The 1990s presented a tough time for America as organizations faced a colossal skill gap due to the advent of the tech revolution. That’s when US employers first turned to Indian talent for assistance. Since then, the trend has only gotten more assertive, and today, India ranks among the most sought-after countries for offshore business services, especially in the tech field.
Offshoring to India helps businesses save up on a considerable amount of costs. Moreover, the benefits of offshoring to India go much beyond just monetary. India is the most attractive offshoring destination due to its people skills and availability, business environment, digital resonance, and, most importantly, financial competitiveness. Here’s a list.
Here’s a list of benefits of Offshoring
One of the most outsourced services in India is Software Development. The hourly wage of a developer in India is about three times lesser than that in the US, even with the same profile and job role. That’s because the cost of living in India is far less than in the US. According to livingcost.org, an American’s cost of living is about 79% more than that of Indians.
Hiring offshore staffing services helps you save on employee overhead costs such as insurance, payroll taxes, etc.
Hiring and Training costs
The first and foremost reason companies hire offshore employees is their skill and expertise. Offshore employees are already trained professionals who can start contributing to your organization from day one onwards. By employing them, you can eliminate the training costs of hiring new employees.
Hiring offshore staffing services helps you save on employee overhead costs such as insurance, payroll taxes, etc.
Usually, governments of popular offshoring destinations like India, Malaysia, and the Philippines, offer tax benefits and financial incentives to attract investment from foreign businesses. For example, the Indian government set up SEZs or Special Economic Zones, designated duty-free regions. Establishments in these specific enclaves enjoy massive tax compensations and other benefits.
Don’t believe us? After all, numbers don’t lie! Let’s take a closer look at some statistics.
Frequently Asked Questions
How can you help me hire offshore employees from India?
We have a wide pool of IT talent from India. Our offshore facilities in Noida and Chennai, India comprise best-in-class infrastructure and support systems to help companies launch time-critical business initiatives with qualified technical talent. Speak to our staffing experts and learn more about how we can help you benefit with our offshore staffing services.
What is the average salary of a developer in India?
According to Payscale, a Software Developer in India earns a base salary of about 541,310 INR per annum.
Apart from the cost benefit, why do US companies hire Indian developers?
Besides lower worker salaries, India offers an unmatched pool of IT talent due to a high number of tech graduates. This widens the range of options and guarantees quality hiring for employers.
The term ‘offshore outsourcing’ was coined in the 1900s by economists when only some of the basic ‘blue collar’ jobs were exported. Gradually, as the offshore staffing technique evolved to encompass a broader range of services, employers started following the offshoring staffing trends for ‘white collar’ jobs. Fast-forward to the mid-20s, the tech revolution witnessed by the industry made it almost impossible to fill the talent gap without the help of offshore employees.
Partnering with offshore staffing solutions ranks among the most successful business strategies for growth today, and it continues to advance as leaders come to realize the benefits of offshoring. Here are some of the significant trends that are shaping offshoring practices today.
1. Increased focus on Cybersecurity
With data at the center of business functions today, a robust cybersecurity mechanism has become more critical than ever. Data breaches can incur a high cost to the company in terms of money and time. According to a 2021 study by Cybersecurity Ventures, global cybercrime is expected to grow at a rate of 15% annually, causing global economies to lose out on $10.5 trillion annually by 2025.
Data security concerns become even more pronounced with the offshore staffing trends when you have teams distributed across the globe. That’s when having a trusted offshoring partner is almost a necessity. A qualified offshore staffing agency employs certified security systems that can protect your company’s confidential data from intrusion.
Ensure you know the fundamental security frameworks for mitigating risks and protecting sensitive information. Safeguard all your devices and company systems, and most importantly, provide cybersecurity training to all your employees.
2.Quality over cost
It is only a myth that IT offshoring is mainly about cutting back on costs, even if it means compromising quality. The truth is- with time, leaders have come to realize the importance of quality hiring over anything else.
As the demand for cutting-edge skills increases, companies are left with no option but to prioritize hiring skilled professionals. According to a study by Korn Ferry, the US could suffer a loss of about $162 billion annually in the tech domain if it failed to find more skilled workers.
Hiring skilled professionals benefits you with a great ROI and prevents your company from losing out on revenue caused due to missing opportunities, high turnaround time, lost clients, and low-quality work.
3. Technology upgrade
Digital tech transformation has taken the industry by storm, and offshore staffing is no exception. About 85% of leaders believe that digitization is a pre-requisite for success today, says a study by Deloitte Digital and MIT Sloan Review. Here are some of the top tech trends of outsourcing.
