The debate on Onshore Vs. Offshore has been going around for a while now. While one provides access to a talent that is more familiar with the market, the other has a wider pool of talent. Let us take a look at both sides of the this strategy and understand which comes out on top. However, before diving into the details, let’s start with the basics of onshoring and offshoring.
What is Offshoring?
The concept of offshoring refers to outsourcing your services outside the country. In offshoring, a company contracts with an external provider in a different country to perform specific tasks or functions that its employees would otherwise perform. This can involve a range of business functions, including manufacturing, customer support, information technology, accounting, and more.
What is Onshoring?
Onshoring business activities means contracting out services to companies in the same country. It is possible for companies onshore may stimulate the growth and development of the local economy. In simple terms, it includes business operations that are outsourced within the same region.
Onshore and Offshore: What are the Pros and Cons?
Let’s look at the pros and cons that onshore and offshore recruiters might need to take into consideration to make a smart choice.
- Access to more skilled labor: It has been estimated that India is now known to be one of the top suppliers of IT and engineers in the world. Technical education has grown rapidly in recent years. Of 17.3 million students enrolled in undergraduate studies, about 4.5 million (26%) are in engineering fields with Information Technology (IT) among the most popular career options in India, followed by Engineering. By outsourcing, companies can have wider access to a more skilled personnel. For areas like IT and engineering, companies require a certain set of skills, and by offshoring their services, they can onboard experienced professionals, which directly leads to more efficiency in their business operations.
- Cost-efficient: With lower labor costs in other countries, companies can reduce payroll expenses. Businesses can lower expenditures from the cost of raw materials to cost-effective technology and automation.
- Cultural and language barriers: One of the disadvantages of offshoring services is that companies might have to go through some language and cultural barriers. Communication can still be difficult, which can lead to misunderstandings and delays.
- No monitoring of employees: When you offshore your business services, the ability to monitor and check the quality of the employees is difficult.
- Efficient security of data: When the services remain in the country, the outsourcing service provider will also share the same set of rules and regulations for security.
- Familiarity with the local market: With onshoring, the service providers have a knowledge of the local market conditions. Consequently, they can adjust their services in accordance with changing market requirements.
- Overhead costs: With onshoring, you might face high labor and infrastructural costs.
- Less global reach: Since the services stay within the country, there is less scope for a global reach and thus, leading to a smaller talent pool.
Onshore and Offshore Talent: Which is the Better Choice?
The choice between onshore-offshore service providers is a crucial one. Both have their own pros and cons; however, the decision depends upon the needs and requirements of the company. A hybrid approach, which combines onshore and offshore talent, may also be an option to consider. It’s important to carefully evaluate the costs, benefits, and potential risks associated with each option before making a decision.
With a vast suite of services like IT staffing and technology, MRCC is the safest bet when it comes to choosing between onshore and offshore hiring. MRCC is a recruitment services company with expertise that will help you choose the best talent as per your needs.