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.

Conclusion

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.


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.