Advanced collaboration tools- Most of the work happens remotely with offshore teams, and technology forms the backbone of all business processes. Having a reliable setup for communication and collaboration is a must for getting a job done from a network of remote employees.
Artificial Intelligence (AI)- Most organizations are integrating AI into their day-to-day functions to automate repetitive tasks. This helps increase the speed of work and allows them to utilize human resources more effectively and engage them in more strategic tasks.
Cloud Technology- Cloud technology has transformed the way companies used to store, retrieve, and access data. Most importantly, it allows organizations to maintain bullet-proof security and protect sensitive data from unauthorized access. Creating a winning cloud strategy can go a long way in driving your business ahead of competitors.
Internet of Things- According to CompTIA, about 6 of every ten companies today look forward to implementing some or the other form of IoT initiative in their business. IoT technology offers massive potential when it comes to improving customer experience, as well as enhancing internal operations.
4.Upskilling of staff
Given the fast-paced nature of the business world today, companies need to upskill and reskill their employees to match market standards constantly. Staff upskilling is no longer just an offshoring trend, it has become a necessity for every business. A study by Gartner reveals that only 16% of new joiners are capable of carrying out their job role. Offshore staffing provides a great opportunity for you to upgrade your workforce.
Employers today understand that a company can progress only if its employees keep upskilling themselves. The pandemic has taught us that no skill has a permanent position in the market and that anything can go redundant, anytime. The need of the hour is to build an agile and adaptive workforce that can quickly acquire new skills and apply them to generate results.
Besides, regular training and workshops have also been found to increase employee satisfaction and retention by making workers feel more valued. Most of them prefer to stay at an organization that invests in their upskilling.
The offshoring trend became even more vital as the pandemic pushed us to adapt to the new normal. Tech giants like Microsoft, Apple, Google, and many others are writing success stories by offshoring a considerable chunk of their business operations, and we believe you can write one too. What began as a mere cost-cutting measure has now become one of the most successful business strategies.
Frequently Asked Questions
Is offshore staffing still relevant in today’s world?
Yes, in fact more and more companies are switching to offshore staffing to bring down operating costs and hire high quality talent.
Do you also help conduct remote hiring?
As a Digital First company, Mastech Digital has embraced an agile methodology in providing technology talent through our remote IT staffing solutions. Our MAS-REMOTE offering helps you hire IT consultants remotely with confidence, backed by our comprehensive screening and on-boarding process.
Is temporary staffing here to stay?
Faced with uncertainty during the pandemic, a lot of companies now rely on temporary staffing to maintain flexibility and increase or decrease workforce as per demand. That’s why temporary staffing is a significant trend influencing the staffing industry.
Did you know? The offshore staffing agencies enable businesses to leverage their cost advantage by saving 40-60% on hiring compared to onshore recruitment. Offshore staffing solutions provide an excellent opportunity for companies to upgrade their IT talent at nominal rates. The Great Upgrade offers a window of opportunity for mid-to-large enterprises to reimagine recruitment.
Even though the threat of recession looms, the staffing industry is predicted to bring revenues worth $185.5 billion to the USA by the end of 2022, according to Staffing Industry Analysts. These numbers will surpass the pre-pandemic market of $152.8 billion in 2019.
With employee lay-offs, rising inflation, and currency volatility, all signs indicate that we are not far from another recession. Bigwigs such as Microsoft, Tesla, Twitter, and many others have started laying off employees and have either slowed or frozen the recruitment process.
If the Great Resignation of 2021 or the pending recession makes hiring more complex and costly, offshoring IT services are the way forward. The Great Upgrade is the best way to deal with such dire situations.
Staffing agencies play an instrumental role by providing your company with the most suitable offshore IT talent. This is where Mastech Digital’s IT talent solutions program steps in by hiring talented candidates from India with proven skills, experience, business acumen, and the ability to work independently. It’s probably the right time to invest in offshore staffing and find a like-for-like replacement, but at an affordable rate.
How does Mastech Digital’s offshore staffing help?
Offshore staffing can provide your company with several benefits, including lower costs, increased efficiency, and access to a larger pool of talent. Mastech Digital is a better-known offshore staffing service provider, hiring offshore talents with a proven track record for its clients. The company has global sourcing teams focusing on providing an IT workforce in India.
Let’s take a closer look at each of these benefits and how they can help your business succeed.
