Chat with us, powered by LiveChat

What is Offshore Outsourcing and How Does It Work (2023 Guide)

Table of Contents

Offshore outsourcing refers to the practice where companies outsource their core business tasks or projects to other countries. This type of outsourcing allows companies to save costs and increase productivity.

Outsourcing has become commonplace in today’s global economy. Companies often outsource their in-house operations (such as accounting) or customer service functions to other countries. There are several benefits associated with working with an outsourcing partner, such as lower labor costs, increased efficiency, reduced risk, and access to new markets.

Offshore outsourcing allows companies to save costs and focus on core competencies. In addition, they gain access to new skills and expertise that they otherwise wouldn’t have found at home.

What is Offshore Outsourcing?

Offshore outsourcing is a business model that involves hiring workers outside the home country in which a business is headquartered. Companies often outsource their IT operations to countries such as India or China because they offer lower labor costs.

In recent years, offshoring has become a common practice across industries. The trend started with manufacturing companies shifting production from the United States to developing countries like the Philippines, India, and a host of other Asian countries. Now, even service providers are looking to hire cost-effective talent overseas.

While outsourcing work offshore largely offers impressive benefits, including reduced labor costs and operating costs, there are also risks associated with outsourcing due to operating in different time zones and reliance on your outsourcing partner to maintain a high quality of work.

Still, many businesses outsource their business operations with great success, including Apple, IBM, and Microsoft.

Offshore vs Onshore Outsourcing

Offshore outsourcing refers to the practice of hiring an organization outside your country for services that you would otherwise perform in-house. Onshore outsourcing refers to the opposite - contracting out work to another company within your own country.

There are benefits to both onshore and offshore outsourcing, and both should be considered when looking into outsourcing companies. However, there's a third solution that cannot be ignored. Nearshore outsourcing involves outsourcing labor to a country near your own. For example, many US-based countries outsource to Mexico and enjoy the benefits of having bilingual employees in their own time zones for lower costs.

What Kind of Business Activities Can be Outsourced Offshore?

Both large and small businesses alike--and everything in between--find offshore outsourcing to be cost-saving and efficient. The simple fact that outsourcing allows a business to access a huge talent pool and boost its external human resources opens innumerable doors for growth. There's potential to outsource business processes across nearly all industries, with some of the most common outsourced activities including: 

IT Services

Technical demands are great for every business. Outsourced information technology services can support your in-house team, taking calls to assist with tech support, assist with help tickets, and provide hardware installation or software setup guidance to customers or employees around the clock, regardless of time zone differences.

Customer Support

This is probably one of the most well-known types of outsourcing because it involves hiring someone else to help customers solve problems. This could mean anything from answering questions via email, phone calls, chat, social media, etc., to providing customer support. Call center outsourcing agents can easily handle customer support calls with an FAQ-style reference guide, making both onshore and offshore call centers quite popular and easy to implement into your business model.

Web Development and Software Development

Web and software developers work with code, and luckily, coding is done in the same language all around the world. 

Offshore software development services can help your business develop apps for mobile devices like smartphones or tablets, or build desktop programs for computers. Meanwhile, web developers can build and maintain your website with ease. By sending your web and software development work to an outsourcing partner, you gain access to a large talent pool of qualified engineers, often at a significantly reduced rate from what you'd pay in your home country.


Bookkeepers record transactions, prepare financial statements and keep track of accounts receivable and payable. Because bookkeeping tasks are very process-oriented, they're very easy to document and send overseas for an outsourcing partner to handle. The right outsourcing partner with bookkeeping expertise will already know the accounting, tax codes, and other financial considerations in your country, and often, outsourced work includes a QA/approvals stage handled within the outsourced external organization, so you know all numbers and figures handled will be accurate.

Front Office Services

The front office tasks are those administrative functions that keep your business running smoothly. These include things like customer support, marketing, accounting, human resources, etc. While it can be useful to keep a physical employee at your reception desk in a brick-and-mortar building, many of these other tasks can be handled via offshore outsourcing. Outsourcing these tasks to a different country allows you to focus on what you do best – growing your business.

Top 4 Benefits of Offshore Outsourcing

The benefits of offshoring can greatly impact a business of any size. Here are some reasons why you might want to consider outsourcing your business processes.

1. You Can Focus On What You Do Best

If you're an expert in something, chances are you know how to do it better than anyone else. But if you're a farmer, how well do you know marketing? Sure, you can speak to your product all day long... but you may not understand the ins and outs of getting your brand out into the market. Instead, you can outsource your marketing efforts, allowing you and your core team to focus on what you do best.

2. You Get More For Less

When you hire someone full-time, you pay for their salary, benefits, office space, equipment, etc. When you outsource, you don't have to worry about paying for all of that. Instead, you save money and gain access to talent that you wouldn't otherwise have had. The cost savings and quality of work you receive can change the entire trajectory of your business.

3. You Have Better Quality Control

You've probably heard horror stories about companies that overworked their IT departments. They end up having to deal with issues that weren't handled properly because they didn't have enough people working on the project. Outsourcing gives you control over quality. If you find yourself dealing with a problem that isn't being addressed adequately, outsourcing allows you to easily bring in additional resources to help resolve the issue.

4. You Get 'Round-the-Clock Coverage

Outsourcing allows you to have your customer care lines staffed all through the night, without having to pay inflated midnight shift salaries. Instead, outsourced partners work their standard daytime shifts, handling your business functions while you sleep, all at incredibly cost-effective rates.

How to Find an Offshore Outsourced Partner

Many business owners and team leaders just don’t know where to start in finding an outsourcing partner—and more importantly, finding the right partner. But we’re here to help.

We have contacts around the world, who focus in all kinds of industries, providing every type of service. We can connect you with large teams to handle a huge workload, or smaller expert teams that can provide the valuable detail your work requires.

Give us a call so we can find out what you need in an outsourcing partner and start curating a list of ideal offshore outsourcing partners.

Featured Articles

Get in touch with us

Schedule an intro call