, reliable and competitive. In fact, a survey conducted by Statistic Brain found that:
- 38% CFOs surveyed said that their firm was currently offshore outsourcing
- 26% of CFOs favored India for outsourcing
- 31% of companies outsourced tasks to free up internal resources
If outsourcing is something that you are thinking about, here are a few questions to ask yourself:
- What is my budget?
- What tasks do I need to be accomplished?
- What size team do I project I’ll use? How many hours per day with this require?
- Who are my customers? What types of questions/requests will they be asking?
- How will a difference in time zone affect how my business is run?
Once you have these answers, you will be better equipped to review and determine which company best fits your needs. Quality, budget, skill level, communication between you and the outsourcing manager and results will depend more on the company than the location.