Cost-Effective: Our Global Delivery Model is experienced and helps you engage with resources with greater efficiencies. We provide a great way to cut costs for your company. One of the top benefits of offshore staffing is that it helps you to avoid the hassle and expense of training new employees. The staffing solutions hire IT talent from countries with lower labor costs, saving you money and improving efficiency for your company.
Diverse Talent Pool: Utilizing a recruitment agency improves your odds of meeting exceptional candidates with vital expertise and industry knowledge. We offer access to a substantial skilled workforce of reference-checked, pre-screened candidates. So, rather than solely depending on local workers to manage and assist your IT operations, explore a broader spectrum of the talent pool at our offshore staffing agency.
State-Of-The-Art Infrastructure: Utilize our safe and cutting-edge offshore delivery facilities in India for project management and execution.
Increased Work Capacity: Offshoring IT services provide the benefit of working round the clock for optimum productivity. This results in better outcomes and provides uninterrupted project support.
What makes India an ideal offshore staffing destination?
The labor cost in India is much lower than in the US, with a large pool of skilled and English-speaking talent available at lower wages. Besides, India has a vast talent pool as nearly half its population is of working age. It offers a competitive market with its lower wage structure and access to a broader network pool.
We live in a digital age where finding qualified talent isn’t as challenging as it was a decade ago. Businesses are now open to offshore outsourcing even in non-IT functions such as human resources, payroll management, digital marketing, SEO, online reputation management, and social media marketing, to name a few. The latest trends in offshoring have simplified hiring and reduced the recruitment cycle time significantly.
Offshore staffing is an ideal strategy to upgrade your IT talent at an affordable price. Mastech Digital’s offshore talent solutions provide highly-skilled IT talent from India, ensuring your business stays afloat in the competitive market. The company aims to help you optimize resources, reduce infrastructure costs and achieve greater organizational agility.
Frequently Asked Questions
What is the Great Upgrade?
As more and more employees leave their previous jobs in search for better opportunities, employers have a chance to attract better talent, that is an opportunity to upgrade. This phenomenon has been called ‘The Great Upgrade’.
What does the Great Upgrade mean for the HR?
The Great Upgrade means that organizations need to reinforce employee retention strategies while also filling in any skill gaps that exist.
How can I upgrade my recruitment strategy to attract more skilled candidates?
Partnering with a reliable offshore staffing firm can help you hire suitable candidates with minimum hassles. Mastech Digital helps you rebuild your recruitment strategies to attract and retain top quality talent.
Offshore recruitment process outsourcing is one of the most efficient business strategies today. However, several HR leaders still shy away from deploying the model due to several myths plaguing its image. As an outcome, they miss out on a huge opportunity to add value to their business. If you’re also on the fence, trying to decide if offshoring is the way to go or not, then this post is for you.
We compiled a list of some of the most common misconceptions doing rounds so that you can make an informed decision and do away with doubts.
Myth: Offshore staffing is all about cost-cutting and compromises on quality.
Fact: It may seem unbelievable, but offshore staffing does offer the convenience of quality hiring without burning a hole in your pocket.
One primary reason offshore recruitment services are highly cost-effective is that you can employ quality talent from less developed nations. Even though these candidates are skilled professionals, they charge you less than a domestic employee would. That’s because they live in a country where the cost of living is lower than yours.
Even though offshoring began as a business strategy for cost-cutting, the technique has evolved to prove beneficial in other essential aspects. For example, offshoring helps you maintain business continuity round-the-clock. So, it helps you serve your clients whenever they call you for support. Most importantly, it establishes you as a global brand and enables you to reach out to clients across borders.
Tip: Make sure you partner with a staffing firm only after being sure of the credibility and transparency of their procedures. Look at their earlier work and see if they can fulfill the promise of quality hiring.
Myth: You lose control over the recruitment process.
Fact: You are always the final decision maker, and offshore recruitment services are only there to distribute the workload.
Offshore recruitment services only work as an advisory for the hiring process and collaborate with your in-house team. You are in the driver’s seat when it comes to employing a candidate with your organization, as the decision to hire or not hire a candidate is entirely up to you. You can even participate in the selection rounds to reassure yourself of the quality of candidates sourced by the staffing firm.
If anything, you’re doing your in-house team a favor by off-loading them of the repetitive and monotonous tasks so that they can effectively use their skills and focus on more strategic and skill-intensive tasks.
Tip: Staffing companies do not know your company’s culture in and out, and only you can ascertain if an applicant can gel with your company’s values and ethics. Hence, it is advisable to be present for the final rounds of interviews with the candidates to correctly assess their cultural fitment with the organization.
