How Offshoring Creates More Domestic Opportunities

Offshoring jobs might be a controversial talking point, but in reality, its benefits to domestic organizations create additional opportunities for employees

Companies all over the United States and the United Kingdom use offshoring to meet their employee needs instead of hiring domestic workers. In the year 2018, for example, 14.4 million foreign workers were employed abroad by U.S. multinational enterprises, according to the Bureau of Economic Analysis.

On the surface, these numbers suggest that 14.4 million jobs were ripped away from American workers and sent to foreign nations. There’s much more to the situation than that, however, because offshoring specific jobs can actually improve productivity and create more domestic opportunities.

Here’s a look at some ways in which offshoring benefits American and British workers.

Key takeaways:

  • Companies are offshoring at significant levels.

  • This trend could mean fewer American and British jobs but greater economic opportunities. 

  • Increased productivity creates better efficiency. 

  • Offshoring helps companies grow by filling hard-to-fill roles.

Increased productivity

A primary way that offshoring aids American and British workers is by increasing productivity within the organization. Those who work for a busy firm know how challenging it can be to find and keep employees and offshoring makes it far easier to fill these gaps.

The result is a more efficient workplace where existing staff isn’t overburdened by jobs the company can easily fill internationally. There’s also the idea that increased productivity can open organizations up for potential expansion, which adds more jobs to the domestic job market.

For example, a manufacturing company could send some jobs overseas while it attempts to grow its international footprint. Since the organization can make its goods faster and cheaper through offshoring, it can expand production even further.

From there, we could see the firm make new hires within its corporate headquarters and even throughout its domestic logistics operations because these goods will need to reach their destinations. Research published in the Washington Post notes that every 1 percent increase in offshore jobs brings a 1.72 percent increase in domestic employment. It also pushes American workers into more complex, higher-paying jobs overall. The result is a net benefit for domestic workers and the country’s economy as a whole.

Reduced labor costs

In addition to increasing productivity, offshoring allows domestic corporations to reduce their labor costs. On the surface, American and British workers might not see this trend as a benefit because they won’t immediately capitalize on these cost savings. These employees don’t necessarily care if the company is saving money on labor expenses until they see a personal benefit. It could create higher-paying work in the future, though.

Much as with increased productivity, lower overall labor costs free up capital for businesses to grow. As they expand, they will have more need for staff in well-paid departments like accounting, marketing, and HR. 

BPO companies allow managers to augment their teams when there is excess work to be done. For example, a marketing department might hire an offshore assistant to boost their team’s capacity and productivity by taking on administrative tasks. Or a small business could hire an accounting assistant to handle bookkeeping and payroll. 

Company growth

Offshoring helps companies and their employees grow and thrive by staffing hard-to-fill roles. They might be hard to fill because of lower wages or a lack of available talent. Offshoring, therefore, helps with hiring in general. For example, a company may hire software engineers in Manila because they cannot compete with the U.S. market.

This idea can be applied to more skilled employees, too. For example, when offshoring app development, a firm can make its goods less expensive because of the cost savings from the application’s production. The savings then free up more money domestically.

A thriving local economy drives more business, creates more jobs, and continues the cycle. By augmenting labour, these corporations free up cash and allow for increased spending at other retailers, helping create jobs.

The BPO industry

Of course, it’s not only manufacturing jobs heading offshore because skilled workers are standing by to fill roles within organizations, too.

Business process outsourcing (BPO) firms not only provide benefits for American and British companies by offering cost savings and making specialized talent available, but they also promote the growth that domestic employees rely on to create high-paying jobs. The cost savings create a trickledown effect that keeps money local and can drive domestic business, as well. 

You don’t have to be an influential corporation to take advantage of offshoring because DOXA assists small and medium-sized businesses in securing the talent they need to build specialized teams to compete with multinationals. We can help you fill your available roles with the ideal offshore expertise so that you can reach your expansion goals. Please take a minute to contact us and receive a free consultation or to start interviewing candidates today.

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