Thomas Friedman, a Pulitzer prize author once said that the outsourcing industry has the potential to level the global economic playing field. This means any country in the world can equally compete with each other by offering competitive outsourced services and virtual staffing solutions.

While outsourcing in the late 1980s was only a heavily debated option for companies, many growing businesses today have come to realize the cost-efficient benefits of outsourcing certain tasks and functions that are not central to the operations of their business.

Companies are now able to reduce operating costs and reinvest resources into other crucial functions that can gear them towards confidently scaling their business. If you’re looking into improving your financial performance but are wary of spending way too much than you can afford, outsourcing can be a life-changing decision for you.

Offshore Outsourcing In Developing Economies

Over the past two decades, developing nations have been increasingly drawing in multinational companies looking to grow their business. The Philippines and India are among the top chosen outsourcing vendors in Asia along with Brazil, Argentina, Poland, and Ukraine. The concept of outsourcing was born from the simple and straightforward need of passing on non-central functions and tasks to developing countries that have lower labor market rates. These functions can include customer service, IT management, accounting, data entry, marketing, as well as billing and collections. In the past, manufacturing seemed to be the leading outsourced operation offshore. Depending on the business needs of a company, there are other roles that can be outsourced, bringing in a new breed of highly skilled remote workers, better known today as “digital nomads”.

Sub-contracting business functions to these developing economies gave way to positively addressing their perpetual unemployment rates and at the same time strengthening their labor forces in specific industries.

Outsourcing is the economic pillar of the Philippines, employing over 1.44 million Filipinos in 2022. Statistics recorded a revenue of $29.1 billion from the country’s outsourcing industry, said to hold about 15% of the BPO global market. It has become the top foreign exchange earner in the country next to foreign exchange remittances coming from overseas workers. Hailed as the “Call Center Capital of the World”, the Philippines continues to thrive as an offshore outsourcing provider due to the country’s high level of English language proficiency and remarkable soft skills.

India on the other hand, is home to most tech workers or IT nomads. Many big-name companies in the US have been outsourcing to India for IT and tech needs for many decades. In fact, IBM alone employs over 130,000 tech support workers, which makes up one-third of the country’s general workforce.

Ukraine and Poland closely follow suit in providing outsourced offshore IT support. Poland’s IT outsourcing services have grown from $1.09 billion in 2010 to $12.4 billion in 2021. The country is gaining much recognition over the years for its favorable conditions for foreign investors which has attracted big tech companies such as Google, Microsoft, and Motorola. In 2019, data records showed the number of IT specialists in the country peaked at close to 300,000 experts aged 34 years old and below with most residing in Warsaw and Krakow. IT is the second largest business sector in Poland.

Being the second largest country in Europe, next to Russia, Ukraine has been gaining good ground as the world’s next destination for IT outsourcing due to its reputation for producing high-standard IT/software development and digital marketing services.

Meanwhile, companies catering to bilingual clients look to Brazil and Argentina to outsource their back office operations. Being the sixth most populous country in the world, Brazil has a certain appeal to global companies due to its large and experienced workforce, low turnover rates, and bilingual remote workers.

How Does Offshore Outsourcing Change Lives?

  • The BPO industry is an avenue for connecting people across the globe. It provides work opportunities and career growth for people living in developing countries.
  • Enables workers to improve skills through training provided by BPO companies
  • Provides generous and competitive compensation
  • Allows remote work/ work-from-home so employees are able to choose work hours that best suit their lifestyle and have work-life balance.
  • Increases efficiency of employees which in turn gives higher satisfaction to both clients and recognition for employees

Social Issues in The World Of Offshore Outsourcing

Although many have come to question the socioeconomic implications of outsourcing offshore, it is difficult to ignore the positive impact of the BPO industry in these developing nations.

Giant BPO players such as Telus, Teleperformance, Convergys and Accenture have taken it upon themselves to give back and support the locals of their host countries. These are done through various programs that regularly reach out to local communities providing clinical health services, feeding programs as well as volunteer and charity organizations.

They believe that reinvesting profits and resources into local communities is part of their global responsibility to change lives apart from providing locals with well-paid jobs that may not have been available to them otherwise. Outsourcing companies are not merely in it for cheap labor- but are eager to tap available global talents and skilled professionals who may have fallen through the cracks of local employment.
The rise of virtual assistants has helped many small to medium business owners grow their ventures. At the same time, technology and the core concept of outsourcing have provided financial freedom and opportunities to pursue successful careers for these remote workers.

Key Takeaways

Outsourcing is a win-win solution for growing companies and developing economies. While the entire concept of outsourcing has been criticized for taking jobs from people living in first-world countries and detracting from home economies, offshore outsourcing has proudly weathered its detractors. Although many have scrutinized BPO companies for wanting to capitalize on cheap labor to expand their business, outsourcing has been embraced as a responsible cost-saving solution that benefits its host country as well.
Globalization is at our doorstep. If you’ve been on the fence about outsourcing your business offshore, let us help you see things from an objective perspective. At Elite Virtual Staff, we want to help you decide if outsourcing is a viable solution for your business by providing an in-depth consult. Call us today. You might just see the light and realize there is nothing to lose when you outsource offshore.