Myth- The Offshore staffing arrangement is for large firms only.
Fact- Offshore staffing solutions are easily customizable to fit the needs of every type of client.
There is a suitable offshore staffing service for every business- small-scale, medium-scale, or even large-scale. However, many people mistakenly think hiring employees from a foreign country will cost them a fortune. It requires large budgets, which are a thing of only large-sized organizations.
It is one of the market’s most familiar offshore recruitment myths today. The truth is- hiring offshore talent is highly cost-effective. It is even more beneficial for small to medium-sized firms as it allows them to gain more working hands without spending on additional office space, employee overheads, and more. Moreover, offshoring also offers the flexibility of scaling up or down depending on the demand and business requirements.
Tip: Ensure there are no hidden costs in your agreement, and the terms are transparent right from the start.
Myth- Offshoring puts your data security at risk
Fact- Experienced staffing firms have well-managed security systems to protect your data
In today’s age of digitalization, it is almost inevitable to prevent the exchange of data, even if it’s confidential. Data is the lifeline of all processes central to the functioning of your business and preventing it from breaches is of utmost importance.
Qualified staffing firms deploy certified security systems that can prevent data leakages. Ensure you know their security management procedures well and review their credentials before collaborating with a staffing firm.
Tip: Avoid sharing your organization’s confidential data unless the need arises. That’s why companies prefer to offshore only non-core functions of the business and rely on their in-house team for core competencies.
Myth- Offshore talent does not fit well with the company culture
Fact- Diversity of culture further enhances your brand’s image and establishes you as a global brand
Organizations today strive to become more inclusive as they recognize the importance of DEI (Diversity, equity, and inclusion) in the workplace. Having a diverse workforce enables you to leverage the unique benefits that each of them offers. Moreover, you also increase your visibility among different cultures, further enhancing your market reach.
Although your offshore employees may initially take some time to familiarise themselves with your culture, having a cultural addition is always beneficial in the long run.
Tip: To minimize the language barrier and conflict of interest, ensure you have a well-managed communication process.
Many offshore recruitment services myths are trying to instil fear in the minds of business owners. We understand how much of a dilemma it can get when it comes to making a decision. However, don’t let distorted information get in your way of experiencing the immense benefits that offshore recruitment services offer. Dig into the facts, upcoming trends and see for yourself if they can provide for your business needs in a cost-effective and scalable manner.
Frequently Asked Questions
What are the digital skill sets offered by Mastech Digital?
Our experts help you source the best candidates across digital skill sets including data management, Analytics and AI, Cloud and Cybersecurity, Mobile and Digital Learning.
How can I effectively manage my offshore team?
Communication and a well-organized workflow are important elements of managing offshore employees. We at Mastech Digital can help you manage your offshore teams through our offshore programs.
Why is offshoring becoming a trend in the IT sector?
As more and more companies set out on the path to digitization, the need for revamping IT infrastructures is increasing. However, to acquire such complex skills in a short duration is next to impossible. Thus, offshoring IT solutions is the quickest and most cost-effective way to hire high quality IT talent.
How can I ensure high-quality work from my offshore team?
Make sure you onboard only well-fitting candidates who don’t need excessive training to work with remote setups. Mastech Digital sources only the top 10% of the candidates who qualify through tests to provide you with the best.
If you’ve ever searched for ‘outsourcing’ over the internet, you must’ve come across the terms ‘onshoring,’ ‘offshoring,’ and ‘nearshoring.’ All of them are outsourcing models, and they differentiate from each other based on the geographical location of the outsourcing agency.
Wait, did it get a bit confusing? Don’t worry! Here’s correcting the confusion with a detailed comparison so you can decide what fits best with your business needs. Let’s start with the basics.
What is Offshoring?
Offshoring is when you delegate work to a third-party firm outside your home country.
What is Onshoring?
When you contract part of your work to an organization situated in the same country as yours, it is called onshoring.
What is Nearshoring?
It is called nearshoring when you utilize services from a company situated in a nearby country with a similar time zone as yours.
Offshore Vs. Onshore Vs. Nearshore- A Detailed Comparison
Comparing the three outsourcing strategies based on certain key features can give a clearer picture of what can help you steer towards your business goals fast.
Coordination and Control
Offshore– In this method of outsourcing, communication mainly takes place through a virtual medium. Face-to-face interaction is scarce or negligible; thus, having a reliable team of remote workers becomes imperative. It will help if you have an efficient communication system and smart remote work procedures to prevent miscoordination among your team members. Recruiting an offshore staffing agency for offshoring is one of the best methods to make the most out of your offshore strategy.
Onshore– Onshoring offers a significant advantage in communication and supervision. Your in-house employees can interact with them regularly and hold in-person meetings and training whenever required. Being in the same country, the vendor’s team is easily accessible. This reduces the chances of miscoordination and thus the turnaround time for projects.
Nearshore– The nearshore model falls somewhere between the offshore vs. onshore conflict. Since your nearshore team works from a neighboring country, you have a chance to visit them from time to time, but that depends highly on your commute’s difficulty and distance.
2. Availability of a Diverse Talent Pool
Offshore– Offshoring is the winner regarding the diversity of hiring options. One of the major benefits of this model is that you have access to a global talent pool and the opportunity to recruit the best from among them.
Onshore– Onshoring offers limited options when looking for and hiring an outsourcing agency. You are limited by geography as you must search only within the borders of your country.
Nearshore– Almost like a negotiator in the tussle between offshore and onshore, nearshore outsourcing offers you the freedom to move past the borders, but not too far. So, it provides more choice than onshoring but less than offshoring.
3. Linguistic, Cultural, and Time zone Differences
Offshore– Language and cultural barriers are significant in this one as your offshore team resides in a different country or maybe even a different continent. While the time zone difference hampers instant communication, it also serves as an advantage. The latest tech trends in offshoring have helped bridge this gap to a large extent. Alternative shifts of work across borders ensure round-the-clock continuity of business operations. While your team in one continent may be asleep, the other one will be up and working.
Onshore– There’s little to no language barrier between you and your onshore team since they reside in the same country as yours. The absence of time zone differences makes instant communication possible, thus enhancing work speeds. Moreover, the cultural difference is also negligible, further improving coordination and understanding between your in-house team and the outsourcing agency.
Notice that the stark difference between onshore and offshore regarding language barriers is due to a significant shift in the location in the latter case.
Nearshoring– Minimal linguistic and cultural dissimilarities characterize Nearshoring. Because the time zone difference is not that significant, the model offers reasonable convenience of coordination.
4. The Cost Factor
Offshore– A highly cost-effective solution that helps companies cut back on huge expenses without compromising on the quality of work. Offshoring destinations like India, the Philippines, Mexico, and likewise offer skilled professionals at considerably lower salaries than the developed nations due to the lesser cost of living and abundance of talent.
Onshore– Hiring onshore talent is undoubtedly the most expensive of the three. Domestic talent usually comes at wages higher than what you can find outside.
Nearshore– Depends entirely on your country of work. If you’re residing near major offshoring destinations like India, Bulgaria, China, Poland, and others, you can enjoy the benefit of low-cost labor, just like offshore. However, if your neighboring countries offer expensive talent, you might have to rework your budget.
Table: Offshore Vs. Onshore Vs. Nearshore
Offshore Vs. Onshore Vs. Nearshore- Which is the best?
Well, there’s no single correct answer to that! Each of them is an excellent method of outsourcing that can help businesses save on expenses and improve business efficiency. The trick to finding the one suitable for you is to take a closer look at your business needs and see which serves them the best.
For example, onshoring presents a viable solution when you want to execute projects which require prompt communication and need to monitor your team’s progress and performance closely. However, offshoring is your best bet if you’re looking for a cost-effective solution for jobs that do not require much supervision.
To solve such challenges, Mastech Digital offers a hybrid offshore model that combines both benefits and helps you make the most out of offshoring.
This model helps you factor in all the benefits and risks and evaluate each method’s compatibility with your business goals before making the final decision. Good luck!
Frequently Asked Questions
What are the typical offshoring destinations?
India is the leading destination for offshoring, followed by China, Malaysia, Indonesia and Brazil.
What are the offshore staffing models offered by Mastech Digital?
With Mastech Digital, you can hire offshore individuals, teams and even associate with us for offshore programs. Our offshore solutions enable us to deliver co-ordinated multi-shift assistance across multiple time zones. Know more: Offshore Staffing | Offshore IT Staffing Services | Mastech Digital.
What is the geographical location in which you offer your services?
Mastech Digital is headquartered in Pittsburgh, PA with offices across the U.S., Canada, Europe, Singapore, and India. We support clients nationally as well as internationally. Please get in touch with us to know more: Best Digital Transformation Services in USA | Mastech Digital.
Do you also help hire employees on a contract basis?
As an IT staffing company, we specialize in providing contingent staff, contract-to-hire, as well as permanent staff across digital technologies.